The November Luxury Client Experience Board meeting focused on breaking down the buzzwords "digital" and "omni-channel," and translating them into actionable and profitable ideas for luxury brands to optimize business performance and client experience across multiple channels of commerce and communication.
“Rapid increases in adoption rates of mobile technologies and the use of social networks over the past decade have radically altered traditional selling channels for marketers across the luxury landscape,” says Milton Pedraza, CEO at Luxury Institute and Retail Performance Academy, noting that successfully leveraging these technologies requires a holistic view of the business. “From travel and financial services to autos, apparel, accessories, jewelry, watches and more, successful luxury brand managers have learned to integrate digital strategies in an intelligent way that complements traditional selling channels and produces seamless and superior client experiences online, in-store, on mobile devices, or through some combination of all three.”
According to Pedraza, top-level luxury and premium brand executives he meets with are most urgently concerned with how omni-channel strategies relate to their specific business, how to decide which strategies to invest in, and how to know whether investments in omni-channel integration will produce positive returns on investment. To provide insights and to guide discussion on these questions, the group heard from keynote speaker Brian Manning, co-founder and president of Centric Digital and co-author of REVIVE: How to Transform Traditional Businesses into Digital Leaders.
Manning’s message is that omni-channel marketing provides customers with connected experiences, and businesses with enhanced performance, by integrating capabilities, data, and organizational structures across all channels.
Manning points out that new technologies have ushered in what amounts to a fourth industrial revolution that has put pressure on traditional retail sales, but has also created new opportunities for brands that are nimble enough to adapt their human resources, information technology, and inventory management systems to capitalize on the new reality.
In this environment, according to Manning, stores face an identity crisis, with management at many firms struggling to define their roles as centers of shopping, entertainment, distribution, and information, and to measure their true profitability. “We see the digital landscape changing exponentially. This change, combined with increasing pressures on traditional revenue sources, up-ends how retailers, particularly in the luxury goods sector, engage with their customers and leverage digital capabilities to enable an omni-channel experience,” says Manning. Retail brands also face disruption from digital natives like Amazon, as well as from the sharing economy with companies like AirBnB and ZipCar taking a bite of out of traditional hotel and car rental businesses. Even the attraction of the mall as a social destination for younger shoppers has waned in favor of hanging out on social networks like Instagram and Snapchat, while millennials increasingly opt to spend on experiences instead of material goods.
Companies that have successfully leveraged their investment in stores to create integrated customer experiences have done so by making stores personalized and experiential, and their customer engagements truly omni-channel. Examples of “table stakes” efforts companies need to adopt to remain competitive cited by Manning include the ability of customers buy online and return in-store, to buy online and pick up in-store, and to receive free shipping on all orders. The degree to which companies are executing on digital strategies ranges from primitive (lacking foundational digital capabilities expected by consumers) and reactive (meeting minimum expectations), to transformative (blurs lines between physical/digital, human/technology). Adds Manning, “In addition to having a digital strategy, it’s imperative that companies execute against their digital roadmap and track developments and trends in digital so they are not left behind.”
To drive the omni-channel experience, Manning argues that firms need to rethink success metrics for retail channel performance by integrating customer data across channels, resolving infrastructure and inventory gaps, leveraging the mobile-in-retail experience, and integrating next-generation technologies like virtual reality into the retail experience. Also important is that organizational structures move toward greater decentralization to help companies reap the maximum rewards of successful omni-channel integration.
Executives in the audience from top luxury retailers, major brands, real estate brokerages, digital agencies, and international banks broke into small groups to identify the most important issues and action items to guide management teams navigating the current environment.
- The store is going through an identity crisis that will shift quickly in 2017.
- Brands must redefine the store and how it measures profitability with regard to omni-channel.
- Constantly monitor trends and educate yourself, test and pilot, and roadmap and deploy.
- Brands must shift from being reactive to having transformative digital strategies.
- The data already exists, it’s a matter of making it available to associates to use in an easy to read and well-rounded manner.
- Rethink your success metrics and consider the behaviors that drive those metrics.
- Provide your customers with the tools to create user-generated content that drives conversion.
- Emotional intelligence is a key driver when technology is not optimal, and even when it is. Those with emotional intelligence will prosper more than those who do not, as the future of retail relies on relationships.
- Have the bravery to be a category leader. Allow your sales associates to become brand advocates and ultimately customer advocates.
- Brands must become more specialized and niche to provide a compelling offering that goes beyond the product and includes the optimal environment, service, human behaviors and tools that create the total experience.
“Although digital channels may seem to be encroaching on the importance of stores, innovations in technology also have the potential to dramatically leverage a company’s investment in its brick-and-mortar locations and human capital,” says Pedraza. “The key is to make investments in complementary ways that enhance overall performance and customer experience.”
For more information on best practices in optimizing technology for the client experience, and to receive a copy of Brian Manning’s presentation, visit https://centricdigital.com or www.LuxuryInstitute.com, or contact CEO Milton Pedraza with questions and information about becoming a member of the Luxury Client Experience Board.
About the LCEB: The Luxury Client Experience Board (LCEB) is a membership association of luxury industry practitioners, co-founded by Luxury Institute and The Ritz-Carlton to enhance the education and development of leading luxury brands. LCEB members receive ongoing education and training opportunities in industry best practices through original research, educational events, and training sessions. Members come from diverse industries united in their goal to build long-term, high-performance relationships with clients by delivering exceptional, seamless, and measurable omni-channel client experiences on a daily basis.