London-based luxury online retailer Net-a-Porter has a list of EIPs, or Extremely Important People, who make up 3 per cent of the site’s customer base but account for 40 per cent of fashion and beauty sales. EIPs are offered a bespoke and invitation-only membership programme, which includes personal shoppers, special previews and premium delivery. The group just announced that more than 100 new personal shoppers and client relations managers will be hired within its luxury division to serve Net-a-Porter and Mr Porter’s most loyal customers.
Farfetch, another London-based staple of luxury e-commerce, introduced a private client loyalty programme two years ago called Fashion Concierge that sources exclusive, sold-out items for its top tier customers.
“Whether you are a classic shopper who loves Ferragamo shoes, fine watches from Zenith and jewellery from De Beers, or you follow every new drop of sneakers available on our site via partner Stadium Goods, we can cater to you,” said Farfetch chief customer officer, Stephanie Phair.
The ultra-rich are a small pool considering that less than one per cent of the world’s adult population holds almost half of all global wealth. But at a time when luxury goods can be accessed by almost anyone, anytime, luxury brands are striving to make their top spenders feel extra special.
Earlier this month, Burberry announced the launch of a new feature on its year-old iOS app, R-World. R-Message is an invitation-only function where customers can chat directly with retail associates – something that could prop up sales even further.
“In the retail business, adding one or two per cent on a conversion rate makes an enormous difference, if you’re able to do that globally,” said Burberry’s vice president of digital commerce, Mark Morris. “We know a base that we will aim to achieve, but with the potential of achieving much more. The fact that it’s in the hands of 6,000 different associates makes it a big initiative.”
But while luxury brands try to retain the loyalty of their ultra high net worth customers, they are simultaneously striving to capture the interest of new ones. With luxury becoming increasingly inclusive and accessible, getting a taste of haute couture is just a click away. Women can now rent a $5,000 (£4,053) Giambattista Valli dress for a tenth of the price on Rent The Runway or hire vintage costume jewellery for £40 through London-based 4element.
What’s clear is that brands need to be well-plugged into the digital space to acquire and interact with a newer, sometimes younger, customer base. Breitling CEO Georges Kern, for example, is known for chatting with his 38.2K followers on Instagram, where he advertises new watch models and provides information on designs and mechanics.
“What’s key in the success of leading luxury brands is that they are relentless in their mission to stay relevant with consumers, to be hyper-responsive,” said head of global luxury practice at Interbrand and Meta-Luxury author, Rebecca Robins.
Brands are also exploring new digital spaces to attract a more tech savvy audience. Gucci is tapping into the gamification trend and demand through first-moves into creating its own video games. The Italian luxury brand recently launched Gucci Arcade on its app, where customers can play to collect digital Gucci badges while revisiting past collections. Prada, which has been more conservative than others in venturing online, recently said that it is undergoing a digital transformation programme and plans to invest in all of its digital assets to create an increasing immersive brand experience.
“Companies and brands understand the importance of connecting with all different types of customers, new and old, entry-level and high profile,” said David Sadigh, founder and CEO of the Digital Luxury Group. “Today, acquiring lucrative VIP clients is too expensive for brands, hence the importance of growing them over time and ensuring you never lose them.”
In other words, retention is just as important as acquisition. From LVMH launching its own multi-brand platform (24 Sèvres) to Kering bringing online sales in-house, luxury conglomerates are adjusting their structures to move away from third-party online sellers in order to re-establish a more direct rapport with their customer base.
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