CXG CEO Christophe Cais Insights for Bloomberg
From sending vans to the Hamptons to personal shopping over FaceTime, high-end brands are trying to offer exclusivity amid social distancing.
To survive Covid-19, luxury retailers are being forced to master something they’ve always avoided: impersonal transactions.
The pandemic has driven high-end U.S. retailers far from their roots of engaging shoppers with stylized, personal—and unfortunately, high-touch—service. Think makeup and jewelry counters, personal shoppers and in-house tailors. Now, with consumers staying away from public spaces, retailers like Bloomingdale’s Inc. and Neiman Marcus Group Inc. are coming to terms with selling products via FaceTime and curbside pickup. But translating this into a lavish shopping experience sounds about as natural as turning a TV dinner into five-star dining.
Retail’s new reality means that around 10% of physical luxury stores may close worldwide in the next three years, said Deborah Aitken, a luxury analyst for Bloomberg Intelligence. On the other hand, increased web sales could lead to wider marketing reach and more opportunities to target likely buyers using consumer data, she said. Aitken projects online sales could rise to 17% of the total for luxury at the end of 2020 — up from 12.5% at the end of 2019.
Now, companies must figure out how to conjure up their signature atmospheres, from iconic color palettes to warm smiles, when patrons aren’t actually in the building. Upping the ante is the fact that these companies’ customers expect perfection—a Birkin shopper in one of Cais’s focus groups, for example, thought her bag was cheaply made when it arrived in six months instead of nine. This attitude stands in stark contrast to the rest of retail, where companies like Amazon.com Inc. and Walmart Inc. have built up their shipping to get goods to customers as fast as possible.
Depending on the customer, speed may also be important for luxury shoppers. But overall, brands that have long prized personalized service must now learn how to control the user experience from shoppers’ first click to when the product is unwrapped.
First off, luxury stores must nail down how and where their customers actually prefer to interact, Cais said. Patrons don’t want the experience to feel too transactional or cheap. Calling customers to suggest products, for example, comes dangerously close to telemarketing. Drive-thrus and online shopping, meanwhile, move away from luxury’s signature immersive experience.
In the short term, companies are betting on video chat, which can let sales associates connect with longtime customers who may be staying away from stores. Bloomingdale’s has started letting customers shop by FaceTime, or even by phone call or instant message. And around 20 other luxury shops, including standalone brands like Gucci and Valentino, are making room for digital hand-holding via video software that lets sales associates track what customers are browsing online in real time. Shoppers can then opt into a video call with a store-based employee to get suggestions, ask questions or see merchandise first-hand.
One benefit of this strategy is that video calls could also attract or help retain older customers who don’t know how to shop online, like one man who showed up recently at a Bloomingdale’s curb, before patrons were allowed inside amid the lockdown, with a handwritten shopping list and a credit card.
Both Neiman Marcus and Bloomingdale’s, as well as boutiques like Tiffany & Co., also have curbside pickup—the same service offered by the likes of grocery stores and pizza chains. The wealthy aren’t turning up their noses at it. A recent Morning Consult survey showed that people who make six figures or more are using curbside pickup more than ever. In fact, Bloomingdale’s employees were surprised by how many customers parked and requested a stylist or shopper before reopening.
But curbside drop off and pick up doesn’t mean just depositing a shopping bag in a trunk and moving on. According to Charles Anderson, Bloomingdale’s director of stores, plenty of finesse is needed.
“You have to be cautious and careful and attuned to how much or how little interaction” customers are looking for, Anderson said. “If they pop open the trunk, then place it in the trunk and say thank you and move on. If they’re looking to make eye contact and all of that good stuff, then let’s make their day.”
Years of luxury dogma might have evaporated in a matter of weeks when Covid-19 broke loose, but high-end brands retain some advantages, namely low-traffic stores and buyers with plenty of disposable income. They’re also better positioned to invest in technology that could potentially save and build customer relationships, said Hadar Paz, chief executive officer of Powerfront, which created the retail-friendly video platform known as Inside.
But even when new software isn’t yet part of the plan, brands are still making an effort to preserve the glamour. In the Hamptons, luxury shoe retailer Jimmy Choo is visiting customers’ homes with vans of exclusive merchandise to flaunt. Jimmy Choo and others are also indulging newly agoraphobic patrons with one-on-one, appointment-only shopping slots. As Anderson from Bloomingdale’s put it, its customers are craving “a very human moment” more than ever.
This article was originally published on Bloomberg