Luxury brands still need to work on digital implementation: Gartner L2
today Oct 3, 2018
Gartner has released its annual ranking of 77 luxury fashion brands and has emphasised the need for brands to improve their digital practices in order to reach the global consumer.
The latest Gartner L2 report lists the 77 top luxury brands operating in the US and Western Europe (including the UK, France, and Germany) and evaluates their digital performance across the board. The report has identified three key areas in which many of these brands need to improve upon their digital strategy in order to cater to the needs of the modern consumer. These are the need to emphasise an omni-channel approach, improving European online customer service, and fully embracing social media commerce.
"Fashion brands are accelerating their digital investments to keep up with a globalizing commerce landscape and shifts in consumer expectations," said Gartner L2’s Associate Director, Brian Lee. "However, this rush to catch up has led to uneven implementation, and some brands fail to thoughtfully consider digital features before integrating them, resulting in a lack of sophisticated nuance, especially as brands expand distribution into new markets in search of consumers."
The report highlighted the need for fashion brands in the US to fully embrace an omni-channel approach. According to the report, only 29 percent of the Index brands have click-and-collect capability where customers can order products online and pick them up in store. However, 71 percent of US department stores do have click-and-collect services showing that the Index brands are lagging behind. This gives customers less incentive to buy directly from a brand online as they could order the same product to a department store and save on shipping.
European customer service was also highlighted by the report which stated that, although the listed brands have made significant improvements to their US customer services capabilities, the same has not been done for the European market, disadvantaging a large demographic of consumers.
According to the report, less than 50 percent of brands in Europe offer customer service according to the time zone of the country they are present in. In Germany, the figure was only 36 percent. Implementing time-zone sensitive online customer service should therefore be a priority for luxury brands.
The importance of social media, especially Instagram, for brands is continuing to increase. Brands are taking not of this as, according to the report, year-on-year adoption of Instagram shopping has jumped from 12 to 42 percent. However, brands still need to improve in this area as the report found that, although 21 percent of the brands listed do have an integrated Facebook shop tab on their Facebook pages, many do not list a wide range of products there limiting the real meaning and functionality of such a service.
The report emphasised that, although millennials have less purchasing power than some other demographics, they are more likely to spend on luxury items and should therefore be more present in brands’ marketing strategies.
"Despite lower spending power, millennials are more likely to purchase luxury goods than any other age cohort," said Gartner L2’s Research Associate, Christina Yang.
"They have significantly different ideas about luxury than prior generations, and brands must be increasingly reliant on values-based marketing both in the U.S. and abroad, in order to target and reach these consumers."
This in turn links back to the need to increase social media shopping capabilities, used mostly by millennials.
The report includes case studies on a number of luxury brands including Gucci, Fendi, Coach, Burberry, Louis Vuitton, and Kate Spade among others. Brands were ranked in the report as ranging from Genius, Gifted, Average, Challenged, to Feeble.
Gartner L2 measures the digital performance of over 2,200 brands across 12 sectors globally. The firm analyses 1,250 data points across web- and e-commerce sites, digital marketing, social media sites, and mobile applications in order to provide brands with data driven insights and suggestions on their digital performance.
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