All eyes might have been on the Milan collections, but the big business news this week is back in London where Natalie Massenet announced her move to Farfetch as co-chairman. An Instagram Story featuring Massenet with José Neves answering a Q&A followed – do watch it via @Farfetch before it disappears.
Otherwise, some interesting stories this week debating retail tech – what consumers do and don’t want on the one hand, versus why the industry hasn’t adopted artificial intelligence faster, on the other. Both are worth digging in to and digesting. Beyond that, there are new campaigns from Calvin Klein and Converse, as well as a scathing (but amusing) piece over on Digiday about just why fashion advertising is all out of (terrible) ideas. And if you’re still not sure about your video strategy, you might want to pay attention to the fact YouTube users now watch one billion hours per day.
Consumers don’t want Amazon or Google to help them shop [Bloomberg]
AI can make us all dress better, so why isn’t the fashion industry using it more? [Fast Company]
How Neiman Marcus is turning technology innovation into a ‘core value’ [Retail Dive]
Tommy Hilfiger looks to technology as it combats Macy’s decline [Bloomberg]
The trouble with all those t-shirt slogans about diversity on fashion’s runways [Quartz]
Natalie Massenet joins Farfetch as co-chairman [BoF]
How teen retailer Aerie is thriving while its competitors flounder [CNBC]
Céline names new CEO, joins Instagram, announces plans to launch e-commerce [The Fashion Law]
Despite the fact email is one of the most cost effective forms of digital marketing, and a proven route to drive traffic, only 30% of luxury brands are using it to its full potential, says customer engagement specialists ContactLab.
Its new report, conducted in conjunction with Exane BNP Paribas, suggests email marketing practice is relatively primitive in the sector, and reveals an opportunity gap surrounding better segmentation and personalisation of content, as well as integration with other channels.
It highlights brands including Burberry, Cartier and Armani as leading on its “Email Competitive Map”, comparative to others such as Cèline, Prada and Givenchy who are dragging behind. Unsurprisingly, such email performance seems to align with overall digital competency, according to the research.
Other negative factors specific to email strategy include excessive frequency and an overwhelming commercial bias. But it’s brands who do not exploit data collection to achieve full segmentation that create the largest impression of complacency, it suggests.
Marco Pozzi, author of the research, says: “Achieving customer segmentation will always be a challenge but there remains a lot of room for luxury brands to differentiate in their emails and create more personalised campaigns. Simply sending generic content and treating all customers as one does not build a relationship with customers. Customer shopping habits have changed and they expect an integration of different channels as part of the omnichannel experience. ”
It’s not all bad news however, there are a few luxury brands who do already distribute personalised messages. Of those, Dolce and Gabbana is leading, followed by Armani, which addresses recipients according to gender/title, building a strong relationship with customers in the process.
Continuing on a positive note, ContactLab pointed out that, across the board there is good performance on email localisation (key languages) and structure (composition, visualisation).
“With the modern customers having an overload of content and often bombarded with emails, brands need to ensure the emails they distribute are relevant and thus capturing the attention of the consumer,” Pozzi adds. ContactLab’s study suggests customers prefer a varied mix of content that isn’t too commercial. Hermès leads the way with a balanced mix of branding, commercial and store-focused content, it highlights.
The report outlines the fact email marketing offers opportunities for brands to receive large amounts of traffic via smartphones and tablets particularly. Time spent browsing on such devices is notoriously short, so targeted emails that stand out from the crowd are essential.
So what does the future look like for email marketing? Luxury brands need to review the different services they offer and integrate cross-channel communication. A small number of brands ask for ZIP codes and postcodes, which could be used in conjunction with store locators. Elements like ‘buy now’ buttons and links to shoppable apps should also be introduced. Right now, only Cartier includes a “Book an Appointment” tab and only Burberry offers a “Collect in Store” option. Technology to incorporate cross-channel communication through email is already available, so expect to see more of this sometime soon.
It’s worth remembering that although email is only one aspect of the ecosystem, the impact of effective digital marketing can result in a 40% increase in revenue. A separate study by McKinsey also shows that 75% of luxury consumers interact with at least one digital touchpoint before making a sale in the offline world. A strategic use of email that caters to the user’s needs must be implemented.
