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Luxury Focus: Through the looking glass

The luxury sector has traditionally been slow to adapt to digital innovation - but not any more.

Last month Angela Ahrendts announced her departure from Burberry to join Apple as senior vice president of online and retail stores. The move marked the latest stage in luxury’s convergence with the technological world, which - with the advent of innovations such as Google Glass and wearable tech - will become increasingly intertwined.

High-end brands, which had traditionally been mistrustful of selling online for fear it would impact their exclusivity, are increasingly leading the way when it comes to retail innovation.

This is largely being driven by luxury shoppers. “Consumers now expect to shop on every different channel at any given time,” says Helen Goodson, head of ecommerce at five-store London retailer Question Air, adding that the independent retailer is investing ‘considerably’ in overhauling its digital channels with plans to make online its number one store in terms of sales.

“We will focus a lot on personal service; replicating what we do in store. Our social media strategy is also complementing this, creating a community around the shops,” she says.

Cari Marsden, ecommerce manager at two-store London womenswear retailer Austique, agrees: “Our customers interact with our brand in a totally holistic way, and they don’t consciously separate the channels. The way people use their tablets is part of the luxury experience and in fact enhances it.”

Tellingly, Ahrendts’ appointment at Apple follows the company’s hiring of former Yves Saint Laurent chief executive Paul Deneve in September 2013 as vice president. His main responsibility is for special projects.

And this focus on multichannel is evident across the luxury sector. US department store chain Neiman Marcus recently reported investment of $100m (£62m) over the next five years. In March 2012, the retailer introduced its Signature app, which alerts sales clerks when consumers who have signed up to the service enter the store.

Shoppers can browse event schedules and be alerted to promotions, while sales assistants can see their previous searches and gather recommendations.

In January, US group Saks Fifth Avenue, which has hired Marigay McKee from Harrods as chief executive, also announced similar investment to be carried out in a multichannel overhaul.

Many are also investing in digital formats to augment the in-store experience, making it more immersive, social and shoppable. In the UK, Selfridges’ new Denim Studio features the ‘Jeanius table’ - an interactive screen that allows shoppers to sift through brands, fits and styles to find the perfect pair of jeans.

Brands have also entered the next frontier with digital payments. Burberry has been experimenting with contactless payments through mobile platform provider Square, while PayPal has been trialling facial recognition payments in a handful of London fashion stores, including men’s and women’s wear retailer Noble Jones in Richmond. Apple has already introduced thumbprint recognition technology on its iPhone 5S. “Customers like [the fact] that they don’t have to bring out their wallet,” says Lina Grabow, manager of Noble Jones. “They like the convenience.”

Social media is also being used in more sophisticated ways. Google+ recently teamed up with Diane von Furstenberg to launch ‘shoppable’ Google Hangouts (virtual chat rooms) from her showroom.

According to research released by Shareaholic, a US-based content sharing platform, Pinterest now drives more referral traffic to retail than Google+, YouTube and LinkedIn combined. According to the Drapers poll of 2,000 consumers, social media is an important way to engage with luxury brands, with 73% using Facebook, 28.5% on Twitter and 9.2% on Instagram.

“Luxury brands are learning that by engaging on these platforms they can also gain key insights into the consumer through their sharing and shopping behaviour,” says Nishma Robb, chief client and marketing officer
at iProspect, a digital performance marketing agency that works with brands including Asos and Burberry.

However, it wasn’t always like this. The luxury sector previously took a dim view of technical innovation and digital channels. “It’s totally changed. Before, the luxury industry believed its traditional pillars of exclusivity and authority were threatened by the web,” says Chris Norton, chief executive of upmarket ecommerce portal Lyst. “But bloggers have made fashion more accessible. The social web has turned fashion brands’ authoritative monologues into engaging dialogues.”

Net-A-Porter has shown you can be digital but also still luxurious,” says Goodson. “Consumers are not afraid to buy high-price luxury items on digital channels now. It helps that the photography has become so good.”

The shift towards digital and physical convergence is also being led by the proliferation of smartphones, which are bridging the divide between shopping online and in a physical environment. According to global research firm The Luxury Institute, eight out of 10 affluent consumers over the age of 21 own a smartphone, while 56% own tablets.

“We’re living in a much more converged world. TV is converged with social media, which is converged with retail.

All these join up and we increasingly expect them to be seamlessly linked,” says Robb.

Ed Burstell, managing director of Liberty in London, agrees: “If you play in the luxury game you cannot simply choose one avenue to retail - you must have all the ones your customer is accustomed to using. You have to have a compelling in-store experience but more and more it’s about convenience. As the world gets more time-poor you have to give them the luxury of time - and technology is the way.”

The next stage of this, futurologists believe, is the idea of a ‘shoppable world’. According to UK consultancy The Future Laboratory and digital agency Somewhat’s collaborative 2013 report, Goldpapers: Phy-gital Luxury, through the use of connected devices and image searching apps everything on the street will become searchable and shoppable.

“Some 30 billion devices are predicted to be connected to the internet by 2020, according to technology consultancy ABI Research, from cars to store windows, allowing for all of these channels to be connected to retail,” says The Future Laboratory co-founder Chris Sanderson.

Already, Snap Fashion, a visible search shopping app, allows users to take a photo of shoes, bags, coats or any items on the street and do an instant search of where to buy a particular piece online.

And with the advent of Google Glass and other intuitive, connected devices, this will only continue. Google has made no secret of its endeavours to connect to the luxury fashion world, teaming up through its social network Google+ with collaborators such as Diane von Furstenberg and more recently announcing collaborations with
the Council of Fashion Designers of America (CFDA). Google Glass was also featured on all the models in one of US Vogue’s September issue fashion shoots, while at the recent New York Fashion Week, US Marie Claire creative director Nina Garcia wore Google Glass and tracked her experience.

Wearable tech devices look set to be a new frontier in the luxury sector. According to data published by US market research consultancy IMS Research, there are about 14 million wearable tech devices - such as Nike Fuel Band, the wirelessly connected athletic wristband that monitors time, heart rate and personal performance. By 2016, the global market for such products could reach $6bn (£3.7bn), including connected eyewear, watches and eventually clothing.

Personalising the web experience is also another focus in future. Amazon - which recently began selling discounted luxury fashion brands such as Vince Camuto, Halston and Calvin Klein - already uses algorithms to present users with tailored home pages and suggested shopping lists.

Although the luxury sector was slow to join the multichannel world, it now leads the way in terms of innovation.

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