Luxury brands depend on their ability to collect, analyze, and generate insights from customer data, and turn them into measureable strategies that personalize experiences, and drive loyalty throughout customers’ sales journey.
Forbes said Data shows that the top 1% of a retailer’s customers are worth 18x more than its average customer. The most effective tool for engaging those discriminating, high-value customers is through personalization, and rather extreme personalization.
And CRM data on its own is not enough, not when social media stretches the boundaries of data beyond gender, income and age criteria and brands become unable to provide proper personalized content in a very responsive manner.
Arab Luxury World 2019 , the conference on the business of luxury in the Middle East, being held from JW Marriott Marquis in Dubai from June 12 to 13, held a session on Big Data in premium retail.
Is luxury retail going online?
WBR Insights says millennials form the generation that will contribute the most (130%) to the luxury market's growth over the next six years, accounting for 50% of what is forecast to be a $1,469 billion market by 2024.
According to research, the contribution of online luxury sales to the global high-end market will more than triple by 2025, reaching $86 billion, and accounting for nearly one-fifth of all luxury purchases made.
Online sales of luxury items across high-end categories such as beauty, perfume, footwear, jewelry, watches, and leather goods now account for 8% of the $295 billion global luxury market.
Big Data is huge premium retail
Big data refers to technologies and processes used to collect, analyze, and generate actionable insights from large amounts of consumer information.
High-end brands should mine vast streams of social media data, including consumer comments, influencers on Instagram, and engagements to discover key insights into customer lifestyles and shopping habits.
According to a new study by The Boston Consulting Group (BCG) and Altagamma, "For the first time, social media is the 1st source of information and the channel of primary impact used by true-luxury consumers, followed by magazines and brand websites."
It’s personal, you know
Already a number of retailers are going online to test the veracity of digital retail effectiveness and voracity of shoppers for it.
For example, Montblanc, a German manufacturer of high-end watches, leather goods, and writing instruments, deployed video analytics in its offline retail spaces to generate heat maps that showed where customers spend most of their time while browsing items in-store, and increased sales by 20% by positioning their product lines and sales staff in these locations.
AI is prime in premium
Gartner predicts that 85% of customer interactions will be managed by artificial intelligence by 2020 and estimates global artificial intelligence business value to reach $3.9 trillion in 2022.
Louis Vuitton (LV) Digital Assistant chatbot leverages AI technology to give customers a more “sophisticated, personalised, visual and conversational online shopping experience for each client” via Facebook, where Louis Vuitton counts more than 23 million followers. Dior has integrated Natural Language Processing (NLP) to deliver a more humanised chatbot dialogue – complete with emojis and GIFs.
- Machine learning
Beauty brand L’Occitane in partnership with Qubit, implemented an AI-powered personalised experience on mobile. Combining machine learning and customer behaviour data, L’Occitane showcases different products to each user based on their behaviour on the site.
- Voice recognition
Voice Search uses AI to allow shoppers to search for items using speech. According to research, voice searches will account for 50% of all web searches by 2020.
Voice technology and natural language recognition in AI are still evolving technologies but they are hinting at a transition towards voice-assisted shopping.
- Image recognition
AI-enabled facial recognition is changing the face of online luxury retail, for affluent consumers who opt to allow images of their face to be captured in order to benefit from a more personalised experience. Sephora’s online Visual Artist allows potential customers to upload a photo of themselves to “try on” makeup and experience how various products would look like on them.