June 24, 2015
Sales associate at Dior
Despite the rise in digital and mobile marketing in recent years, consumers still rely heavily on in-store sales associates to assist them in making purchases, according to a new report by the Luxury Institute.
The majority of consumers surveyed reported making most of their purchasing decisions in-store without researching online beforehand. Luxury brands looking to improve consumer relations should focus more attention on improving the in-store retail experience and providing consumers with ready assistance.
“Brands can see that for many luxury categories the store is still the most relevant channel," said Milton Pedraza, CEO of Luxury Institute, New York. "One way to improve the in-store experience is to create a great environment for people to learn about products and engage with products.
"[Also,] brands need to prepare, educate and compensate sales associates so they can engage with consumers one-on-one in a way that creates positive experiences. When people genuinely feel special they can engage with the products and engage with the brand ambassadors.
"Create a personal connection. It doesn’t always require Champagne and caviar. It just requires great humanity from sales associates."
The Luxury Institute surveyed consumers who earn a minimum of $150,000 per year, with average income of $289,000 and $2.9 million average net worth.
A little help
The majority of survey respondents reported that they do not research exactly what they want to buy before entering a store. Instead, respondents relied more heavily on the in-store retail experience in making purchasing decisions.
Luxury boutiques like Jimmy Choo must offer personal service
Male respondents were more likely to conduct research online prior to visiting a store, but they also reported making the majority of final purchase decisions in-store. Women reported being more influenced by what they see and experience in-store.
Despite these preferences, there are some products that consumers do research more extensively online. Twenty-eight percent of men shopping for watches reported entering the store knowing what they were going to buy.
Men shopping for watches like Patek Philippe often research online
“They have researched the watches so much and asked around so much that they come in with a very deliberate purpose," Mr. Pedraza said. "They know what they want before they get there.”
Additionally, 26 percent of women shopping for beauty products know what they are going to buy before entering the store.
“For beauty, people tend to be habitual about their beauty products. About 60 percent of sales in beauty are replenishment."
When it comes to discovering new products, both men and women reported learning more about products from sales associates in the store. Thirty-seven percent of men prefer to purchase jewelry in-store with the assistance of a sales associate.
Women found browsing stores without the assistance of a sale associate to be most helpful in finding out about new products. Fifty-seven percent prefer to look at apparel offerings in-store without assistance.
Women shopping for beauty products are often replenishing old ones
Relationship dynamics
Ultimately, creating a unified experience both online and in-store will best allow brands to appeal to luxury consumers. Seamless integration across channels is key to eliminating the conflict between digital and physical interactions, according to panelists Oct. 13 at Luxury Interactive 2014.
During the “Eliminating Channel Conflicts Between In-store and Online” panel discussion, the participating executives discussed how their brands have been affected by the divide, the challenges presented and possible solutions for creating a better consumer experience. All were in agreement that the role of the sales associate needs to be updated to amend the conflict and build more concrete relationships driven by consumer data (see story).
Consumers have often expressed their desire to use both online and in-store assistance when purchasing products. More than 70 percent of consumers expect brand digital channels to have knowledge of in-store product availability, according to a report by L2.
Accommodating both digital and in-store trends requires brands to adapt to ecommerce expectations of click-and-collect or free shipping, but also adhere to in-store demands. Many traditional brands face pressure from online retailers to offer better options for consumers turning to digital for both browsing and shopping (see story).
The best solution is to integrate digital and in-store offerings and create a cohesive experience for the consumer.
“If I am buying online only you can still reach out to me, without being creepy, but by being a real individual," Mr. Pedraza said. "Inject a human being into the online experience.
"It would be nice if I conduct a purchase online to receive a handwritten thank you note from a real person. You can create a relationship.
"You can engage with someone when you stop thinking channel and start thinking relationship. It’s a relationship. The sales associate can be who they are in any channel."
Final Take
Kay Sorin, editorial assistant on Luxury Daily, New York
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