MILAN — Italy’s luxury goods association Altagamma introduced the first edition of the Altagamma Digital Luxury Awards, assigned to luxury companies registering the best performances in the digital arena.
On Thursday, the association assigned the award for the best digital strategic reach to Burberry, while Fendi emerged as the company that most improved its digital strategic reach between 2015 and 2017.
The choice of the prize winners was based on a Contactlab study that analyzed, through 85 parameters, the digital performances of 30 international luxury players.
The award ceremony closed the “Altagamma Digital Luxury Experience 2017-DLE3” conference, which studied the disruptive effects of digital in the luxury industry.
Among the topics discussed, Antonio Achille, senior partner and global head of luxury at McKinsey & Co., highlighted the importance for luxury players to adopt a “reverse omnichannel” approach. “Online must become a stress test which each company should apply to each decisional process to verify if it is compliant with the digital world,” Achille said, adding that the strategy should inform all the different phases, including the design process. “It’s crucial to think about pieces which are Instagram-friendly.”
According to Achille, the strategy requires major shifts in the structure and work methods of organizations. In particular, he mentioned big data analytics as crucial to improve the performance of luxury companies. The analyst explained how expansive data enable the development of contextual marketing strategies through the monitoring of customers’ habits in different situations. Data also give brands the possibility of gaining customers through internal prospecting. According to Achille, between 50 and 80 percent of luxury company’s new customers have been engaged via internal prospecting.
“Advanced analytics also enable labels to develop a personalization of storytelling,” said Achille, who highlighted the need for brands to sign partnerships with specialists to develop the most advanced and efficient initiatives. For example, he cited the recent collaborations between Burberry and companies such as Google and DreamWorks.
But if digital is definitely a huge opportunity for luxury companies, it also might reveal hidden dangers when not approached in the right way.
In particular, Luca Solca, head of luxury at BNP Paribas, noticed that online commerce might be tricky for those companies dependent on wholesale distribution.
“A pricing problem can occur on the web and if a company’s wholesalers sell products at lower prizes, the same company will sell very little on its e-commerce,” Solca said.
The BNP Paribas analyst also pointed to a certain delay in the integration of the digital experience into brick-and-mortar by a big number of luxury players, which still offer very few services.
In addition, Solca highlighted the necessity to use CRM to develop relevant interaction with potential costumers, who should not be bombarded with nonpertinent communications.
“The luxury world was first focused on products, then on retail and now it is the world of customers,” said Kering chief client and marketing officer Carlo Alberto Beretta. “Time and space between companies and customers are becoming shorter and shorter.”
According to Beretta, luxury companies must have a deep knowledge of their customers, who are no longer segmented in terms of age and nationality, but are classified on the basis of their behaviors.
In order to have deep, engaging interactions with its customers, the Kering group has introduced a customer assistance service that will be soon extended to more of its brands.
“We have skilled people who interact with our customers in different ways, by phone, e-mail and chat,” said Beretta.
A consistent balance among content strategy, shopping windows, advertising and merchandising is key to succeed in the current luxury scenario, according to Valentino chief digital marketing officer Dante D’Angelo, who also highlighted that the major mission for big luxury brands remains to increase traffic in their stores.
According to D’Angelo, although major labels have a relevant retail business, wholesale, and especially “those niche multibrand shops which adopted innovative in-store solutions,” is still crucial for the industry.
“The wholesale [channel] is one of the most important touch points between customers and brands,” Beretta agreed.