The end-goal of every good product or service is to meet a need but that need may not necessarily be physical. Luxury brands are most sought after for emotional satisfaction. They pander to the consumer’s emotion and create a feeling of prestige. In most cases, having a luxury brand gives the consumer more satisfaction than the product’s economic value. Louis Vuitton and Gucci have maintained a consistent position as the world’s most valuable luxury brands —for years with current market values of $15 billion and $10.8 billion respectively. Although both brands have different aesthetics and marketing techniques, they understand the psychology of perception and exude a larger than life persona that consumers aspire to be. A recent report found that the personal luxury goods market was worth over $308 billion in 2019. But due to the COVID-19 pandemic, the figures were predicted to have surged this year.
Personalizing the customer experience
With about 80% of luxury sales happening in the digital space, technology is a huge part of luxury retail. Consumer data are significant to luxury retailers in offering the best customer experience. Luxury brands are no longer on the top of the Eiffel Tower in their interactions with the consumer—they have come down to the consumer’s level to create close relationships. They want to know the consumer down to the basics. The two world’s most valuable luxury brands Louis Vuitton and Gucci mentioned earlier are also the most popular luxury brands online. They create a balance between a great customer experience in their physical and online stores. I am an advocate for the importance of a strong sales force and good customer relations.
Several luxury brands were skeptical about moving to the digital space due to fear of losing the personal touch and connection they have with the customer in their physical environments. Machine learning allays these fears by streamlining big data with Artificial Intelligence (AI) to offer a personalized touch and experience.
Every visit a consumer makes to a luxury brand’s online store is an opportunity for the brand to know the consumer better. It’s like getting acquainted with someone—telling them about yourself including your likes and dislikes. Data Science and Decision Intelligence firms such as Data Innovation Labs (DIL) help businesses online in the collection and interpretation of big data to create custom communications in the customer’s online interactions. Its digital solution Klen that connects communities and commerce through data management can help luxury brands weather the storm during the COVID-19 pandemic by communicating the COVID-19 compliance to their customers with ease to reduce consumer fears when shopping in stores.