Bricks and Clicks: A New Stream for Luxury eCommerce

Think of a time when you used to drive down to the nearest shopping center to walk from shop to shop in search of new clothes, accessories and even groceries. There was a time when home deliveries were not the norm like they are today.

Living in this fast-paced world, home deliveries have turned into a necessity. Consumers want it NOW, whether it is the clothes the model is wearing on the runway or a midnight food craving.

Despite what is known, luxury brands need to find a way to adapt to the changing market landscape instead of sticking to a single stream to sell their products.

How? Let’s find out.

What is Omnichannel?

A business approach known as “omnichannel” strives to deliver a smooth and integrated consumer experience across numerous channels and connections. It focuses on giving customers a consistent and cohesive brand experience across a company’s platforms, including its physical stores, online, mobile app, social media, and others.

For example, a person might begin looking through products on a business’s website, add things to their shopping basket, and then go to an actual store to try them on before completing a purchase.

A successful omnichannel strategy fulfills the following:

1. Recognizable, consistent brand voice and vision.

2. Individualized communication based on individual preferences.

3. Based on information gleaned from prior interactions and the present stage of the buyer’s journey, the consumer’s experience is personalized.

Simply put, personalization based on preferences and purchasing behavior increases consumers’ likelihood of engaging with branded content across channels.

“Omnichannel transformation meant digital, supply chain, and people transformation. You are essentially looking at a company-wide transformation because most companies before that, looked at eCommerce as just one distribution channel.”

– Ninaad Acharya Cofounder and CEO at Fulfillment IQ

Multichannel Vs Omnichannel

Often at times, people use the terms omnichannel and multichannel interchangeably. While omnichannel might share some similarities with multichannel, there are some key differentiators:

1. Despite its name, multichannel includes extremely limited communication channels, while omnichannel consists of every channel. The term itself, “multichannel,” refers to having many channels, whereas “omnichannel” refers to a channel having all.

2. It is important to note that omnichannel focuses on a seamless experience for your consumers, whereas multichannel focuses on engagement within its many streams.

In multichannel, you might fancy the distribution system of selling your shoes through retail and online stores, which many businesses do. Whereas, in omnichannel, you reach out to customers through all available channels; this can include advertisements on their social media. This means your consumers can interact with your brand via a blog or tweet.

Is Omnichannel the End of Brick and Mortar?

While moving with the speed of innovative technology is necessary for any business to grow and thrive, going obsolete from physical stores and sticking to an online presence would not help grow your brand either. Considering that the omnichannel includes all streams, together with the consumers’ love for feeling the product in their hands and shopping at the store, utilizing this stream to grow as a business is important.

For instance, according to a Harvard Business Review, more than 92% of sales were that most consumers still bought from physical retail stores in the first quarter of 2016. But since Covid-19 rushed everyone to the confinements of their homes, the physical retail stores have flourished less than they did in 2016. However, 2022 saw people rushing back to stores as pandemic-led restrictions were lifted. According to a research, in-store sales grew by 13.4% in the month of May – 6 times more than the increase in online sales for the same time period.

Omnichannel caters to the consumers through every stream, not allowing discrepancies in sales to arise as they did during foreclosures during the pandemic.

“But let’s don’t forget that we, most customers, are still buying 80% of their transactions often in an offline location.”

– Andreu Marco Former Global SVP of Supply Chain at Burberry

Should Your Luxury Brand Go Omnichannel?

Embracing an omnichannel strategy can be a powerful move for luxury brands, offering numerous benefits, but it also requires careful consideration and planning to navigate potential challenges. When executed effectively, this approach has the potential to elevate your luxury brand’s market position significantly, fostering sustainable growth in the long run.

Advantages of Adopting a Omnichannel Strategy

Here are the key benefits of going omnichannel:

1. Reach and Accessibility

Luxury brand customers span the globe. By serving clients across various channels, including physical storefronts, eCommerce websites, social media, and mobile apps, you can increase your brand’s reach. The beauty of this channel lies in the ability to understand the consumers’ preferences and engage with a broader audience who prefers a specific channel.

2. Customer Experience

Speaking of choosing consumer preferences, exceptional customer experience is the secret to the success of luxury brands. By implementing an omnichannel strategy, you

can provide your customers with a seamless and personalized journey regardless of the channel they use. This reliability and ease enhance the luxury experience, encouraging patron contentment and adherence.

3. Merging of Online and Offline Channels

Luxury consumers frequently value the ease of online buying as well as the tactile experience of visiting physical establishments. You may close the gap between online and offline channels with an omnichannel approach, enabling customers to switch between them without any hassle.

