3 Ways Luxury Brick-and-Mortar Retailers Can Win Against E-Tailers

The latest Empathica Consumer Insights Panel survey revealed that almost half of Americans (48.1 percent) prefer shopping for luxury products online. This number will continue to grow if store retailers don't take action. The real threat comes from the ability to scan SKUs in-store from their smartphone apps to instantly compare prices with those offered online. Since e-tailers are generally less expensive than brick-and-mortar retailers, shoppers order online from their smartphone and walk out of the store empty-handed. Simply put, brick-and-mortar stores are facing a harsh reality: they're quickly becoming showrooms for e-tailers.

Here are three ways luxury retailers can continue to drive traffic, enhance their brand loyalty and increase in-store sales:

1. Help build the shopper's identity. Only 38 percent of respondents to the consumer survey felt they received superior customer service when making a luxury purchase. Conversely, almost one in three consumers said they consider highly knowledgeable and well-trained employees the most important element in purchasing a luxury product.

These findings emphasize the importance of ensuring sales associates not only know the products, but also connect with consumers on a personal level. One way to enable this type of behavior is to have associates sell the "benefit of the benefit."

A sports coat, for example, goes well beyond keeping the consumer warm. It's an opportunity for them to build identity. Does the coat have a British feel? Does it remind the consumer of the sports jacket his dad used to wear during family vacations when he was a little boy? The store associate can use the jacket as an opportunity to transport the shopper to an idealized time and place.

2. Focus on the little touches that matter. More than a third of survey respondents indicated that the retailer didn't communicate with them following their luxury purchase. Half the battle — getting the consumer to frequent your brand — is already won when they step into your store. The issue for most retailers, however, is that they fail to fight the other half of the battle: post-purchase follow up.

Clothing designer Anne Fontaine does a nice job of maintaining a relationship with the customer, even after the sale is complete. The brand sends out handwritten thank-you cards. It's more work and time consuming, but luxury retailing is about fostering a personal relationship between the brand and the customer. A generic email typically won't leave a lasting impression or encourage future loyalty.

3. Deliver an experience that's hard to replicate. Duane Reade, a New York City pharmacy that also offers salon services, is a prime example of what it means to deliver an exceptional experience. While most salons offer certain services at an additional price, Duane Reade offers them for free. By offering a unique and personalized experience, Duane Reade's customers feel that they've received VIP service and are likely to tell their friends. While this type of service may increase costs, it also increases the sense of one-on-one personalized attention that ultimately drives long-term customer loyalty.

This type of personalized care can also contribute to point-of-sale success in-store. Although the customer made the appointment for her hair, she's also likely to be relaxed, confident and interested in the other items offered to make her look and feel great. She may want to add new earrings or a scarf to complement her eveningwear, which can also be purchased at Duane Reade. She's just become a brand advocate because she wasn't inundated with sales and coupons but rather was given very relevant recommendations based on her unique situation.

Regardless of personalized offers, it's a reality that consumers will still compare prices on their smartphones. The last opportunity to rescue a sale is to empower sales associates to reduce or match a product's price.

Brick-and-mortar retailers have the upper hand when it comes to creating emotional touchpoints, which should be leveraged to encourage in-store sales. While many e-tailers have a price point advantage, they're a "cold" touchpoint with consumers. Brick-and-mortar stores have emotional value that can't be matched online.

For example, websites thank you for your purchase and indicate that "your item has shipped!" A store associate, on the other hand, says something like, "I'm glad we found the perfect dress for your graduation ceremony. Enjoy wearing it on the special day!" This emotional touchpoint helps create a memorable experience and the store becomes a destination for trusted shopping advisors.

As evidenced by these examples, it's clear that brick-and-mortar stores have a critical role to play in the overall retail experience, despite growing e-commerce sales. By focusing on the areas where they have unique advantages over online merchants, brick-and-mortar retailers can continue to deliver the warmest customer experience that will engender long-term loyalty and drive brand advocacy.

Emmanuel Probst is the vice president of retail for Empathica, a provider of customer experience management solutions. Emmanuel can be reached at eprobst@empathica.com.