How tech is changing the face of luxury retail

By Adriana Coppola, Digital Innovation Strategist at SapientNitro.

Technology innovation is poised to transform the marketing mix for luxury brands, many of whom once eschewed digital as a poor fit for their exclusivity-focused positioning.

Digital is becoming an increasingly important discovery channel for luxury consumers. In fact, recent projections suggest that by 2020, online sales are expected to drive 40% of luxury brands' revenue growth.1

To navigate a digital transformation effectively, luxury retailers can learn several key lessons from their peers in the beauty industry where real-time face-tracking, 3D projection mapping, and personalisation technologies have all become viable and effective marketing tools.

Break the Tangibility Barrier

In the coming years, breakthrough technologies will transform the way we shop online for beauty, fashion, and other categories where trial is key.

To begin with, we're seeing increasing sophistication in augmented reality (AR), where professional-grade, markerless facial tracking and mapping is beginning to reach the mass-market consumer. Suddenly, consumers are empowered to experiment with products and explore self-expression from the comfort of their own living rooms and in ways that still feel tangible enough to drive new purchases.

Online shoppers are currently offered little guidance or assistance when selecting what they need (think self-service shopping amidst pages and pages of products) or want (think customised consultation regarding high-end products). AR creates the possibility of a seamless and tailored omnichannel purchase journey, a fact that will have huge implications for the luxury sector and its rate of growth in the years to come.

Enable Smart Personalisation

Customised service will also help brands to connect with larger percentages of their target audiences and tap into those potential customers who aren't actively trying, buying, or using products (an area of significant growth for the beauty industry).

By applying artificial intelligence (AI) capabilities to consumer data, brands will be able to automate the kind of tailored experiences that consumers could previously only get from visiting a top make-up artist or stylist. This, coupled with technology such as 3D printing, could offer consumers the ultimate made-to-match beauty service – one that takes identified skin tones and prints exact pantones onto foundations, blushers, and lipsticks.

For luxury brands, increasing value will be placed on the interactive nature of branded products. Similar to the aforementioned made-to-match cosmetics example, luxury apparel products purchased online will be expected to fit seamlessly to body shapes, with real-time alterations becoming a viable service offering in the not-too-distant future.

Reimagine Self-Perception

In today's world, where consumers spend as much time curating their online presence and appearance as they do their physical selves, digital is forcing a new shaping of identity.

And since the psychology of beauty is rooted in our identities, brands will own an entirely new space by taking the concept of the "curated self" and enabling people to bring this new reality into the physical world.

For example, we could select new products based on what fits with our physiological DNA. It's a long way off, but through biohacking – the process of bringing together technology and biological processes to optimise how our bodies work – we could effectively enhance our physical selves.

While the ethics are still being debated, this is a ripe area for digital innovation. Teams of beauty and luxury brands alike are beginning to explore this area as they seek to create experiences that are truly unique and personal.

What Luxury Retailers Stand to Gain

Beauty brands have used technology effectively as a catalyst for transforming their industry's mindset and models. They have done this by shifting from "mass" to "individual." This is a particularly pertinent transformation for luxury brands struggling to maintain exclusivity within the context of a mass-market platform.

Just as beauty brands have begun to shift from product to service, luxury retailers should also plan to compete in this realm by providing curated services – enabled by technology – in addition to selling traditional consumer packaged goods.

By marrying tech innovations with human behaviour, luxury marketers will unravel massive new opportunities and inject life into stagnant categories.

About the author

Adriana is a Digital Innovation Strategist at SapientNitro and leads the UK's beauty strategy offering. Passionate about the impact of technology on beauty, Adriana is a widely published and popular speaker. She has written for publications such as Time and The Guardian, and was one of the few Brits to speak at SXSW Interactive 2016. As a dedicated supporter of the industry, she also sits on the advisory board of several beauty startups.

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