This is the second in mine and my colleague Sheel Patel's series of pieces for Fluxx on trends in the luxury market.
As we discussed in our previous blog, the luxury market is at an interesting stage. There are new emerging markets to explore, which bring fresh challenges to many companies. In addition there are challenges closer to home which are forcing brands to reconsider their current business models and how they engage with their customers.
In this, our second perspective we are introducing how we think brands can blend the right ingredients to ensure long-term success. We will be exploring our thinking in more detail at our Fluxx Luxx event on the 22nd November.
After years of wowing the public, now its fashion houses who are striving to get the looks – falling over themselves to stream their spot at London Fashion Week to as many people as possible.
A couple of years ago there would have been only 200 people watching the runway – today’s audience is global. The British Fashion Council reported that at this season’s London Fashion Week 2013, 70% of the shows were streamed live. There is always rivalry between the fashion houses, from who is sitting on your front row to the theatre of the show. With live streaming, the race to better each other in innovation will only intensify. What will innovations in Autumn/Winter season 2013 have in store?
There have been some unique and interesting moves forward in digital for Spring/Summer 2013, pushing the boundaries of customer experience and commercialisation. Burberry’s show fitted perfectly with their strategy to merge the physical and digital experience, as evidenced by the seamlessness of their flagship World Store and runway show. This builds upon last year’s ‘Retail Theatre’ approach that saw the brand introduce click and buy direct from the runway, enabling customers to receive items in 6 to 8 weeks rather than waiting 3 months for stock to come into stores. This not only enhances the experience for customers it makes sound business sense enabling effective supply chain management and forecasting.
When watching a live-streamed show, many can ‘like’ a Burberry outfit, few can click the buy button. Topshop have successfully married the immersive show experience with making a purchase. As a result of this innovation the ability to share your favourite looks by ‘customising the catwalk’ has resulted in a printed panel dress being sold out within one hour of the show and Topshop lipsticks being purchased every minute.
Brands are now better placed to use digital effectively to tell their story, and are no longer afraid to leverage social shopping. These bold approaches for the luxury sector are crucial to ensure brands remain financially viable in these challenging times.
What does Fluxx think?
Despite some disappointing results and cautious outlooks, the value of British heritage brands remains solid. All have identified international growth as being core to their strategy. However, we believe to achieve these ambitious plans, require an understanding of three core related themes, which are significant in seeking to engage with consumers in the digital and physical space.
We have identified these themes as:
Storytelling
A consumer’s thirst for knowledge now goes beyond product and price. There is an expectation from that the brand will engage them with its heritage, provenance and experience. This holds true whether it be experiencing the theatre of a live runway show, seeing the craftsmanship of a product, or engaging new consumers to a brand they may never have heard of.
This activity is often thought to be in the PR or brand management domain. Whilst this is true, we believe it’s more about engaging people in a deeper relationship with the brand. Storytelling can achieve this simply and memorably.
Omni-channel experience
Omni-channel seems like en vogue buzzword for multichannel retail. But it is more than that. Omni-channel is the bringing together of all brand and customer touch points, to work as one simultaneous experience. Whether that means watching a live runway show on your iPad and clicking to purchase, down to the merging of physical and digital spaces as recently demonstrated by Burberry and Topshop.
Commercialisation
In today’s tough economic climate, luxury brands can no longer rely on a core customer set. Over the past ten years, many brands have sought to expand their customer base through product diversification with mixed results. It is a fine line to balance brand exclusiveness whilst ensuring commercial survival. Many forward thinking brands are embracing this dichotomy, by giving customers the same experience across different levels of range and price. This means recognising that sales are not just about a store and a website. It is about embracing a suite of digital tools and then applying them appropriately. More significantly it is about not being afraid of the ‘buy now’ button.
So come and join us. Book your front row seat for Fluxx Luxx on the 22nd November.