How Three Luxury Brands Are Adapting to an Omnichannel World

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From left to right: Maisonrouge, Gergovich, Bernard, Ottomanelli
From left to right: Maisonrouge, Gergovich, Bernard, Ottomanelli

Louis Vuitton, Burberry, Cartier. These brands are synonymous with luxury. But how do companies become associated with opulence and grandeur?

According to Ketty Maisonrouge, president of the Luxury Education Foundation, luxury is all about the emotion lavish products induce. But it also encapsulates heritage, as well as a sense of brand control over a company's image and identity—two factors that are becoming increasingly difficult to manage in a real-time world where the consumer is king.

“Suddenly, the digital world and social media made [luxury brands] live in a world that is fast pace and they have no control whatsoever,” Maisonrouge said while moderating a panel at the Columbia Business School's BRITE ‘17 conference in New York earlier this week.

Not all brands are adjusting to the shift easily.

“It's been quite a challenge,” Sara Gergovich, VP of digital and e-commerce for Hermés, said during the panel, acknowledging that the upscale handbag and accessories company has been venturing into social media “very, very slowly.”

As a digital leader for a brand that's been around since 1837, Gergovich said that it's her job to avoid fleeting trends.“You have to scale back and say, ‘What's best for my brand?'” she explained.

But with 51% of Americans saying they prefer to shop online, according to a 2016 BigCommerce and Kelton Global study, it looks like this trend is here to stay. As a result, luxury brands like Hermés are having to adapt. Here are a few examples of how they're adjusting to an omnichannel reality.

Digital is not the enemy

Despite the hesitation, luxury brands know that digital is not the enemy. It's actually the opposite. Panelist Alain Bernard, president and CEO of luxury jewelry company Van Cleef & Arpels Americas, said that digital serves as a vehicle for connecting, engaging, and selling to its affluent customers.

“It's not something that comes against us,” he said. “On the contrary, it's a huge opportunity.”

As the head of a company with less than 30 North American stores, Bernard knows that not all of his customers can visit Van Cleef & Arpels in-person. Digital provides a way for these remote clients to acquire the pieces they desire. But considering that the cost of some of these jewels stretch well into the six-figure category, Bernard knows that there likely won't be a two-minute click-and-buy transaction. 

So, Van Cleef & Arpels supplements this digital touch point with human interactions to build customer confidence, such as with its client relations center. It also builds up this confidence post purchase with a seamless delivery service and beautiful packaging.

“The human element has to be at the center of everything,” Bernard said.

Traditional ads are still in play

As channels like digital and mobile play a bigger role in the customer journey, marketers are having to adjust their budgets. Take panelist Vincent Ottomanelli, president and regional director of Ferragamo U.S.A., for instance. He said that the high-end shoes and leather goods company has shifted 50% more dollars to digital year after year.

But this doesn't mean that Ottomanelli has abandoned traditional advertising entirely. “We're not prepared to go 100% digital,” he said. Ottomanelli said that time-honored channels, like print, are still important to the brand. As a result, it's important to find a happy medium between the two.

“I'm not sure what exactly that balance needs to be,” he said.

Embracing the influencers

According to a 2015 survey by influencer marketing service provider Tomoson, 59% of the 125 marketers surveyed intended to increase their influencer marketing budget within 12 months.

Gergovich and Bernard said their brands work with celebrities to promote their products; however, they also said that they won't “buy friendship,” as Bernard put it, or pay influencers to sport their products. When an influencer promotes one luxury brand and then turns around and promotes another, it results in a loss of credibility for everyone, Bernard argued.

“We never buy that,” he said.

Moving to mobile

The “2016 State of Marketing” report by Salesforce Marketing Cloud reveals that 77% of marketers say mobile generates ROI, and 79% consider it core to their business.

Hermés is adapting to this mobile shift by providing in-store sales associates with tablets, Gergovich said, which allows them to look up inventory and email consumers products.

Ottomanelli said that Ferragamo has in-store tablets, as well. In fact, when it hosted its made-to-order program, he said, it armed associates with iPads so that they could help shoppers personalize their shoes right there in the store.

Hesitant on social

These luxury brand executives don't deny social media's effectiveness at driving engagement. In fact, Bernard said that Van Cleef & Arpels doubled its website traffic from Facebook posts and engagement versus digital banners—and for about one-tenth of the cost, too.

But when it comes to posting content on social media, these luxury companies aren't willing to relinquish much control. Bernard said that Van Cleef & Arpels doesn't promote user-generated content; instead, he considers it something “we just have to live with.”

Gergovich said that Hermés does have an interactive portal where customers can send photos and stories of their products; however, she said that this still allows the brand to review the content first and that the brand doesn't really promote user-generated content beyond this.

“We can't release that much control,” she said.

But Bernard knows that if he and his fellow luxury marketers want to maintain this control, then they'll need to produce content at a much faster rate.

“We need to be much quicker,” he said.

The retail evolution

Just as how the digital world is evolving, the in-store experience is changing, too. Bernard said that today's customers want to be educated, not sold to. So, it's important that Van Cleef & Arpels' sales associates exude a sense of product expertise.

And to create a more seamless experience between channels, Gergovich said Hermés started installing Wi-Fi in its stores last year.

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