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With technology at every touch point of daily life, consumers are now armed with more ways to shop online than ever before. According to McKinsey, luxury eCommerce sales are expected to reach $21 billion over the next five years, furthermore, the luxury eCommerce industry is seeing a much larger growth than many other areas of eCommerce. The first wave of eCommerce brought fashion to the world online. The current wave of eCommerce is concentrated around convenience, personalization, and rich buying experiences. Brands that were slow to adopt are now taking note of sophisticated purchasing behaviors as consumers are ramping up their online spending.
This concept goes much further for luxury brands. A sizable number of brands in the luxury market have been reluctant to sell online, with concerns around lacking exclusivity and control. These companies feel that areas of luxury shopping can be compromised if consumers are able to purchase products online instead of personally engaging with in-store experiences and elements. However, savvy brands that are aware of the changing landscape of the global luxury market are mastering the new reality of retail. Having overcome initial reservations, luxury brands are coming around and recognizing the opportunities that digital and eCommerce presents.
We’ll discuss how top luxury brands are embracing commerce-focused digital strategies and offer key takeaways for how your brand can implement similar practices to engage your audience and drive sales.
Information & Inspiration
In 2011, Mr Porter launched as the brother site to Natalie Massenet’s Net-A-Porter, a wildly successful women’s fashion apparel and accessories online retailer. The original customer concept was targeted around “the man in the Net-A-Porter girl’s life”. Soon after launching, the team at Mr Porter quickly realized that their actual customer was far more diverse, encompassing a wide range of male shoppers with distinguished tastes. Ask any brand selling online— convincing customers to purchase without the ability to touch or try on the items they’re staring at is no small feat. Mr Porter understood this and provided an experience that combines commerce with editorial-styled content. By providing customers with what they already want and additionally providing them with what they didn’t yet realize they wanted, Mr Porter perfected the ability to not just sell to their customers, but speak to them directly through content.
This level of engagement and sense of connection that Mr Porter maintains with customers stems from original content. This content is also personalized to customer taste, providing meaningful content that will be valued. The site primes the purchasing path for customers through precisely targeted, curated, and relevant content around the lifestyle of each product. They’re not merely shooting products in a studio and uploading those images to the product detail page on the site. Instead, customers experience a content journey with branded how-to guides, rich stories, style advice, etc. Each form of content is created around every product that is offered on the site to the customer.
Purchasing behaviors between men and women differentiate tremendously. When it comes to women’s fashion, a round-up of the must-have bags of the season could resonate with women. A similar approach towards men may not get them as excited. By providing information and inspiration through content, Mr Porter is able to guide male shoppers through the heritage, quality, and lifestyle relevance of a $700 pair of trousers, and subtly justify the potential purchase. The Mr Porter shopper isn’t just a guy who wants to look good, they also want to know when should they wear that double-breasted suit, how many different ways they can dress down a blazer, or tips on eating like a local— in a style-conscious manner, of course.
- Create content around a branded ideology. If your store sells men’s hand-made hats, consider creating a “Five Ways To Wear A Fedora” guide. The idea is to create a sense of personality and encourage engagement with customers, not sales. Don’t push products too hard; the content should be the primary focus.
- Practical content always wins. Mr Porter created a video that teaches men how to pack for a business trip. Will it drive a viewer to become a customer instantly? Unlikely. It does, however, become a useful resource for when someone searches for similar content, resulting in helpful content that’s also brand specific.
- Stay relevant. Keeping with the times and creating quality content is key. With season six of Game of Thrones premiering in April 2016, Mr Porter published a featured article. Showing a personal side of actor Nikolaj Coster-Waldau, the article touches on his experiences growing up, family life, and his road to the big screen. Supported by images of Nikolaj styled in luxury items carried by Mr Porter, the article promotes their products and creates brand engagement by remaining relevant.
Innovative Experiences & Market Expansion
Established over 150 years ago, Burberry’s reputation as one of the most prestigious luxury brands in the world still holds true today. What makes the brand even more respected is their innovative use of digital. In 2006, former CEO Angela Ahrendts declared she wanted Burberry to become “the first fully digital luxury company”. Since then, Burberry’s impressive digital accomplishments helped establish themselves as a top digital luxury brand. Business intelligence think-tank, L2 Inc, crowned Burberry with the top ranking in their annual digital index report, among other top brands such as Apple, Nike, and Google. With digital being central to the way the business operates, Burberry has pioneered how brands can capitalize on new social media channels, innovate how customers move through physical and digital worlds, and synchronize new technologies to expand into new markets.