Customers can, for instance, research things online, physically inspect them in a store, and then purchase through their preferred channel. Burberry – the luxury fashion company – implements this well by allowing consumers to browse and select their favorite products and go to the store to buy them! This also refers to collect-in-store/ buy-online-pickup-in-store service.

4. Info-Driven Insights

An omnichannel strategy produces a ton of client data, such as browsing habits, past purchases, and preferences. By analyzing this data, luxury brands may learn a lot about consumer behavior, trends, and preferences. Strategic choices about product development, inventory control, and marketing initiatives can be made using these insights, leading to increased business success.

Luxury shops aim to improve total consumer experiences by integrating online and offline shopping experiences. Luxury enterprises have been more hesitant to make significant digital investments because they think buyers would not buy such pricey things online.

Luxury brands can offer tailored experiences, uphold brand continuity, and satisfy their affluent customers’ changing demands by utilizing various channels. By adopting an omnichannel strategy, luxury brands may exceed their customers’ expectations and stay at the forefront of the rapidly evolving retail environment.

Luxury brands can offer tailored experiences, uphold brand continuity, and satisfy their affluent customers’ changing demands by utilizing various channels. By adopting an omnichannel strategy, luxury brands may exceed their customers’ expectations and stay at the forefront of the rapidly evolving retail environment.

Challenges of Going Omnichannel

However, the move to omnichannel comes with its own set of problems:

1. Higher Competition

Adopting an omnichannel approach may introduce channel conflict, especially if luxury brands have both physical stores and an online presence. There can be instances where customers research products in-store but make the final purchase online, potentially impacting the sales performance of physical locations. Moreover, luxury brands may face intensified competition from pure eCommerce players that offer convenience and competitive pricing.

2. Implementation Challenges

Issues with implementation resulting from complexity and resource requirements can arise while implementing an omnichannel approach. To guarantee a seamless client experience, you must integrate numerous systems, channels, and technologies must be integrated. Coordinating logistics, inventory management, data synchronization, and upholding consistent branding across all touchpoints may take a lot of work for luxury firms.

3. Higher Investments

Building and running an omnichannel infrastructure can be expensive upfront and overtime. Luxury firms could need to invest in technology, employee training, data analytics, and multichannel marketing efforts. Compared to conventional retail formats, the costs involved in establishing a unified and personalized customer experience can be higher.

4. Data Privacy and Security Risks

An omnichannel strategy results in the collection of large amounts of customer data. To safeguard sensitive client information, luxury brands must place a high priority on data privacy and security. There is a chance of data breaches or misuse, which, if managed improperly, can damage the brand’s reputation, and erode customer trust.

5. Ensuring Sustainability

To meet the expectations of anything, anytime, anywhere, it is hard to ensure sustainability. The carbon footprint reductions from online purchases would soon vanish when retailers and customers used conventional brick-and-mortar options to complete online orders, including returning items to stores.

Moreover, the issue of sustainability and competition goes hand in hand

“The inspiration is in these [India, Brazil, China] places where people are able to get products and services in 15 minutes. And here we’re talking about next-day delivery or one-hour delivery.”

– Andreu Marco Former Global SVP of Supply Chain at Burberry

The problem of sustainability with at-home delivery can be minimized by taking an example of how countries such as India, Brazil and China are able to efficiently deliver products without causing too much damage. Such as:

“It’s also people on mopeds just zipping around through the city, just delivering, and it almost seems like there are people on mopeds doing delivery, probably the same number of people that are on the road going from point A to point B.”

– Ninaad Acharya Cofounder and CEO at Fulfillment IQ

“So we can use bicycles and in a green way and look, we want to do this because we care a lot about the environment. I can tell you it’s also from a commercial point of view; this is a big deal. If we tell the customer this is a green delivery, we’re going to sell more for sure.”

– Andreu Marco Former Global SVP of Supply Chain at Burberry

Need Help Crafting a Successful Supply Chain Strategy for Your Luxury Brand?

While implementing an omnichannel approach can assist luxury firms in numerous ways, there may also be drawbacks to consider. Due to the complexity of integrating numerous systems and upholding consistent branding, implementation difficulties may occur. The costs of technology, training, and marketing initiatives must be increased.

Despite these obstacles, luxury firms may overcome them by carefully strategizing, allocating resources, and adopting a customer-centric strategy to deliver a smooth and superior omnichannel experience to their discriminating customers.

If you are struggling to create a winning omnichannel strategy for your luxury brand, book a call with our team. We can help you select the right tech stack to go omnichannel, build integrations and more.

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