Harnessing Customer Data to Unlock the Luxury Market
When it Comes to Luxury, One Size Doesn't Fit All
Every luxury business must determine how to successfully reach, attract, sell to, service and retain these diverse and demanding customers, given that nothing about luxury is one size fits all. In fact, these customers tend to respond poorly to conventional strategies, experiences, products, solutions and services.
Retailers now understand that customer information is a competitive asset, and when used effectively can make a huge difference in attracting luxury buyers. Trusted, valuable information that gives insight and guidance is necessary for navigating and succeeding in the heterogeneous luxury market. For example, research from Epsilon and Luxury Institute indicates that brands that use information about an individual consumer’s buying habits and preferences during in-store visits can create a stronger buying relationship. Luxury businesses gain a competitive advantage when they become better at gathering, developing and leveraging a single trusted version of information about a customer and her or his relationship with the organization.
With so many technology options available, it's important to keep a proper perspective. In the luxury market, high tech isn't a substitute for the high-touch experience of one-on-one interactions. Technology is a means to an end, not an end in itself. Milton Pedraza, CEO of the Luxury Institute, believes that retailers will focus on building better relationships across all touchpoints – brick-and-mortar, online and mobile. “In 2015, we're extremely optimistic that the economic conditions will force brands to get moving on building better client relationships rooted in personal interaction rather than impersonal algorithms,” Pedraza predicts.
Luxury businesses must find ways to engage their customers on more personal and intimate levels, at each and every interaction, especially for those that are done face-to-face. Human intelligence should be used to foster deeper and better relationships instead of over-relying on business analytics. For this to happen, organizational leaders must empower their frontline employees to perform effectively across all customer segments and channels in order to get personal, harness valuable customer insights and information, and ultimately win the loyalty of luxury customers.