Department stores and luxury boutiques compete in ingenuity to capture the attention of their customers and arouse their desire. More than a scenographic design, it is about knowing and serving the customer better. In this field, they can make the difference with e-commerce platforms unable to provide a wide range of emotions born of a unique, memorable, and fundamentally human customer experience.
Dive into the heart of retail, the historical model of luxury distribution, in the light of the post-Covid era and the extended virtual worlds of Web 3.
The aftermath of recovery or the rebirth of physical retail
Last January, the NRF Retail Big Show opened in New York, a key event for distribution and retail professionals, including those in the luxury sector. For the first time without capacity constraints since before Covid, the event highlighted e-commerce solutions, contrasting with previous editions focused on retail experiences in stores. A development that is understandable given the growing share of e-commerce in luxury goods purchases: +44% between 2017 and 2019, according to the latest Bain-Altagamma study, entitled Renaissance in Uncertainty: Luxury Builds on Its Rebound, published in January 2023.
A sign that e-commerce has definitely triumphed over retail? Not quite. In fact, today, only 20% of the global turnover of the luxury goods industry (estimated at 1,400 billion euros in 2022) is achieved via e-commerce, compared to 80% in stores.
Retail sales are more alive than ever
Also, according to Bain, the growth of e-commerce between 2019 and 2021 was established at 92%. The temporary closure of physical retail outlets has decomplexed the clientele of luxury brands, seeing it as the only alternative to continuing to indulge in the comfort of their home. As Delphine Vitry, co-founder of MAD, a consulting firm specializing in luxury, explains, “In two years, the major Houses have accelerated their digital transition, not so much with a view to financial performance as to consolidate their omnichannel culture.”
The sales ceremony can thus start from anywhere, not only from the store or the e-commerce site.
When it reopened, the store still appeared to be a potential source of contagion. Enough to not give much hope to its future, despite the implementation of contactless devices, especially in the beauty world.
This was without counting on a certain weariness of relationships via screen: the growth of online purchases of luxury goods was only 20% between 2021 and 2022, according to the same Bain study.
Millennials and Gen Z are rediscovering the physical store
And today, we’re seeing a rebalancing of customers’ preferred distribution channels, now much more in favor of the physical store, especially among Millennials and Gen Z. “There is a real attachment to the in-store luxury experience, from first-time buyers, especially among the younger generations who now represent between 30 and 40% of customers,” explains Nicolas Rebet, consultant and founder of Retailoscope, a firm specializing in retail.
Numerous studies confirm that while members of Generation Z (20 years old and under) are much more comfortable buying luxury goods online than their older brothers and sisters, Millennials (25-35 years old), trying them on in-store remains a determining factor in their choice.
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Featured photo : © Presse
