For luxury retailers around the world this has probably been the most uncertain year most managers have experienced. eCommerce has been a savior for those who made the right investment in the preceding years. For others the growing pains are obvious to observers as the industry changes. However, the needs of luxury retailers and brands in general have changed. The limitations of physical shopping experiences has taken away some of the added value these brands bring. This is particularly the case for large luxury department stores. Indeed, these retail brands are struggling to define what a bespoke shopping experience truly means. The current consensus in the industry is that it will take exceptional customer service and shopping experience to get customers to stores.
Global luxury brands, like Canada Goose, Swarovski have chosen to adapt to this reality quicker than others. Canada Goose has increased its eCommerce investments in a significant way. The company benefited from a pandemic driven desire by customers to do more outdoors. Additionally shares price jumped 12% on 30th of September. However, overall revenue has fallen by more than 60% this year compared to last year. As a result the company is restricting manufacturing of new clothes and cutting back on new store openings.
Canada Goose plans to cut inventory significantly and is focusing on a brand first approach. They intend to focus on direct to customer sales through the company’s website. Competitors have given customers huge discounts to clear out inventory but Canada Goose believes that strategy can dilute the value of a luxury brand. Early indications from the lucrative fall/winter season shows this might be a winning formula for luxury brands.
Similarly, crystal and accessories brand Swarovski has added significant innovations to improve its shopping experience. The Austrian company has opened a so-called crystal studio in Toronto. The “digital concept store” mixes brick-and-mortar operation with digital elements for a modernized and interactive shopping experience. They added augmented reality screens to stores catering to shoppers who want to quickly select products. Also a sparkle bar for people to try on products. This was all done in an effort to create a memorable in-store experience for everyone for discerning customers.