The year 2020 was catastrophic for luxury fashion retailers. Closure of stores resulted in huge revenue losses, and brands that have not been serious about eCommerce were the ones to learn the true meaning of a disaster. In this blog article, we will be exploring how the shift towards an all-digital approach has changed our expectations of the shopping experience in regards to the luxury sector. As well as how it is currently shaping the future of the industry.
The expectations for how we’re treated when shopping at the high street and high-end has always differed greatly. When hitting mass production outlets, we don’t expect a personalised approach. Shopping there is as casual as it would be in a convenience shop. Designer shops, on the other hand, put a big emphasis on creating a personalised in-store experience.
Throughout the years, the growing popularity of eCommerce started blurring those previously clearly defined lines. However, as both retail sectors were forced to take their efforts to the digital space in light of the global COVID19 pandemic, new distinctions have emerged.
Virtual Shopping vs In-Person Shopping
Whether you enjoy it or not, shopping has always been an experience. Before the era of eCommerce, shopping was often perceived as a social activity to indulge into with either friends or family. Just think back about how much time teenagers would spend at the mall.
When internet marketplaces entered the picture, shopping shifted to being something best experienced alone, at the person’s convenience and from the comfort of their house. On the other hand, they co-existed with one another, giving the consumers a choice of the experience they wanted.
However, the recent pandemic forced in-person shopping to become unavailable for a year, pushing the retailers into embracing the digital era. While this was a switch many fashion labels were not willing to make, they were left with no choice.
Curiously, as the world has reopened, quite a few labels, especially across the luxury sector, chose not to reopen their physical stores. Given how closely fashion shopping is tied to customer experience, let’s look into how this affects the consumer and how has the change of consumer behaviour influenced the industry.
Rise of eCommerce
Although eCommerce became very popular in recent years, most of the luxury brands were hesitant to adopt it. Simply put, this was a concept tightly associated with high-street brands. Similarly to the core of the concept behind mass production, eCommerce served the purpose of convenience that would drive consumerism. And that stretches further than being able to purchase clothes without leaving the house. Many retailers would offer additional perks, such as free returns in case the product wouldn’t fit or free delivery when spending over a specific amount.
In other words, too many luxury brands that pride themselves on creating unique in-store experiences, eCommerce was not an option and therefore not a route they’d explore. However, with the physical stores closed, brands across the entire industry were forced to shift and therefore an already competitive environment suddenly became oversaturated.
While there have certainly been designer brands that have harnessed the digital space before, they’ve only had an upper hand in the beginning. Very soon, similarly to how it was in real life, the winners would be determined by creativity and, alas, a new type of customer experience provided.
Personalisation of Shopping Experiences
As we have touched upon the significance of in-store experiences to luxury brands, let’s talk about what it actually entails. Most of the high-end fashion stores would normally have a security guard positioned by the entrance who would either permit or stop people from entering. The decision would be based on the guard’s assessment of whether the person is likely to make a purchase or not. While this practice is largely frowned upon, it serves the purpose of protecting the brand’s resources rather than flaunting exclusivity.
And the reason behind it is the said experiences. When you enter a luxury fashion boutique, you are instantly treated as a prestigious guest - some stores even offer free goodie bags or bottomless bubbly to the visitors. The experience created by the store is a direct investment of the brand into nurturing you to become a buyer and a return customer. This is why the duty of the guard is to prevent wasting the investment on people that have no intention of converting.
But this is a thing of the past. Online shopping experiences are less glamorous and less gated. While in real life personalisation meant being pampered and looked after, in eCommerce personalisation means delivering content and offers that are specifically tailored for you. Online shops are carefully tracking each action taken by visitors, this way learning about them as a person, their preferences, interests and affinities. This data is then used to create highly individualised communication with them across different channels.
Think about the ads you see, the emails you receive or product suggestions when you browse an eCommerce website. How often is it so accurate that it looks as if it was put together just for you? Well, the secret is - it was. In summary, while a shopper’s experience is still a crucial element of online shopping, its definition and execution are vastly different from a real-life version.
New Formats of Store Presentation
One of the key opportunities provided by eCommerce is the freedom to experiment with the formats and outlets in which the products are presented. While the 360° product view or video showcases would impress people 10 years ago, nowadays they are the basic assets of any online store. However, retailers have been actively dipping into previous untapped digital areas. Such would be gamification and the introduction of virtual changing rooms.
When eCommerce became the only option to sell and the competition has grown ten folds, finding ways to stand out from the crowd became crucial. Therefore in the past year alone, we have been presented with multiple creative ways for brands to present and sell their stock.
Less Competitive Environment for New Designers
It’s historically difficult for new designers to make themselves known in the world of luxury fashion. Most of the biggest labels have been around for generations and have long since claimed their spot in the market they will not budge from. Aspiring designers with sufficient budgets would rely on temporary pop-up stores to get noticed by potential clients, but the chances of competing against premium brands were always slim.
