The Future of Luxury Retail
I led Saks through the recession, which was undoubtedly the greatest challenge of my 12-year career there. The sudden changes the recession brought were an enormous punch to the stomach for everyone in the luxury sector. Overnight, business evaporated and we had to deal with excess inventory, too much capacity and employee issues as demand for luxury products dramatically decreased.
Fortunately, the recession was short-lived and the recovery was quick. Retailers that have always emphasized transparency developed loyal customer bases over the years, and those customers continue to understand the value of their products. The mass-market appeal of fast fashion will continue to exist, but customers who value the quality and craftsmanship of a product such as a Kiton suit exist as well. Luxury retail is constantly evolving, but as long as the industry creates exceptional products for loyal customers, its future remains strong. Here’s how—and why.
The all-important word is omni-channel
The word that has become almost ubiquitous recently is omni-channel, which is the concept that a retailer must provide outlets for consumers on all channels—online, on mobile platforms and in person. Consumers want to be able to access products wherever and however they choose. The battle is no longer between e-commerce and brick and mortar; they need to work simultaneously. Previously online-exclusive stores like Warby Parker and Rent the Runway are opening brick and mortar stores, proving how important physical storefronts will remain. Retailers should ensure consumers are able to move seamlessly between platforms, whether that’s trying a product on in the store and buying it online or buying a product on their mobile phone and returning it in store. It is incumbent on the retailers and brands to be able to operate in all those channels.
Product and service will always drive business
The reason people shopped 100 years ago was because of product and service, and product and service continue to be the most important benefits a retailer can offer. Luxury consumers expect to pay high prices, but they also expect exceptional service and products that are crafted with the utmost care. Craftsmanship and personal relationships draw customers, and, more importantly, retain them.
Yes, the implementation of technology should be an aspect of any retailer’s strategic plan, but technology can and should be utilized to build those relationships between sales associates and consumers. Sales associates who are knowledgeable about their products and familiar with their customers’ preferences make the luxury shopping experience special. For shoppers, it’s not just about a fast, courteous transaction, which is what would you would expect from a more moderate store. Luxury retailers have to consider service part of the product experience.