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5 Ways Luxury Retail Can Bring Back Its Customers in 2022

5 Ways Luxury Retail Can Bring Back Its Customers in 2022
5 Ways Luxury Retail Can Bring Back Its Customers in 2022

Bain & Company published a study showing a 23% drop in the luxury goods market last year. Can 2021-22 be any different for the premium segment?

COVID-19 trumped the 2008 recession with the biggest decline in revenue for the luxury sector in 25 years. To say this was unprecedented would be an understatement.

Historically, luxury brands have been synonymous with extraordinary experiences for a niche set of customers. The high-end retail section is reserved for those who choose personalization and exclusivity over it all.

But, with the physical stores going for a shutdown, it was too much pressure for the online platforms, to begin with.

That being said, e-commerce has never been a strong suit for the industry. In 2018, the market value from online purchases stood at a meagre 10%.

Nevertheless, digital is indeed the new normal for luxury retail.

You see, the average age of the ideal customer has changed to 34. Today’s luxury shopper is younger, omnipresent and sustainably conscious.

Therefore, at Adapty, we’ve come up with five definitive ways that can revamp the luxury retail space to keep up your image and your young customers happy.

3 Levels of Digital Integration

First, let’s look into the present before we decide on the future.

Luxury brands are still hesitant about adopting the e-retail route in fear of losing their touch with exclusivity.

As a result, Altagamma-McKinsey Digital Luxury Experience Observatory has categorized high-end businesses into three segments:

1. The Hesitant Holdout

  • Smaller companies
  • A close chain of control with monobrand stores
  • Online capabilities restricted to product display

2. The Selective e-Tailer

  • Marketing channels for aspirational customers
  • Tight retail control
  • eCommerce only for entry-level products

3. The Plugged-in Pro

  • Open communication model
  • Distributed retail marketing strategy with multi-brand stores
  • 360º use of the online store and digital media

Also read: Customer Experience (CX) Changing The Face Of Online Retailers

All luxury brands fall into one of these archetypes. Think of it as a hierarchy system where the last segment represents the brands that have adapted and benefitted from the paradigm shift in retail.

The question is – Which category do you belong to, and how do you move on to the next one?

Learn more about our Salesforce Commerce Cloud Implementation For Luxury Retail

Salesforce Commerce Cloud Implementation For Luxury Retail

5 Ways to Increase Luxury Retail Sales in 2022

1. Re-Think Customer Experience

Raise your hand if you’ve heard this before: “Creating an online presence is the key to everything.”

While we do agree with that statement, it is a bit misplaced. Experience is the end goal here. The luxury retail market brings along a set of products that are premium to look, touch and feel. This is coupled with a promise of a high-end lifestyle and quality that cannot be replaced.

To bring the same idea to an online platform would mean bartering these factors for something far more essential.


Let’s put that in perspective for you.

In the end, it all boils down to creating a unique experience that is privy to each customer. The concept is equally relevant in both in-store and online scenarios.

For instance, Artificial Intelligence (AI) can be deployed to gather customer-specific data, improve product recommendations, promotional messages, and digital journeys.

Same-day delivery also does have a positive impact on your sales figures.Most B2B eCommerce businesses are taking different measures to increase sales with same-day delivery.

Also read: 10 Easy Tips To Double The Conversion Rate Of Your Online Store

Omnichannel Presence

It is the time and age of being everywhere your customers are. With limitless choices and platforms, luxury shoppers are looking for different platforms to deliver a consistent and seamless experience.

The trick lies in using personalization tactics to bring a similar customer experience, both online and offline. For example, luxury fashion brands allow you to use a code scanner for the products in their physical stores that intuitively brings up the relevant information on your mobile app.

Consequentially, the ability to create integrated channels, from promotion to service to delivery to loyalty, shall be what keeps your luxury buyers coming back for more.

2. Create Micro-Moments within a Community

A micro-moment is about creating an intent-rich scenario where your customer turns to a device to act on something they need – to know, do, go or buy.

