Dinaz Madhukar, Executive Vice-President, DLF Luxury retail and hospitality
To begin with luxury has never been about “The Product” it has always been about “The White-Glove Experiences”, so while the online space will continue to influence the buying decisions of the shoppers through influencers, peer groups, endorsers and friendorsers, the actual online shopping will be very peripheral while offline stores continue to drive-in more sales.
I recently read a Mckinsey report which said, “Enhance the luxury consumer experience and transform your business to survive and prosper in the digital luxury era” and I could not agree more. I do believe that the evolution of the omnichannel retail concept, will, for quite some time remain the preserve of markets across geographies like the China and U.S.
In times to come, offline luxury retail stores will continue to dominate the consumers purchase preference, especially in India. The brick and mortar shop formats in the luxury retail environment are most conducive to EIP’s – Extremely Important People (valuable clients and brand loyalists) since they are conditioned to covet immersive and personalised luxury services and experiences , which can only be provide in a more tangible and tactile luxury brand sanctum- within the luxury-brand store.
A Boston Consulting Group report found that of the $1.8 trillion USD spent on “luxuries” in 2013, nearly 55 per cent was actually spent on luxury experiences. (Source: Forbes, 2017)
Also, while the west may be way ahead in online luxury shopping, India remains at the cusp of change. The online shopping environment in India remains fairly challenging; the major hurdle being brands looking to maintain a “luxurious image” and not overexposing and diluting the brand identity. Add to this the fact that the online space in India remains the bastion for great deals and bargain offers, which is visible in the consumer’s online buying behaviour and mindsets. They are seen forever scouting the online shopping space for “best prices and affordable products”.
The online shopping space in India is mostly the fiefdom of “on the go” shoppers who are looking more for affordable and stylised purchases rather than pure play luxury products that may cost exactly the same as they do within the stores. Having said that, the most popular purchases in online space in the remit of luxury products happens to be majorly on more accessible branded accessorises (parfume, sunglasses, belts) rather that mainstream luxury products.
What has been seen across luxury brands is more of the adoption of smart technologies within stores to reach out to a bigger footprint of customers. The millennials now seem to be maturing into a potential customer base for luxury brands across the world and therefore you will see a lot of tech-interventions and technology plays across luxury brands. From live fashion show feeds, to drones on the ramp, to style bots giving fashion advise; that is how luxury brands are now choosing to scale up their customer experiences and allude to the next generation of customers. Luxury brands are now moving on to allude to, not just the HNI’s but also the HENRY’s (High Earning Not Rich Yet) who are also the more informed and discerning new bevy of luxury buyers.
While luxury brands continue to adopt the digital-wave, the challenge remains to tie-in the “exclusivity” and the “immersive and transformational” luxury experiences into the consumer’s experiential. While technology can transform the luxury experience, the real world still matters. A Bain & Company report projects that although 70 per cent of high-end purchases are influenced by online interactions, physical stores will continue to play a critical role as 75 per cent of sales will still occur in a physical location by 2025. (Source: Forbes, 2017).
I personally feel that it is the juxtaposition of physical and digital worlds that will pave the way for interesting and immersive new experiences in luxury and that is what will make for a future forward offline store experience as well. Marry to this phenomenon, the disruptions offered by luxury brands, and you have a uniquely distinct customer proposition.
Hyper-personalised immersive brand experiences will continue to reign supreme, however, these will be further sharpened to give consumers more transformative brand immersions which will up the ante for luxury brand experiences, as we know them today. The more curative the experiences the deeper the entrenchment of the customers.
