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Sometimes The Old-Fashioned Way Is The Best Way To Measure Success October 30, 2013 (0 comments)
New York, NY—Welcome news of positive economic growth still comes amid ongoing uncertainty. So what lies ahead for the luxury industry? According to The Luxury Institute, luxury marketers are preparing for yet another year of uncertainty in 2014. Globally, hyper-growth of luxury in emerging markets--especially Asia-Pacific--is showing signs of softening, but mature markets are heating up again. Year-over-year increases in U.S. luxury product sales are picking up steam, and Europe also is on the upswing.
Luxury will remain a growth industry, but competition is fierce and brands are now concentrating on existing stores, price increases, cost reductions, and emphasizing higher-profit products, as well as improving customer conversion and retention.
After being seduced by an alphabet soup of technological advances, many luxury brands are discovering that sometimes just doing things the old-fashioned way is better. Here are seven trends that the Luxury Institute predicts for 2014:
- CRM services are underperforming. Many brands have found that outside customer relationship management consultants and systems are coming up short in both database and analytics, and as a result, are ditching them in favor of their own ability to manage customer relationships.
- Mystery shopping also often proves inadequate. Customer experience surveys and customer metrics are a more accurate way to measure sales team behavior.
- Brands need to know which channel is best at driving customers, but the most readily available data comes from online sources and does not take into account other influences leading to purchase, so simply asking the customer what drove them to buy can reveal more.
- The lure of “Big Data” is seductive, but only a fraction of collected data is relevant. About 20% of collected data gives 80% of predictability models, with emphasis on “predictability,” not certainty. Sometimes it’s better to just build strong customer relationships and ask directly how you can better serve them.
- The first real innovation in the online buying experience in a long time is looking a lot like offline—i.e., put a human being back into the mix. Online and multi-channel retailers are incorporating online personal shoppers, to curate and guide consumers, especially for retailers who serve tourists, as those visitors can be converted into long-term customers online.
- Luxury outlets are hitting the saturation point. While opening outlet stores was a winning strategy to pull many luxury brands through the recession, some are starting to reap negative consequences when true, full-price luxury customers feel the brand has become too diluted and flee.
- Customer culture rules. While all luxury brands claim to be customer-centric, not all truly are. Technology, big data and analytics are useless without empowered and inspired human beings to engage the customers daily.
To download a free white paper on the luxury trends for 2014, click here.