Luxury Online: Social Influence in High-End Retail
Luxury retail customers demand sophistication from their brands. At the high-end of the retail sector, that means developing a robust online strategy to increase your brand’s online social influence. Luxury retailers like Nordstrom are confounding the marketplace by outperforming other retailers in today’s sluggish economy. Due in part to the loyalty and high disposable incomes of luxury consumers, the strength of luxury retail sales gives high-end retailers breathing room, allowing them to focus on customer experience management and other progressive strategies.
Online social influence is at the heart of luxury retail’s quest to connect with modern consumers. Simply put, online social influence is a brand’s ability to transcend traditional marketing tactics designed to talk “at” consumers and develop new, technology-rich strategies that distribute information through interactive social media platforms.
Although many luxury brands are enjoying healthy returns now, going forward consumers will judge luxury brand value based on social influence and their ability to forge meaningful online connections. With that in mind, here a few strategies luxury retailers can employ to build and optimize their social influence.
1. Build and engage social communities. Consumer conversations are the currency of social influence. By building and engaging social communities through blogs and other venues, luxury retailers have the opportunity to create dialogs with consumers and convert customers to brand advocates. For example, this year’s Fashion Week featured unique access for influential Tumblr bloggers, giving luxury brands the ability to connect with consumers through a highly popular microblogging venue.
2. Promote viral online recommendations. Online recommendations are the 21st century equivalent of word-of-mouth. Recent studies indicate that more than half of consumers conduct online research before they make a purchase, underscoring the need for luxury retailers to insert themselves in the process and encourage viral, web-based reviews. Social networking application tools like Empathica’s advocacy engine GoRecommend allow consumers to rapidly share positive retail experiences while equipping luxury retailers with powerful tools for promoting viral brand messaging.
3. Implement online review mechanisms. Brand-based product review systems have the ability to boost sales and cement loyalty relationships with customers. Nearly three-quarters of consumers (including luxury retail consumers) indicate that customer reviews influence their purchasing decisions. Consequently, luxury brands like Saks Fifth Avenue have started to incorporate sophisticated review mechanics into their brand websites.
4. Drive mobile connections. If you think mobile retail is limited to low-end purchases, you may be surprised to learn that during the 2010 holiday season the top mobile purchases on eBay were for cars and trucks. This confirms the fact that today’s consumers are willing to make large purchases via mobile devices and reinforces the need for luxury retailers to develop mobile-optimized websites and/or apps.
5. Prioritize multichannel engagement. The rise of social networking platforms like Google+ Hangouts demonstrates that the curtain between brick-and-mortar and click-and-mortar has disappeared. This reality means that luxury retailers need to leverage multiple connection channels in their brand research, marketing and advocacy efforts. Most importantly, brands must exercise intentionality in the quality of their content and the authenticity of the relationships they're creating across every channel.
The ramifications of the connections between social media, mobile and in-store experiences are monumental, particularly for luxury retailers. Those brands that refuse to proactively build and optimize social influence risk irrelevancy in the marketplace. However, brands that aggressively develop their social influence position are on track to achieve gains in market share and create deeper customer relationships.
Emmanuel Probst is vice president of retail for Empathica, a provider of customer experience management solutions to some of the world’s most respected brands. Emmanuel can be reached at eprobst@empathica.com.
