Content is becoming the currency of the digital economy, since it is the best way to provide real value to consumers before they decide to make a purchase. It’s also the best way of developing an audience that loves a brand, which is why more and more companies are developing content strategies to connect with their consumers. Online brands are able to deliver such content consistently to their customers, while brick and mortar competitors struggle to share more than sales and promotions.
If you follow retail news, you’ve probably become accustomed to hearing about whether or not online retailers like Amazon are going to push out brick and mortar competition. As the debate about the future of retail rages one subset of the retail market -- luxury goods -- seems to be gaining ground in eCommerce platforms. In fact the CIGI Global Survey on Internet Security and Trust found that 13% percent of people spent more online in 2016 than they ever have before. This is in part due to the efforts of online retailers who are working to instill trust with new customers.
In today’s digital world trust is everything. You have to establish yourself as an influencer and a credible voice in your industry before anyone will consider what you have to say. The same goes for luxury retail, since people expect retailers to offer knowledge and expertise for the shopping experience. And while some might say that eCommerce luxury brands are not able to walk into a store and meet the team, they are to establish touchpoints brick and mortar retailers can’t, that create enough trust to motivate a purchase.
Additionally, as more consumers are becoming more digitally savvy, they are looking for brands online that they can trust. The result has been an increased demand for authentic experiences that either introduce consumers to brands in winsome and innovative ways, or the development of educational content to put the consumer in a position of power. Research from the Boston Consulting Group found that authenticity is one of the top things consumers look for when selecting a brand.
eCommerce innovators have responded by introducing people to their brands with engaging presentations, or the development of educational content to put the consumer in a position of power. In doing so, direct to consumer luxury brands are able to create the same trust their brick and mortar competitors have, while delivering better prices and products. The following are some of the top ways direct to consumer and online luxury brands are reshaping the future of the market.
Empowering Through Education
When it comes to luxury, quality is everything. And in most cases, determining quality requires experience and product knowledge that is inaccessible to consumers. That’s why luxury goods have been slow to transition to eCommerce, because they have struggled to bring employee knowledge and expertise online.
Kevin Canning is an expert on eCommerce and the CEO and founder of Pearls of Joy, a direct to consumer online store, that specializes in high-quality pearl jewelry. He explains why the luxury education gap is a problem, “The consumer is left with two options. Let price be their guide, assuming higher price points directly correlate with quality, and/or research and arm themselves with the knowledge needed to make an educated purchase.” These challenges are exactly why consumers have been hesitant to make online purchases.
Fortunately, online sellers are offering better education on their products to help close this gap. Canning explains one such effort, “In 2004 I co-founded Pearl-Guide.com, a non-commercial, educational website/message board, which now boasts thousands of members from around the world, from consumers to pearl farmers. It has grown to be the world’s largest and most respected source of pearl education.” By creating an educated consumer base, luxury brands can empower their customers to shop online with confidence. Innovators disrupt their industry by thinking about what the future could look like, rather than settle for the status quo, which is precisely why eCommerce retailers are making such significant changes.
Content is Key
Content is becoming the currency of the digital economy, since it is the best way to provide genuine information to consumers before they decide to make a purchase. It’s also the best way of developing an audience, which is why more and more companies are developing content strategies to connect with their consumers.
Canning shares, “In the 3 years since I started sharing the details of buying trips via our blog, our revenue has tripled, something that speaks volumes about the power of transparency and how it builds trust.” Transparency is, indeed, the key to building trust with consumers. When so much of the business occurs behind the scenes, customers want to look behind the curtain and know more about the process. Content is the vehicle that helps brands deliver transparent information effectively. Additionally, with the increasing prominence of social media platforms, any forward thinking company will have to be able to deploy content over multiple channels.
A great content strategy drives sales and builds a competitive moat around a business. If you aren’t taking your content strategy seriously yet, get started!
Direct to Consumer Quality and Rates
eCommerce brands have another major advantage, direct to consumer pricing. It’s no secret that while direct to consumer luxury isn’t cheap, the prices are generally more reasonable relative to the quality of the product. Brick and mortar retailers have to markup prices to cover operational costs that are unrelated to a product’s value. Canning shared that in many cases, luxury products are often marked up 500% or more when featured in physical stores.
For purely eCommerce brands, however, the price always reflects the value of the product. As Canning put it, “I think it comes down to price, quality, and customer experience. The direct to consumer brand has the luxury of controlling all three factors. Done right this is extremely powerful.” It comes as no surprise that as consumers become more focused on the value they derive from goods, direct to consumer options are gaining in popularity.
Jewelery stores are notorious for sky-high markups — sometimes exceeding 1,000%
The Result: Brand Champions
These factors all come together, not only in growing the number of people who buy luxury goods online, but also the number of them that share their shopping experiences with others. A report from Deloitte indicated that on average 32% of all consumer groups make purchases based on information they get from social media, which is why having brand champions in the digital era is essential.
Consumers that look for recommendations from influencers and friends are more likely to make a purchase based on a referral. As Canning put it, “When someone goes out of their way to advocate to strangers, that’s powerful stuff.” For brands looking to reach customers, the key is being authentic, empowering the customer with knowledge, and demonstrating the quality of their goods compared to competitors.
That’s precisely why the future of the industry will be online, because eCommerce retailers are able to meet all of those needs right where consumers are, their homes and their smartphones. As more luxury goods consumers move their shopping online, brands that are authentic and work hard to establish trust will be the most successful.