At the core of the luxury industry lies an approach to exclusivity, craftsmanship, individuality and the nimbleness of the human touch. In an age where mass-production has propelled the global economy onto a completely different level, luxury has survived because of its nuanced ability to narrate stories and showcase rare skills, such as bespoke tailoring and leather-making, to a set of consumers who want to stand out from the majority. Enter the dawn of the ‘Phygital’ retail experience.
Today, luxury brands are faced with a challenge. According to Customer Growth’s Johnson, people are buying less clothing but are spending more on experiences. In the mid-1980s, 45% of consumer spending went to goods, the remainder to services. Recently, those figures are 31% (goods) and 69% (services), respectively. The evolution of e-commerce has influenced the way consumers approach retail; the ease and accessibility of online purchases has placed considerable pressure on brick and mortar businesses that are unable to provide their millennial clients memorable retail experiences. A ‘phygital’ (physical meets digital) strategy adds a layer to brick and mortar shopping in order for brands to personalise their client experience above the aesthetics of their products and store.
Some luxury houses are adapting to this shifting consumer habit in order to solidify their individuality, an important feature amongst their peers, in an industry which sees a lot of activity on a screen and without the aid of a physical retail presence. In a survey conducted to luxury industry insiders, WGSN and Walpole found that 53% of them are looking to personalise online experiences and 25% want to offer consumers unfiltered access to behind-the-scenes of the brand. Indeed, in a digital world, transparency has become an attractive feature to individuals who value craftsmanship and brand narrative. These insiders believe in the power of the ‘phygital’; according to those interviewed, this trend helps cut through the noise by providing curated content and creates a unique online experience. With the help of exclusive digital components, flagship stores can further convince their clients of their value through personalised online experiences.
So what are some examples of the ‘phygital’ luxury retail experience? One emerging development that has proven popular in boutiques is the concept of virtual try-ons, in which ‘mirrors’ project an image of the shopper wearing a product they are interested in – see Burberry and Tom Ford’s beauty store in Covent Garden for evidence of this practice. Expect to also see more stores using digital formatting to aid the client customise their purchases. Jewellery brand FRED invites consumers to its Paris stores to personalise its Force 10 bracelet using a combination of an exclusive app and in-store device. In this case, the phygital allows the brand to curate two key facets of the luxury experience – expression and individualism.
Also blossoming within luxury retail is the growing use of NFC (near field communication) and RFID (radio frequency identification). With the partnership of brand smartphone apps, these are becoming common additions to the technology and retail hybrid. According to nfs-forum.org, 90% of smartphone owners use their phones while in-store and by 2020, 2.2 billion devices will be NFC-enabled. NFC’s primary use is to track the client’s preferences; by encouraging the consumer to download their app, a brand can send push notifications to the shopper when they are in the store to inform them where they can find their favourite product, for example. RFID, meanwhile, transmits info about tags on products and was used mainly used for stock controluntil more brands recognised potential. Burberry have been using NFC in their stores since 2012 – tags on clothing are tracked and trigger changing room mirrors to feed videos relaying info about the piece such as how it was made and how it looked on the catwalk.
Yet the trend of augmented reality and the art of blending the traditional commercial paradigm to a more digitally enhanced experience warrants reflection. For luxury brand retailers and brands to successfully transition into the coming decades, the industry as a whole should be wary of the bells-and-whistles stigma that may come with new technologies. Today’s luxury consumer is savvy, well-informed and sophisticated. To be fully future-proofed, brands need to not only assure the practicality of their interaction with their exigent and ever-evolving consumer, but also cater to generational and cultural bias to optimise the positive impact of magic mirrors, social engagement, and store-based client experiences.