3.3 OMNICHANNEL IN LUXURY COMPANIES
The pandemic has accelerated this process of digitalization of companies and also of customers themselves, before the pandemic not everyone used to go on the internet and buy products from home, especially if these are luxury products and therefore with a certain price level.
In order to monitor consumer purchasing behaviour, the big luxury brands are starting to study big data to increasingly tailor the sales channel to that type of consumer using artificial intelligence and are starting to apply augmented reality to improve the
shopping experience.
To do this, they are using an omnichannel strategy to continue to maintain a constant relationship with their customers, who are now increasingly digital.
Large luxury companies have immediately started working on online platforms, Giorgio Armani for example, has partnered with Ynap to ensure a more effective and efficient shopping experience for its shoppers.48
Ynap (Yoox Net-A-Porter Group S.p.A.) is an Italian company active in the online sale of fashion, luxury and design products.
Another major company specialising in online sales, Amazon, has announced the launch of a new app dedicated to luxury designers together during New York Fashion Week 2020.
The American giant's new app, already officially launched in September 2020, offers luxury brands to American customers with an Amazon Prime subscription. Amazon Luxury Stores is an exclusive invitation-only experience, so only selected Prime customers in the US will be able to participate and it can only be accessed through the Amazon app.
Within this app, each designer will have their own store, the brands themselves will decide on products, inventory and prices, Amazon will only take care of the
merchandising aspect.
The first designer to open a store in the app was Oscar de la Renta with his pre-autumn and autumn/winter 2020 collections.49
The innovative feature lies in the technology of this app: thanks to a special 360°
viewer, customers can rotate the image of a dress worn by a virtual model. Shoppers can also choose the virtual model that best represents them, so they will choose the size, body shape, skin colour, etc.
48 https://www.ynap.com/news/the-armani-group-and-yoox-net-a-porter-group-come-together-to-design-distribution-model-for-the-future/
49 https://press.aboutamazon.com/news-releases/news-release-details/amazon-announces-new-shopping-experience-luxury-stores/
3.4 ADVANTAGES OF AN OMNICHANNEL STRATEGY
Consumers are increasingly demanding companies for their shopping experience.
Turning shopping into a unique experience by offering online channels for purchases but maintaining a high level of customer relations has become a necessity for companies that want to survive in such a competitive market and in an era of continuous evolution especially after the pandemic period.
With the omnichannel strategy we want to improve the services offered by the company; the sales numbers as the number of platforms for sales will increase, both online and offline and they will all be connected; the customer loyalty process, by making the customer more satisfied with the shopping experience he will become more loyal to the company and finally we will improve the brand image.
As far as luxury brands are concerned, out of all the companies they have had the most difficulty in opening up to this new type of market because most remain convinced that the luxury consumer wants to have an exclusive shopping experience in person. This is not what the sales figures show, at least 60% of all luxury sales are made online or are influenced by an online presence, so even luxury companies have had to change their strategy and invest in e-commerce to try to survive and remain competitive in the current market.
Nowadays, consumers have become increasingly accustomed to online shopping.
Buying online means looking at the product from the picture, assuming certain intrinsic characteristics, such as the softness of the fabric, and finally buying the product.
Not being able to touch or examine the item as in a physical shop, the consumer is not fully able to understand if that product will meet all their requirements and this leads to customers returning the item. According to the website Eurostep.it50 today's return rate is around 15% of purchases made online, rising to 25% in the fashion sector.
Whereas before traditional returns could only be made online, the mechanism has now evolved. With online-only returns, consumers had to take time to return the item, sometimes at their own expense, and they did not receive a refund from the company immediately, which made the customer dissatisfied and therefore the company tended to lose customers who bought online from its site.
With the rapid development of the omnichannel strategy, retailers have been able to provide customers with the ability to return items to physical shops. In this way, customers can receive an immediate refund or exchange the product. This return policy is very important for retailers because they can receive more feedback on consumer dissatisfaction and improve their products and services.
50 https://www.eurostep.it/resi-ecommerce-come-ridurli-piano-di-miglioramento-shop-online/
This new return policy also has crucial aspects to consider, in addition to the above-mentioned benefits, namely inventory strategy.
As many consumers have moved to buying on the online platform rather than in physical shops, retailers need to replenish online stock with offline stock.