Gucci, Burberry and Ralph Lauren maintain highest levels of omnichannel service

This Vogue Business Index article is part of our Advanced Membership package. To enjoy unlimited access to The Long View from Vogue Business and bi-monthly Market Insights Reports and webinars, sign up for Advanced Membership here. This is one of the five chapters comprising the Vogue Business Index: Winter 2022/23 edition and should be read in conjunction with the others. Please use the table of contents below to navigate between the chapters of the Vogue Business Index: Winter 2022/23 edition. Key takeaways: Find the right way to chat: Helping consumers get in touch with a human when shopping online has proven to be a winning strategy for brands, whether via live chat or social media. Whichever strategy brands take, they should ensure it is easy to use and helps build trust rather than frustration. Little change, what gives? Brands seem to be cutting features such as click-and-collect, and few have made any omnichannel improvements over the past six months. Consumers are once again enjoying shopping in stores, but this is no excuse for rolling back the quality of their digital experience, given the share of consumers still shopping online. Fast growth in the Middle East: An increasing number of brands are now operating in the Gulf countries. The huge enthusiasm for luxury brands that exists in the region offers plenty of marketing opportunities. Brands should aim to keep in mind the culture of specific countries to deepen that relationship even further. The nuance of post-lockdown customer service Luxury brands have been refining their omnichannel operations since pandemic restrictions lifted around the world, with some evidence that features added over the last two years are being dropped as brands focus on a narrower set of digital touchpoints with consumers. The brands at the top of the rankings for the winter 2022 edition of the Index, such as Gucci, Burberry and Ralph Lauren, are not being rewarded for doing much more than they did earlier this year but for maintaining their comprehensive level of cross-channel service. One of the casualties of this new stripped-back omnichannel approach is live chat — the ability to receive customer service from a brand via a chat function on its e-commerce portal (sometimes through automated chatbots or with human brand representatives). The share of brands offering this function has decreased to 57 per cent from 65 per cent since winter 2021. A similar decline can be seen in the share of brands publicly advertising in-store appointments, which is down to 58 per cent from 68 per cent. On the flip side, more than twice as many brands (45 per cent) now offer some means of connecting directly with a brand advisor as did in winter 2021 (22 per cent). In terms of these customer service channels offered by brands, the use of messaging apps such as WhatsApp is increasing as email and live chat declines. The majority of luxury consumers worldwide (53 per cent) say being able to talk to a customer advisor directly while shopping online is important. However, native instant customer support services such as live chat are valued by an even greater share (61 per cent). Those shares are even higher in China, where 62 per cent stress the importance of a direct line to a customer advisor, rising to 70 per cent for instant customer support channels. Either way, most consumers want brands to prioritise making it easy as possible to get in touch. Hugo Boss has found that messaging with photos typically works better as a sales tool than scheduled video calls, despite the hype around the latter. Native tools can be more fiddly or bug-ridden than WhatsApp or iMessage, so brands can be forgiven for trying to make the most of this facet of digital clienteling. What’s more, it enables consumers to connect with brands via apps that are already part of their everyday life. Getting rid of a tool that consumers can access instantly while shopping will have its own tradeoffs. Brands need to ensure that any customer assistance services via social media are clearly advertised and are easy to use for the consumer. It is no surprise that the leading Index brands tend to be the ones that offer the widest variety of ways for customers to get in touch (Louis Vuitton presents six different options on their website). Brands focus on delivery. A mistake? Index brands have a greater digital presence in the UK (97 per cent have an e-commerce store) than in any other country. The US (95 per cent) comes in a close second place. Appointments and live chat are not the only pandemic-era channels being abandoned; some brands are rolling back even bigger omnichannel features, too. Most notable among these is click-and-collect, with 60 per cent of Index brands now offering buy-online-pickup-in-store (BOPIS), down from 66 per cent in winter 2021. No additional brands are offering cross-channel returns since last year, and the ability to reserve items for in-store try-on or purchase remains something of a rarity (offered by just 25 per cent of brands). Where progress has been made is on delivery times. The share of Index brands offering express delivery has increased from 53 per cent in spring to 67 per cent in November — no mean feat given the ever-increasing demand for parcel delivery worldwide. However, our survey data shows that fast delivery is not all consumers want from luxury brands. Two-thirds (66 per cent) of consumers say the speed of shipping options is an important factor in luxury purchases. This is particularly true in European markets such