User Generated Content
Luxury labels were once defined through highlighting quality and price. As the market is growing, so are the demands and expectations of consumers, especially within the luxury industry. Millennials (those born between the 80’s to 00’s) are engaged with brands more extensively than older consumers. To fulfill the engagement requirements from Millennial consumers, luxury brands need to build trust and create a two-way relationship with customers. User Generated Content helps solidify social validation by witnessing how other customers are interacting with the brand and their products.
Burberry spearheaded this initiative in 2009 with their “Art of the Trench” campaign, building upon its flagship product: the trench coat. The now world-wide campaign featured both users’ and professionals’ photographs of people in the trench coats, showcasing the various ways customers make use of the product. A clear product story is presented, while also proving to be an effective tool for spreading awareness and enabling conversions. Later that year, Burberry chose to live-stream their 2010 fashion show, an industry first, offering users the ability to participate in the exclusive runway show.
Power of Partnerships
Burberry has always been an advocate of partnerships with other platforms and technologies. For the Lunar New Year holiday season, Burberry created a dedicated experience on WeChat, a leading Chinese social messaging platform. The experience enabled users to interact with the native app by swiping and tapping to digitally “unwrap” and purchase limited edition products that were curated by Burberry exclusively for the season and the Chinese market. Adding to the experience, users were also offered the ability to personalize digital envelopes, specifically designed with Lunar New Year visual elements, to send to family and friends, along with the recently purchased gifts, to further celebrate the special holiday. For customers, unique experiences like these facilitate engagement and a rich purchasing journeys. For Burberry, experiences like these creates deep brand-loyalty, communicating a sense of inclusivity across various markets.
- Put users in the drivers seat. Building trust takes time, but when done through the use of User Generated Content, consumers are able to submit content and become a part of a larger community.
- Capture the action. Showcase great photos and instances of ‘real-life’ applications to keep your brand relevant among users and involved in the brand conversation.
- Market-specific attention. Consumer purchasing behavior is vastly unique from market to market. Pay attention to how the customers in a specific market respond to social media platforms and technologies first — then create an optimal experience that compliments their engagement behaviors.
Dedicated Platform & International Expansion
Michael Kors kept a keen eye on steady growth. In 2014, Michael Kors’ products were offered online through retailer Niemann Marcus. Embracing the concept of a dedicated eCommerce platform, Michael Kors ramped up their digital efforts and established their flagship online store at michaelkors.com. Over the short course of one year, Kors reported a 73% growth in online sales by Q3. Understanding when to expand into new markets is paramount to ensuring a healthy spike in growth, revenue, and profitability.
CEO John Idol reports intentions of launching 22 flagship eCommerce stores in European countries, launching six new stores by Fall 2016 and 16 more thereafter, respectively. Fueled by double-digit growth in online sales within North America, Michael Kors chose a platform that accommodates expansion and accelerates go-to-market times. Combining new market territory with a mobile focus, the brand is able to drive continuous eCommerce traffic through enhanced mobile shopping experiences. Understanding where your device-specific traffic is coming from, brands are able to optimize mobile shopping experiences to support unique engagement and maintain steady conversions.
- Choose the right platform. Choosing a rob platform is crucial to the success of a long-term eCommerce operation. A eCommerce site built on a stable foundation, powered by a scaleable platform, introduces brands to a wider audience and customer base.
- Timing is key. Steady growth is better than premature expansion. Use data-points and analytics to determine when is the right time to introduce your brand to new markets. Once a decision to enter new markets has been made, the real work begins. Extensive market research and due diligence should be executed — with each new market comes the need to build relevant experiences and accommodations to customer personas.
As luxury brands are increasing their exposure through digital and social channels, the consumers are paying close attention to how brands are communicating with them. Upstart brands can study what key players in luxury eCommerce are currently doing in digital and further iterate, creating richer experiences and highly engaging content.