Luxury Interactive 2017

October 16 - 18, 2017

Convene Conference Center, 32 Old Slip, New York, NY


Old Habits Gone - Evolving Luxury Retail In 2016

Old Habits Gone - Evolving Luxury Retail In 2016Old Habits Gone - Evolving Luxury Retail In 2016
Today, there are countless new ways to consume, and brands need to become highly agile and adaptive, says Pedraza. That means forming relationships with customers as opposed to simply trying to increase transactions, in order to improve long-term sales, profitability, and the lifetime value of their customers.

Key topics include:
  • The state of luxury retail
  • Three best practices in luxury retail
  • Disruptive technologies for luxury brands
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Executive Summary

In 2016, luxury retailers struggle with decreased traffic and product demand as economic turbulence and a universal uncertainty about the global economic climate— including real estate bubbles in China, stagnation in Europe, the closing of secondary markets and even global terrorism—slows down consumption of luxury consumer goods. These factors combine with a generational gap, where Gen-X and millennial consumers spend within an “experiential” economy characterized by travel, interactive technologies, and specialized foods and services—which may come at the expense of designer apparel, watches, jewelry, and other luxury products.

Consumers increasingly conduct product research online before they enter a store, and even via mobile devices while inside the store, reducing luxury retailers’ opportunities to upsell or cross sell to consumers who have all but made their decisions before the salesperson first makes contact.

While sales opportunities in-store become increasingly challenging, luxury retailers face the additional problem of a reduction of in-store traffic within the retail market in general. The greatest challenge faced by modern luxury retailers is pivoting with the widespread adoption of technology across generations, where in-store sales give way to global luxury ecommerce, expanding at a compound annual growth rate of 14.28 percent, according to Luxury Daily.

Finally, and also due to economic restrictions, the used luxury goods market has seen a surge in 2016 as consignment shopping becomes not only socially accepted, but fashionable.

Key Findings:
  • Segmentation and Clienteling: Surprisingly, many brands are not very advanced in segmenting the client space; in other words, putting clients into groupings that make sense for marketing and for selling to those customers. This makes personalization impossible, so that the wrong messages reach the wrong clients and lead to lost sales. When front-line sales associates don’t have access to segment-specific or even client-specific resources, their chances of success are far lower than is reasonable, given the availability of means to conduct proper segmentation.
  • Identifying Lifestyle and Behavioral Factors: Another critical factor is behavioral consumer habits in terms of how they buy online and in-store; their search methods; and how they conduct transactions – all of which provides useful information that can be utilized to customize customer experiences. Similarly, lifestyle information lends itself to luxury retail in that spending behavior, search criteria, past purchases and even a customer’s marital status can be utilized to customize experiences and drive targeted sales.
  • Customization and Personalization: Capturing behavioral and lifestyle information about consumers contributes to how retailers might customize or personalize experiences. For example, if a retailer knows a large percentage of its customers are frequent travelers, and prefer wilderness excursions to vacation destinations, that will affect what kind of products, discounts or incentives that retailer will share with that segment of clients, as part of an effort to personalize their experiences.

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