The pandemic hit many industries hard. The luxury-goods sector is no exception, with 2020 forecasts predicting a 23% drop in luxury-goods sales. However, some luxury retailers have not only managed to survive but to thrive.
Fashion's Big Reset
One of the biggest impacts of the pandemic on luxury fashion brands, such as Dolce and Gabbana, has been the shift to online sales. With retail stores across the country shut down because of pandemic restrictions, luxury brands could no longer treat online sales as something they could choose whether or not to participate in. Industry experts believe this represents a permanent shift in the way the high fashion industry operates, rather than a temporary fix that will go away when the pandemic is over.
The Omnichannel Experience
The pandemic continues to have a huge influence on consumer behavior. 53% of consumers report that they have permanently shifted their purchasing preference to online shopping. This has created a challenge for high-end brands that have long relied on the experience of shopping in a luxury retail store to help justify the high price tags on their goods.
The high fashion industry must now find ways to provide customers with the same experience they have come to expect in brick-and-mortar stores online. Net-a-Porter has been an example of a success story in this area. By using its mobile app to engage customers in a controlled ecosystem, the company can track the customer's journey from start to finish.
Another key component of improving the customer's experience is simplifying the shopping process. An increase in buy online, pick up in-store options has been one response to this issue. This has helped retailers deal with persistent stock issues by making it easier for customers to purchase items that are out of stock at their preferred store online and then pick them up at a different location.
Personalized Customer Relationship Management Software
A big part of engaging customers online is personalization. CRM software is helping high fashion retailers accomplish this. Successful companies are using CRM software to build stronger relationships with customers and provide a level of customer service that distinguishes them from the competition.
Personalized marketing techniques have also played an important part. Providing customers with personalized product recommendations and discounts helps create repeat customers. Personalized contact builds trust and brand loyalty. CRM software makes it possible for brands to make data-driven decisions about what customers want and the best way to give it to them.
Digitized Product Development
Brands that were already digitizing their product development had a leg up when the pandemic began. Companies that adopted the strategy in the past year have found a way to stand out from the competition. Digital showrooms and 3D online product displays help overcome the challenges of selling a product that many customers are used to being able to shop for in person.
Some brands are using augmented reality technology to make it possible for customers to get a feel for what a product looks like in their world. Additionally, brands, such as Zara, are using AR technology to modernize the window shopping experience. Customers passing by a Zara store can scan a code on their smartphone and see models walk a virtual runway in clothing items that those customers can then purchase online.
Fans of high fashion didn't stop loving high fashion during the pandemic. However, their purchasing behavior did change. Sales of formal wear have declined with fewer customers attending in-person events. Instead, consumers are purchasing more athleisure and other items they can wear around the house or during Zoom meetings for their jobs.
The pandemic has presented challenges that the high fashion industry is working to overcome. A permanent shift to online sales may help insulate the industry against the uncertain future of retail.