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Luxury Brands Embrace the Digital Age

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The WWD Digital Forum London, which took place on 30 April 2015, brought together a selected group of brand thought-leaders and innovators from across fashion, beauty and retail to share ideas on the most pertinent issues businesses face in this ever-evolving digital landscape.

In this first recap, Euromonitor International assesses the differing digital strategies of global fashion house Gucci, the iconic British department store Harvey Nichols and leading e-commerce player

Harvey Nichols and Gucci: Bridging the gap between online and in-store

According to Sandrine Deveaux, Multichannel Director at Harvey Nichols, it is not a simple case of digital stealing share from physical retailing but rather an interaction between the two that has been accelerated by the use of smartphones. Barbara Rybka, Senior VP, Digital at Gucci, similarly stated “mobile is powerful and we’re viewing it as a bridge between online and in-store”. Although online accounts for a small proportion of sales in comparison to offline, both agreed that the influence of digital is significant, with eight out of 10 affluent shoppers researching online before purchasing.

Gucci has found that mobile and tablet now account for 58% of traffic online, with revenue increasing at about two thirds the rate of traffic. In particular, consumers who are already familiar with the brand are beginning to purchase high priced ticket items, most notably handbags, through these channels. Consumers are now using smartphones like personal assistants, helping them find stores and locate products. In response, Gucci launched an omni-channel initiative in the US called Find in Store, enabling consumers to identify which stores carry particular items.

Brands should not expect to attract new customers with a responsive website, nor should it be expected that consumers will download an app simply because it is available – all technology and platforms must have a purpose that provides value for the consumer. As stores continue to account for 90% of the business, Harvey Nichols remains focused on the customer experience in-store. Looking beyond technological gimmicks, such as virtual dressing rooms and magic mirrors, the retailer is focusing on the concept of a “connected store”, where staff and technology work together to engage the consumer. Removing the “e” from e-commerce

For, the challenge has not been the alignment of stores and digital but rather of positioning in the market. According to Ulric Jerome, Chief Operating Officer, the brand is removing the “e” from e-commerce and simply focusing on the future of luxury commerce. Having launched the website in 2007, the retailer decided to re-brand in 2013, embracing the digital culture by changing its name from Matches to

Transitioning from a bricks and mortar retailer, the online platform tripled the size of the business, now accounting for 80% of revenue and extended the geographic reach. In particular, US sales have grown by 87% in the last year, while Asia is up by 110%. Growth has been driven by tailoring services to meet the needs of the luxury consumer, with initiatives such as same day delivery in London, next day delivery in Europe and free collection on all returns.

In what is becoming an increasingly crowded online marketplace, the company has worked on appealing to the luxury consumer by emphasising a unique point of view, with a curated product range for men and women. It has sought to select the right designers and create editorial content that incorporates shop-able items, thereby providing value to the consumer and keeping them engaged. By focusing on commerce as an integrated system of all channels and platforms, the retailer aims to create a seamless experience for consumers that is grounded in digital.

Connecting the digital dots

With apparel and footwear internet retailing forecast to reach US$295 billion at constant 2014 prices in retail value sales by 2019, this is a channel with a myriad opportunities. As highlighted by the strategies of Harvey Nichols, Gucci and, well established luxury players are now acknowledging the growth in this area and demonstrating openness to innovation by using technology to “connect the dots” – ensuring customers are no longer constrained by physical spaces and stock availability.

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