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Social Media Media Planning and Buying Retail

The reinvention of retail and e-commerce: the divergence between convenience and luxury

By Simone Stewart

August 17, 2021 | 6 min read

In the post-lockdown context, e-commerce success is going to increasingly come from merging the best of both worlds of online and in-store customer experience.

Luxury watch

What role do loyalty schemes and personalization play in luxury retail?

Brands will have to reinvent their bricks and mortar retail experiences, as well as create a virtual reflection of what customers expect when shopping in-store. What exactly this looks like will of course vary across different industries, for different products, and depending on core consumer groups.

One example that we are already seeing is that there is a divergence occurring between what this looks like for convenience and luxury products. Like many other elements of the branding, marketing and positioning of these goods, while there is a base level of expectation spillover that determines the minimum expectations of the majority of consumers, the nuances between the two are becoming increasingly prominent as we move toward a new normal.

At the upper end of the market, consumers’ expectations of a tailored approach will extend to their online shopping experiences like never before. Personalized experiences online and offline are the new normal. Personalization will continue to be central to brands’ success, and what constitutes the most effective personalization will likely be tied to the nature of the product. Bringing a human touch to online experiences will be important across all sectors and brands in unique ways.

There is likely to remain a time and place for when consumers prefer personalized experiences over anonymous interactions, and brands need to remain respectful of this, regardless of the wealth of knowledge that consumer behavior data may be able to unlock for them.

On-boarding experiences represent a unique opportunity for many brands to utilize AI and data to enable enhanced recommendations based on machine learning or past interactions. This would replicate education and relationship building that often occurs in first in-store interactions.

Mwell has curated its on-boarding experience for its prebiotic products through the integration of a quiz in its online store to guide customers on the right product and application for them based on their gut health. Consumers want to keep the convenience factor. For convenience products including FMCG, subscriptions have never been more popular. Following consumers’ need for many of these products to be delivered to their doors throughout the pandemic, for many this has been a convenience they aren’t willing to forego.

From health and wellness products such as Pure For Men to food and beverage products including Fullgreen and Roasting Plant, subscription growth over the past 18 months has seen unprecedented growth rates, as evidenced by Recharge’s 2021 State of Subscription Commerce report.

Customer relationships in the palm of your hand

At the other end of the spectrum, luxury brands that have embraced personal shopping via video-messaging apps such as Hero have been able to maintain personal relationships with existing customers, as well as establish new relationships throughout the pandemic while stores were closed.

The ability for customers to have the benefit of in-store interactions on demand through their own devices has been a revelation for many brands throughout the pandemic. This has seen strong growth in AOV and repeat purchases, and enabled ultra-convenient interactions at a time when consumers have never been more aware of the importance of the human aspect of retail interactions.

Loyalty looks different

While loyalty programs are universally successful, their integration and application across convenience and luxury brands need to be carefully considered. Amerifine, the definitive home of American excellence, showcases high-end products and brands from grand pianos to high-end jewellery, and naturally calls for a highly-bespoke approach to loyalty. Its clientele must find it engaging, rewarding and in-line with the personalized service they expect when purchasing high-value items, regardless of that purchase being made in-store or online.

Finding your tribe

Another revelation of the last 18 months has been the power and value of online communities. This trend transcends both convenience and luxury markets, with cult followings across many beauty, fashion and lifestyle brands, regardless of their price point.

Customers have shown an increasing desire to have an emotional connection with brands and authentic brand communities. The integration of UGC, reviews and influencer marketing has given brands the ability to create an authentic online movement that is difficult to emulate offline.

These communities are reinforced by best-in-class customer service, facilitated through omnichannel-integrated platforms such as Gorgias and by clients including Boy Smells with an incredibly loyal customer base, which expects online customer services commensurate with the quality of the product they are purchasing.

Providing a helping hand

At the nexus of convenience and luxury brands, we find high-end products such as Mylands. While many of us were in lockdown for months, direct-to-consumer demand for products such as paints had never been higher, and many online experiences were unable to provide the missing link of product information and application that consumers were accustomed to obtaining in-store.

Informative and educational content was integrated into the site through inspiration and advice sections to mitigate the loss of interaction with in-store staff, who regularly pass on helpful information to consumers. It is in these vital moments that brands need to consider what the consumer is potentially missing out on by purchasing online, and not only mitigating this but going above and beyond to ensure a best-in-class, omnichannel experience.

Simone Stewart, head of sales and marketing, Propeller.

For more on the reinvention of retail, check out The Drum’s Retail hub, where we explore everything from livestreaming e-commerce to AR shopping and conscious consumerism.

Social Media Media Planning and Buying Retail

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