(This post is the Executive Summary of the report “Luxury, Digital, and Customer Relations: The battle for the affluent consumer has just started…” that will be published by VitaBella Luxury Wine on December 2018)
Everyone in the world of luxury goods, whether it be that of wine, beauty, jewelry or fashion, is asking themselves the same question: is it preferable use powerful e-commerce platforms or is it imperative to create one’s own in-house, multi-brand e-commerce platform? Which is best: selling wine on Vivino, JD.com or Alibaba, or one’s own online boutique? This week the Kering Group (Gucci, Balenciaga, Saint Laurent, Boucheron…) announced that they were dropping a longstanding partnership with YNAP to take more of its e-commerce in-house. This clearly sends out a strong signal. Because what is at stake here, apart from sales figures, is control of brand image and in-depth knowledge of their customers.
Personalized interaction with customers… that is really the key for brands. The relationship with the customer is absolutely fundamental, and the right channels need to be found to create on-line relationships with the same level of intimacy, quality and trust that can be found in store. The question of creating an online shopping facility, in parallel with existing sales platforms, has now become a major strategic decision. Whilst general platforms offer high visibility, which is what brands are looking for, plus a wide choice of products, which is what the consumer is looking for, developing and running a site dedicated to one’s own brand has significant advantages. It offers the opportunity to promulgate the brand’s values and history, to put forward tailored, relevant suggestions and, naturally, to better understand one’s customers.
These two approaches are therefore complementary in this ultra-connected world, since what the platforms are proposing is not a relationship with the customer but a connection and sales channel. But luxury brands now need to go further than this. Firstly, it is essential to have access to more and more precise data about consumers in order to know them better. Data that is too precious to share… And secondly because luxury brands are no longer content to simply sell their products. They need to establish an ongoing relationship with their customers by, for example, proposing experiences linked to their universe and their values. At a time when pop-up boutiques no longer have sales as their unique objective but prefer to focus on offering a unique and exclusive experience, the online offer also needs to adapt.
With this new impetus in the interaction between Luxury Brand and Customer, the affluent consumer will be subject to ever more pampering, and will consequently become ever more demanding, leading to a veritable battle between brands for their attention. The brands which will succeed in the years to come will be those who manage to gain a more precise understanding of the needs and desires of each customer, individually. The world of fine wines will be no exception. And the battle has only just begun!
(You can reach Guillaume Jourdan via LinkedIn)
