The New Luxury Retail Experience: Digital, Immersive, Experiential, Theatrical

Burberry Beauty Box
Burberry Beauty Box

As Affluents become more digital and continue making large luxury purchases over e-Commerce, luxury brands must find ways to create more value for customers experientially through their flagship stores and boutiques. Burberry, Saks 5th, and many other luxury brands are embarking on initiatives to turn their retail stores into unique in-person experiences by leveraging new technology.

Affluent shopping behavior is increasingly digital, with spending on full-priced luxury items online growing up to 31% per year (Forbes, 2012), and 70% of Affluent males preferring to research and purchase items online. This shift in behavior is driven by better eCommerce options and online platforms, but is rooted in a larger cultural shift in beliefs.

Led by Affluent Millennials, an emphasis on deriving value and satisfaction in life through experiences, not objects, is impacting time management and shopping behaviors. Instead of spending time getting to a luxury store to make a purchase, Affluents spend a fraction of that shopping time by purchasing online, and instead invest their valuable time with friends and family, travel and entertainment — experiences that provide deeper satisfaction.

This shift in platforms and shopping behaviors necessitates a shift in brand strategy and screams opportunity. The primary function of luxury retail stores will no longer be to provide service around making a final purchase. With the more mundane transactions being conducted online, brands now can use their their boutiques and flagship stores to do more brand storytelling and create exclusive brand experiences. To successfully maintain a sense of luxury while adding an avant-garde feel, luxury brands need to leverage technology for customized, immersive, and visually captivating experiences that truly wow their Affluent audiences.

Many luxury brands are already taking advantage of technology in retail to refine their strategies. Saks 5th adopted software by Oracle that facilitates speedier and more efficient check-out systems and, most importantly, equips shop associates with valuable customer information during all points of sale, empowering associates to provide more personalized, quality service and recommendations.

Burberry has also equipped its shop associates with iPads featuring a shopper’s history and preferences. To take a step further in an innovative retail lap, Burberry has  established its flagship store on London’s Regent Street as a truly immersive brand experience, one that is “part event space, part innovation hub, part store,” in a glamorous space that used to be a cinema (Contagious Magazine, “Luxury Recoded,” 2013). The store even has content from the online Burberry World, including Art of The Trench and Burberry Bespoke, which makes sense given shoppers frequently visit a brand website while shopping in their physical store. RFID tags on clothes allow shoppers to explore video content on mirrors. With digital woven deeply into the fabric of its strategy, Burberry is equipped to develop even more immersive, experiential, and theatrical retail events. For instance, in the launch of the flagship store in Beijing, Burberry leveraged 4D video projection mapping to transform real models to holographic ones, who would burst into liquid or clouds of red powder or multiply like a David Copperfield magic trick.

Audi is another luxury brand leading the way with digital in a stunning showroom in the high-end Mayfair area of London. The retail environment uses state-of-the-art technology, enabling visitors to experience up to 3.5 million combinations through multi-touch screen tables by manipulating different colors, equipment options, and technical details. The Audi that they customize is shown on a large HD screen, allowing them to “drive” through different places–even hearing the sounds that the car makes.

As eCommerce continues to drive actual luxury purchase transactions, luxury brands need to seize this opportunity to create new reasons for their target customers to visit their stores, through deeply innovative and creative thinking about curating unique experiences. After all, as loyal and fanatical as many customers may be about certain luxury brands, if they are given a choice to spend 2 hours shopping for it in a store or 2 hours having dinner with friends on a river cruise, brands will be challenged with maintaining foot traffic to their retail locations.

However, if luxury brands, such as Burberry, begin to, but also showcase their brand identity in more creative ways. A unique showcase of luxury brand identity can create new brand evangelists, promote brand alignment and establish more meaningful relationships with their most valued customers.

(This feature was originally written exclusively for SoDA in July 2013.)

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