Abstract
Luxury brands took to online selling belatedly, but they realized that they must be where their customers are. But this posed a problem for them: how could they maintain their aura of exclusivity in an online world, where e-commerce portals selling discount items are just a click away? By combining the elements of O2O worlds, luxury brands have achieved a synergy with their physical stores. Luxury brands have been able to convey their aesthetic appeal, store trust, shopping experience, customer service, and sense of power online as well. Online presence helps in displaying products, providing information, selling, and linking inventories of various stores. In that sense, the omni-channel experience has helped build customer experience for luxury brands as well. This chapter explains how O2O integration helps luxury brands combine their exclusive aura with online capabilities to deliver customer engagement and service, thereby building brands in the long run.
TopLuxury Brands: Online Or Offline
For years luxury brands have faced a dilemma of whether to go online or not. These brands have maintained their aura of exclusivity and avoided going online. Their stores are found on high streets of fashion, their interiors, design, people and experience – all emit luxury at every step. Luxury brands spell class the world over.
The online environment posed a dilemma for them. Should they limit their presence to physical stores only and maintain their exclusivity or should they go online and risk rubbing shoulders with lower-end brands, and face the danger of losing their exclusive appeal? Moreover, the Internet is replete with sites selling imitation or fake luxury goods. Would customers trust anything purchased online? High-end companies also face the risk of losing control over their brand image and storytelling since customers yield more power online. Kapferer (2017) writes that the democratizing interactive nature of the internet compels a change in traditional luxury communication strategies.
Another problem is exclusivity, which can be maintained in physical markets by having stores in high-end retail streets and in five-star hotels. There is no such distinction online – one website is as good as another. A discount store site is just a click away from a luxury site, hence it is difficult to maintain an aura online. Devoid of store experience and fawning store assistants, online posed a real problem for luxury brands. But online does offer an advantage: high-end customers can browse and shop from the privacy of their homes. By not going online, luxury brands realised that they would be losing out on their customers in a big way.
Key Terms in this Chapter
UX: User experience (UX) consists of delivering an easy and delightful experience to people as they interact with a company’s digital properties. It is an online function and consists of ease of using the website, navigation, discoverability, interacting with others, comparison, ease of payments and buying.
Touchpoint: Whenever a potential customer comes across a brand in the physical or online world, it is called a touchpoint.
O2O: Online-to-offline refers to the strategy of companies to integrate their online and offline channels to deliver a seamless customer experience and to drive sales.
Digital Brand Ecosystem: Digital brand ecosystem consists of all the services delivered by a brand that helps customers in completing their tasks.
Consumer Decision Journey: The process by which a customer goes through before and after buying a product is called consumer decision journey (CDJ).
CX: Customer experience (CX) is the interaction between a company and consumers when they experience a brand’s products and services. It includes perceptions and feelings resulting from all the touch-points that a person experiences with the brand.
Omnichannel: Integration of all channels of a company to offer a unified brand experience across devices and across physical and online channels.