To survive COVID-19, luxury retailers are being forced to master something they’ve always avoided: impersonal transactions.
The pandemic has driven high-end U.S. retailers far from their roots of engaging shoppers with stylized, personal—and unfortunately, high-touch—service. Think makeup and jewelry counters, personal shoppers and in-house tailors. Now, with consumers staying away from public spaces, retailers like Bloomingdale’s Inc. and Neiman Marcus Group Inc. are coming to terms with selling products via FaceTime and curbside pickup. But translating this into a lavish shopping experience sounds about as natural as turning a TV dinner into five-star dining.
“This is a transformative moment” for an industry that resists change, said Christophe Cais, CEO of the Customer Experience Group, a consultancy for luxury companies.
Retail’s new reality means that around 10 percent of physical luxury stores may close worldwide in the next three years, said Deborah Aitken, a luxury analyst for Bloomberg Intelligence. On the other hand, increased web sales could lead to wider marketing reach and more opportunities to target likely buyers using consumer data, she said. Aitken projects online sales could rise to 17 percent of the total for luxury at the end of 2020 — up from 12.5 percent at the end of 2019.
Now, companies must figure out how to conjure up their signature atmospheres, from iconic color palettes to warm smiles, when patrons aren’t actually in the building. Upping the ante is the fact that these companies’ customers expect perfection—a Birkin shopper in one of Cais’s focus groups, for example, thought her bag was cheaply made when it arrived in six months instead of nine. This attitude stands in stark contrast to the rest of retail, where companies like Amazon.com Inc. and Walmart Inc. have built up their shipping to get goods to customers as fast as possible.