Self-service, discovery and research are now implicit inclusions in a shopper’s purchasing journey. As a luxury retailer, what you need to focus on is creating effortless movement between product placement, reviews and purchases.

Whether it is fashion apparel, jewellery or home décor, building a community with moderated social media properties shall reiterate your positioning in the market, allowing for faster and timely brand recall.

Since convenience is of the utmost importance to high-end buyers, your e-commerce model should persist across different channels.

To give you an example, a customer should be able to start shopping on one device and complete the purchase on another without any disruption.

Also read: 5 ECommerce Marketing Trends That Cannot Be Avoided In 2021

3. Tap the Millennial Mindset

There must be at least 100 books to understand what the millennials say and what they actually mean. But, it is no secret that the age group gives experiences much more importance than mere products.

The behaviours can either be aligned to conscious consumerism or declining economic growth in the long run. Either way, the days of impulsive buying are long and gone. Adding a touch of sentimental value is what shall drive them to the other side of the line.

That being said, older millennials are starting to become the target audience for the luxury retail market. These High Earners, Not Rich Yet aka HENRYs are essentially drawn towards three facets – ethics, sustainability and value.

Now the first two can be driven through the brand’s production. Value, on the other hand, must mesh well with the customer’s identity and understanding. Both personalization and diversity are the prime touchpoints here.

Take Chanel’s Makeup Line for Men as an example. The ‘Boy De Chanel’ shifts the conversation from gender to style, catering to a niche while supporting the stance of fluidity and acceptance in today’s culture.

Download case study – Learn how we helped a luxury departmental stores enhance its sales

same day delivery online retail

4. Look for the Phygital Crossover

The word Phygital (a blend of physical and digital) stems from the idea of providing instant communication between the customer and products through a digital medium while they browse in a physical space.

Bearing in mind the flagship luxury experience, how much do you think the environment connects the customers to the products?

As per a survey by Deloitte, 63% of Generation Z prefers offline shopping channels to online platforms. The reason – personalization and interaction.

But, since betting all your cards on physical is no more a viable option, you can create a synergy between the two channels to deliver an immersive customer experience.

Let’s take an example again.

The Luce app, pioneered by Kering, enables instant checking of in-store inventory, omnichannel purchase records, analysis of customers’ and generation of product recommendations, creating a seamless journey with the brand. It builds the interaction between the product and the shopper through a conducive associate, reflecting the ethos of the luxury market.

5. See Through the Local Culture

The tourism industry is recovering slowly and steadily, however concerned with the fact that the next wave of pandemic might hit the shores. Given how the luxury retail sector drives its revenues typically from purchases outside their home countries, this has been a major deal-breaker for the market.

Considering the preference shift to ethical and locally-made products and chains, you again have the opportunity to bring in a group of customers who put relationship-oriented experiences above it all.

To break it down for you, an authentic storyline about the quality and origin of the materials shall take your global branding to the local customers.

H&M, for instance, has achieved this through their line of Conscious Clothing. Tapping on the cultural wave, 50% of each product is made from sustainable materials, which can be traced to their original source. To further encourage this initiative, the brand also offers additional loyalty points to its more conscious customers.  

What You Need to Know

Fundamentally, luxury shoppers are looking for a balance between exclusivity, accessibility and sustainability. To truly blend the three, you shall need to create a customer experience backed by a deep understanding of their expectations and provide hyper-personalization across all channels.

The future is uncertain as always, but with the luxury market underpinning its efforts through an omnichannel approach, identity-driven branding and authenticity, there is a high possibility of a comeback by the end of this year.

To further help streamline the process, our experts at Adapty have come up with a roadmap for the luxury retailers to claim back their customers, revenue and market share.

Reach out to us now to know more about how we can help get your online presence in line with your in-store experiences.

About Vijay Talreja

Author Image
Vijay is the co-founder at Adapty. He leads the India & Middle East geography and the Digital Experience business at Adapty. He has two decades of rich IT and industry experience and has delivery critical enterprise applications for global businesses. He has deep understanding of digital commerce industry and has been evangelising products and services in this space. He is an active angel investor and mentor to startups in the retail and healthcare space.

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