Luxury product consumers are often willing to pay more for premium goods and personalized shopping experiences. Those expectations create a unique fulfillment framework for luxury retailers.

KenFleming-Logistyx

Ken Fleming, president of Logistyx Technologies

Luxury goods are a lucrative market by nature. According to data from Statista, luxury industry revenue was estimated at $71.8 million in 2019, led by the luxury fashion segment, with revenue estimated at $25.4 million.

Like other consumer-facing retail categories, ecommerce sales increasingly drive the luxury industry. Initially, Bain & Company predicted that by 2025, ecommerce would hold 25% of market value compared with the 10% it held in 2019. That is no surprise, given the predominance of ecommerce across all facets of retail and supply chain business. However, short-term market values may look a bit different due to the impacts of the COVID-19 pandemic. In a more recent report, Bain & Company estimates that Q1 2020 will see a 25% to 30% drop in global luxury sales year-over-year.

While many retailers strive to meet customers’ ecommerce delivery needs by offering quick and affordable shipping above all else, luxury retailers view ecommerce fulfillment differently. COVID-19 notwithstanding, consumers buying luxury products are often willing to pay more for premium goods and personalized shopping experiences, creating a unique fulfillment framework for luxury retailers, from the point of purchase to delivery.

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To effectively meet these elevated ecommerce expectations, luxury retailers should consider the following best practices to help advance their end-to-end shipping strategies.

Prioritize white-glove customer service

In the age of ecommerce, service is king, especially for luxury retailers. Luxury goods typically warrant a concerted effort to ensure customer satisfaction and increase the odds customers will come back to make their next purchase. Especially during this unprecedented time, luxury retailers ought to remain consistent by providing exceptional customer service supported by an innovative ecommerce fulfillment strategy to help stay flexible and mitigate potential impacts of the coronavirus pandemic.

One way to ensure top-notch customer service is by gaining greater control over the supply chain and transportation management efforts.

Brands including Chanel, Burberry and Kering have bought sections of their supply chains to take ownership of production and thereby customer service and ecommerce fulfillment. Given the importance of personalization in luxury fashion, it follows that many leading retailers in the category prefer to eliminate unnecessary variables to ensure a seamless customer experience to complement the high-end nature of their products.

When elevating service standards, every upgrade makes an impact on customer experience. Some meaningful offerings luxury retailers can implement for a high-value customer experience include providing:

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  • Responsive customer service on multiple channels, including social media, over the phone, or live chat features on your website.
  • Package delivery tracking, including automated notifications and alerts to keep customers informed about the status and arrival of their high-value goods.
  • Pre-arranged return shipping labels to simplify the process for customers.
  • Broader shipping choices supported by an extensive carrier network that can help accommodate rush orders and overseas shipments or offer free or discounted shipping.

Before deciding where to invest in white-glove customer service options, luxury retailers should identify customer preferences by gathering and analyzing data on their purchase habits, shipping needs and what ecommerce fulfillment variables create loyalty to specific brands over competitors.

Emphasize reliability and transparency 

Many luxury retailers view parcel and ecommerce shipments differently than retailers selling other goods and services, given the increased thoughtfulness with which customers make top-dollar luxury purchases.

Of course, luxury goods sell at higher price points; therefore, the service, ease and reliability offered to customers throughout the shipping process from initial fulfillment to delivery and even returns matter far more than the associated cost. In a market known for high competition, quality and personalized customer experiences consistently stand out over speed of service and delivery.

In terms of transparency, younger consumers, in particular, increasingly value corporate social responsibility, so much so that 66% of global consumers will pay a premium to support ethical companies.

This response to increased awareness of ethical practices and consumer demand for corporate accountability are other reasons luxury retailers have taken aspects of their supply chains into their own hands. Because the prevalence of discount culture and a vast array of multi-brand ecommerce platforms increasingly pose challenges to luxury retailers, focusing on optimizing internal ecommerce strategies can offer greater control for ensuring an all-around white-glove brand experience. For example:

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  • Victoria Beckham hired in-house seamsters and pattern cutters in the interest of open and ethical labor practices.
  • Designer Eileen Fisher lists information on her labor facilities and product sourcing for transparency and sustainability.

An emphasis on transparency across the brand experience can also help foster customer loyalty. Luxury retailers should ensure parcel shipment updates are frequent, easy to follow and as thorough as possible—especially as fulfillment order times have fluctuated since the COVID-19 outbreak. Such communications will help retailers to gain consumers’ trust as reliable companies. From clarifying and committing to brand values to prompt and accurate tracking information, transparency in ecommerce fulfillment processes can positively impact multiple facets of a luxury retailer’s business. Given the price tag of luxury products, providing a first-rate ecommerce fulfillment experience is both expected and possible to achieve.

Rise to the challenge through technology

Luxury retailers seeking to offer superior customer service and transparency as part of their ecommerce fulfillment strategy increasingly understand the importance of leveraging automation to meet critical needs. The extra investment in technology to streamline ecommerce execution can easily be warranted and balanced by the high price-point of products and the brand loyalty gained.

Integrated parcel shipping technology enables these retailers to:

  • Provide customers greater choice: This can include free shipping or upgraded services for faster or better delivery experiences.
  • Tap into a broad network of carriers: Technology offers flexibility for delivery to different markets and a frictionless process for customers.
  • Offer shipment transparency: An important feature to help customers understand their order statuses, especially for parcels containing high price-point products.
  • Glean actionable insights through data visibility: These help retailers spend less time pulling data and more time analyzing it to make key business decisions and provide a more personalized customer experience.

For luxury retailers looking to take more ownership of their supply chains and provide a white-glove customer experience, an integrated parcel shipping solution can help optimize the fulfillment process to go above and beyond standard delivery expectations.

As supply chains need to evolve through the age of ecommerce, leveraging tools that provide advantages in increased transparency, connectivity and personalized customer service can give retailers an increased competitive advantage. Luxury brands that successfully combine white-glove service with end-to-end parcel delivery using automated technology can make continual supply chain improvements to leave a lasting impression on loyal consumers willing to pay a premium for the best products and services.

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Logistyx Technologies is offers a cloud-based transportation management system for parcel shipping.

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