as the UK (71 per cent), Spain (71 per cent) and Italy (71 per cent), as well as in China (70 per cent). Yet, rated even more highly are cross-channel returns (79 per cent) and stock availability across channels (75 per cent). Therefore, brand ambitions to speed up delivery infrastructures should not come at the cost of further investments in technology that could improve the shopping experience across physical and digital. Leading omnichannel brand Ralph Lauren is trying to spur market growth in the US by launching new stores in an ‘ecosystem approach’, reusing a strategy that led to success for the brand in China. This involves a flagship supported by supplementary smaller outlets across a city, with digital and wholesale working as part of the overall offer. This both lifts digital sales and leads to consumers spending more on average as the ease of doing business with the brand increases. The Middle East market continues to grow It was all eyes on Qatar this winter as it played host to the 2022 Fifa World Cup, with over a million visitors heading to the country. Louis Vuitton recruited longtime rivals Lionel Messi and Cristiano Ronaldo in photos shot by Annie Leibovitz for a campaign in the run-up to the tournament. Meanwhile, the World Cup trophy was transported in a custom-made Louis Vuitton trunk. It is hard to say whether there might have been more high-profile collaborations had the Qatar competition not been marred by controversy relating to workers and LGBTQ+ rights, among other issues, given luxury’s increasingly close links with football in recent years. In any case, luxury brands needed few additional reasons to pay attention to Qatar and neighbouring countries that are now such an important part of the revenue mix for most global players. Nearly as many brands (85 per cent) have a store in Dubai as do in the Italian fashion capital Milan (86 per cent), while the majority (57 per cent) now have an outlet in Abu Dhabi (up from 48 per cent in spring). Analyst forecasts suggest the region will be the fastest-growing luxury market this year. The rise in stores in Abu Dhabi is largely down to new openings at the high-end Galleria Mall in the centre of the city. Stores were also likely kept busy as a knock-on effect of the large number of visitors to Qatar, meaning that the Emirates and other neighbouring states, Bahrain and Oman, were expecting a spike in tourism during November and December, too. With physical retail well established, brands are now rapidly expanding their digital footprints for the region to compete with native and global multi-brand retailers such as Ounass and Farfetch. A third of Index brands (32 per cent) have launched an online store in Qatar in time for the World Cup, up from 23 per cent in spring. And 56 per cent have a digital sales portal in the United Arab Emirates, while 35 per cent are active in Saudi Arabia (up from 50 per cent and 32 per cent in spring, respectively). In terms of omnichannel service, Middle Eastern shoppers differ only a little from the global luxury cohort. They demonstrate a slight preference for multi-brand retail and rate in-store appointments as slightly less important though these differences are marginal. What distinguishes them is a much higher enthusiasm for luxury brands overall, compared to the average luxury consumer. For instance, 61 per cent of Middle Eastern shoppers would endorse Louis Vuitton to friends and colleagues versus 43 per cent of luxury consumers globally. Brands entering the market would benefit from launching campaigns that show an understanding of and reflect the cultures of these countries and consumers and how the region is changing. Farfetch and its multi-brand boutique Browns responded to this demand with a capsule collection of modest fashion early last year. The rise of Dubai-based brand the Giving Movement, which integrates Arabic calligraphy into its streetwear designs and heavily emphasises its sustainability credentials, is another case that demonstrates how well shoppers in the region respond to nuanced local relevance. Case study: Saint Laurent supercharges omnichannel offering As Gucci’s growth levels stall due to the tricky situation in the Chinese market, Saint Laurent has emerged as a growth driver for parent company Kering. The French corporation’s aim is to double Saint Laurent’s sales in the medium term to €5 billion. Achieving this goal is likely to require the brand to enhance its omnichannel offering to a comparable standard with stablemate Gucci, which leads the omnichannel rankings this year. Saint Laurent has gained significantly in the past six months after bolstering its user account settings and newly offering the ability to book an in-store appointment. The brand has recently rolled out a new app, which offers consumers the ability to connect directly with a Saint Laurent brand advisor, something also now possible via its website. These service improvements have helped Saint Laurent climb the omnichannel rankings by 16 positions. Saint Laurent is already viewed as offering a digital experience more impressive than 83 per cent of Index brands, but its in-store experience is viewed even more positively. The brand beats 87 per cent of brands when customers are asked to rate its physical retail offering. Further investment should see Saint Laurent narrow the gap between its near-best-in-class stores and its above-average online portal. To receive the Vogue Business newsletter, sign up here. Comments, questions or feedback? Email us at feedback@voguebusiness.com. 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