Hey, guess what – e-commerce is becoming really important to the luxury sector but not enough luxury brands quite ‘get it’ yet.
OK, tell us something we don’t know. But cynicism aside, it’s always interesting when someone pulls that kind of information together and puts it into context. And that’s what L2’s latest Digital IQ Index for fashion has done.
I decided not to cover this story when it came out last week as the headline that Burberry’s doing so well in digital didn’t really throw up any surprises. But digging deeper, it stunned me how so many luxury brands are still not thinking truly digital.
Why does it matter? Well, as much as 83% of luxury growth last year came from online sales. A year earlier the figure was just 33%, up from a pretty pathetic 5% from 2010 to 2013 (I say pathetic, of course, because the mass-market had been happily getting online for years before that).
Why is luxury so slow?
Not that it’s such a surprise that luxury has been slow coming to the table. The sector’s $129bn in offline apparel sales are pretty impressive without the relatively tiny $210m in online sales. But with the latter figure set to double in five years and continue soaring after that, and with many consumers increasingly expecting a sophisticated approach to online, luxury can’t continue to bury its head in the sand.
Some brands are getting it right – very right. L2 said that the top 10 brands accounted for less than a quarter of that $129bn in offline sales. But online, they account for 65% of sales – yes, you read that right. On the downside, it also means that plenty of brands are getting it wrong – very wrong!
From genius to feeble – how brands fare
Anyway, the report looks at a large number of luxury brands and how they’ve performed online generally and in e-commerce, taking into account the many features designed to make the user journey easier/more pleasurable.
So, who’s doing well? Yes, Burberry’s out there in front (as it usually is, although it did drop back a little in last year’s list). It beats Kate Spade by one point with both given ‘genius’ status by L2. Burberry stands out for its well-rounded approach to both established platforms and emerging ‘cool kid’ platforms like Periscope and SnapChat, and for its upgraded mobile channel.
Burberry has invested heavily in improving the buying experience on mobile and its mobile penetration tripled after it updated its m-commerce channel.
Cole Haan was also singled out for praise in this area and for reducing mobile checkout from around 15 clicks to one thumbprint by using ApplePay.
Plenty of other brands are getting it right too. Digitally ‘gifted’ brands in L2’s list include Ralph Lauren, Louis Vuitton, Gucci, Michael Kors, Bottega Veneta, Hugo Boss, Jimmy Choo, Diane von Furstenberg and Dolce & Gabbana. Valentino also came into the gifted category, which is great given that it was so slow getting online in the first place. In fact the New York Times said that since arriving on Instagram, the brand has posted more than almost any other. Go Valentino!
But L2 is pretty scathing about some other luxury labels. Chanel, Paul Smith, Balenciaga, Prada, Alexander McQueen, Alexander Wang and Dior may be fashion influencers to you and I, but L2 said they’re digitally ‘average’. It also said Chloé and Pucci are ‘feeble’. And Céline, Jean Paul Gaultier, Givenchy, Kenzo, Miu Miu, Sergio Rossi and Vivienne Westwood are ‘challenged’. Ouch!
What’s the problem?
Some brands are doing lots of things wrong, it seems. That can include not bothering to find out any extra information about their customers online, apart from their gender and birthday. While face-to-face they’re falling over themselves to find out as much as they can about them in order to improve their in-store shopping experience, online, they just don’t seem to care. Bizarre.
And many aren’t global enough online, even though they are offline. They appear to think their brands are strong enough not to have to speak to potential customers globally in their own languages. Big mistake says L2.
Any more faux pas? Yes plenty. One of the most interesting is that they don’t get that search is key and a social media ad video strategy isn’t enough to make them visible. Paid search is being neglected, which is a major obstacle to growth in an increasingly crowded e-commerce space, L2 said.
There’s more, a whole lot more but I doubt many people would read that far if I reported it all. It does seem strange that such a report full of criticisms could come out as late as 2015. We live in a world in which online just shouldn’t be ignored by so many companies that are so far ahead of the pack in so many other areas.
Can’t wait for next year’s list to see whether the “must try harder” message has got through.
This post first appeared on Trendwalk.net, a style-meets-business blog by journalist, trends specialist and business analyst, Sandra Halliday