The fashion industry is known to be particularly competitive and cut-throat, which is what made it so difficult for emerging brands to gain visibility. However, the shift to eCommerce presented them with an opportunity to gather exposure without huge investments. Social media became an outlet for new designers to share their creations with the world and gain recognition without being muted by the established labels.
The Role of Media
Since we’ve started talking about social networks, let’s dive into the connection between media and fashion. The two have always gone hand-in-hand, long before the concept of the internet was born. For example, fashion magazines have been around ever since the invention of the press. The digital age has expanded the industry by bringing on new media outlets: social media, apps, eCommerce, games and many more. In other words, fashion designers now have a whole new world to explore and apply their creativity to.
Brand Ambassadors and Sponsored Promotions
With its exponential growth since the rise of Instagram, influencer marketing has turned into one of the most controversial topics of the century. Although it has been criticised for lack of genuinity from the start, the issue proved to be deeper than first assumed. As products potentially harmful for health and wellbeing such as diet pills were widely marketed through influencers, social platforms had to come up with sets of restrictions.
Still, sponsored promotions and freebies in exchange for shoutouts became widely used and highly regarded practices. In fact, many people would leave their day jobs in the pursuit of becoming ‘an influencer’. This epidemic caused a new wave of concerns, this time addressing mental health being of both, the influencer and the underage, high impressionable audience. More restrictions arose from that. Some countries even introduced unique taxes on influencers.
However, the landscape is now changing as Gen Z is coming to an age where they begin shaping the industry. The unique trait of this generation is that they have a deeply rooted dislike for anything that’s unauthentic and artificially perfect. Their beauty standards and values revolve around imperfection and channel their disappointment with the world that pretends to be perfect.
Such perception is steadily pushing influencer marketing out of the picture, quicker than any social or government initiatives have. The curious trend we can already see is that while eConsumerism keeps on growing, there’s a decline in the brand ambassador/sponsored content arena.
The New Era of Fashion Shows
The clearest example of how big the media reach via formats has grown is best illustrated by fashion shows and collection releases during the lockdown period. Quite a few brands released their collections in collaboration with popular apps, such as Snapchat, therefore employing gamification as their outlet.
Others chose to stick with a video format but made it unique by also onboarding computer graphics and traditional art forms. We are, of course, talking about Mochino’s Puppet Show during Milan fashion week.
This doesn’t mean the fashion press is dead, though. Loewe’s idea of releasing a new collection was executed by employing print. The concept of a new collection was releasing a newsletter as an addition to fashion magazines, announcing the cancellation of the fashion show.
As one would expect from some of the most creative people on the planet, the pandemic was taken as an opportunity to harness new, untraditional formats and platforms to deliver new collections. And it’s doubtful that the trend of shocking the audience via embracing different media channels and formats is going to continue long past the COVID era.
Rise of Transparency
The unique trait of media in the digital age is that brands are now forced to communicate with the consumer directly. Previously, outlets like TV or the press would filter out potentially image-harming information shared by brand representatives. In other words, the way fashion brands would communicate via media was tailored to be flawless and aimed to please the consumer.
Now, on the other hand, both brands and the consumer are using the same channels. It’s easy to catch and document the slightest slip up that happened in the online space, even if it’s been deleted within seconds. With no editors or huge PR teams involved in tailoring every piece of messaging going out to the public, the brands can no longer cover up their dishonesty or self-contradiction.
Basically, there are now two routes: being transparent or receiving public backlash when lies and inconsistencies eventually resurface. And it’s bound to happen.
Why Some Stores Will Not Reopen?
Even though in-person shopping has now returned into our lives, many retailers made a statement of not reopening their physical locations. While the full transition to eCommerce was hasty and caused by unforeseen circumstances, many brands found that they were more successful in the digital space.
For example, if they were able to preserve the revenue they’ve had in-store, they were ultimately generating more revenue as they now didn’t need to put aside money spent on rent of premises, utilities and other costs.
To some, on the other hand, the decision of not reopening wasn’t an eye-opening experience but rather a tragic consequence. Some brands were simply late or just didn’t quite understand the mechanics of eCommerce nor how to compete in the arena.
This is hardly surprising given how many components many are oblivious to go into creating a positive shopping experience. Unfortunately, this would inevitably result in loss of revenue and therefore lack of funds to reopen.
It is safe to say that the world of high-end shopping will not be the same. While eCommerce has been part of our lives for a couple of decades, it was something fast fashion sought to harness due its synonymy with convenience.
However, the mistake of not being early adopters of internet selling cost luxury designers dearly when the lockdown forced them to close the stores. On a positive note, the brightest industry minds have found tons of creative solutions to both sales and show cancellations.
Shifting all focus to the digital space was a steep learning curve, but the brands that were capable of adjusting have opened new horizons moving forward. Whether they are reopening physical shops or not, it’s clear that the use of the digital space will stay very prominent with fashion houses now that they’ve learned the unexplored and largely untapped opportunities it has to offer.
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