Selling Luxury via Smartphone

Medium is the message, or not!

Akashdeep Singh Sachdev |Amlan Anurag| Maninder Singh Chhabra

The title promises an interesting read for the reader, albeit another perspective on the matter
may just dilute any conviction in the already formed opinion on the subject.

While trying to address this problem we really need to dissect the term Selling and hope
from the reader that the interpretation of the term selling is similar to that as ours to be
able to reach some consensus .

Lets digress into what constitutes Selling at least for the sake of this study. Selling is no
more a sales function, it is marketing, communication, positioning, customer service function
and more in some proportion. There is no single factor which can take the blame or credit for
making the customer loosen those purse strings, but rather every factor feeds into each other
and feeds off each other. This is especially true for luxury in this day and age of IMC and 360
degree campaign. Terms like brand reinforcement are not random jargon sprinkled in the
Marketing Literature , but the things that have been identified as necessary in any brands
survival toolkit. This is true across brands, product categories verticals and geographies. One
common underlying theme being these purchase decisions are not immediate need based in
which case availability and price takes precedence.

So if selling is not purely a sales function, then where does Mobile screen fit into the scheme
of things? It fits into a lot many places and what we discovered should compel the reader to
change the way in which mobile should be used as agent build brand stories.

This study will try to identify the gap that a Mobile devise can fill in the current luxury
landscape.

To reach a place of some perspective we tried to study the current Luxury Brands and their
approach while utilizing the mobile devise to drive the intended results . Brands used for this
purpose include BMW, CHRITIAN DIOR, CARTIER, FOUR SEASONS , VELTI , LAND
ROVER , HARRODS, GUCCI .
Consumer Experience of the Luxury Brands Indian Context.

The modus operandi would be to target the high end smart-phone users, which are priced INR
20,000/- and above. It is this way to keep the basic strategy of controlled distribution for
luxury goods intact. A per the research firm CMR, the high end smart-phone market is also
slated to grow by 19%. "Out of a total of 163 smart-phone brands, only 19 brands shipped
smartphones in the high-end price band in 2015, indicating high entry barriers and the brand
loyalty enjoyed by incumbent brands in the segment.

Indeed over the last five years, sales of luxury goods have grown faster in India than
anywhere else in the world, measured at fixed US dollar exchange rates. Its total luxury
goods market size hit INR164 billion (US$2.6 billion fixed exchange rates) in 2015, which is
bigger than in Turkey, Thailand and Argentina and is currently ranked 21st out of the 32
markets covered by Euromonitor International's luxury goods research.

Gucci has found that mobile and tablet now account for 58% of traffic online, with revenue
increasing at about two thirds the rate of traffic. In particular, consumers who are already
familiar with the brand are beginning to purchase high priced ticket items, most notably
handbags, through these channels. Consumers are now using smartphones like personal
assistants, helping them find stores and locate products. In response, Gucci launched an
omni-channel initiative in the US called Find in Store, enabling consumers to identify which
stores carry particular items.
Brands should not expect to attract new customers with a responsive website, nor should it
be expected that consumers will download an app simply because it is available - all
technology and platforms must have a purpose that provides value for the consumer. As
stores continue to account for 90% of the business, Harvey Nichols remains focused on the
customer experience in-store.
Looking beyond technological gimmicks, such as virtual dressing rooms and magic mirrors,
the retailer is focusing on the concept of a "connected store", where staff and technology
work together to engage the consumer. Matchesfashion.com: Removing the "e" from e-
commerce
For Matchesfashion.com, the challenge has not been the alignment of stores and digital but
rather of positioning in the market.
Transitioning from a bricks and mortar retailer, the smart-phone platform tripled the size of
the business, now accounting for 80% of revenue and extended the geographic reach.
In particular, US sales have grown by 87% in the last year, while Asia is up by 110%.
Growth has been driven by tailoring services to meet the needs of the luxury consumer, with
initiatives such as same day delivery in London, next day delivery in Europe and free
collection on all returns.
In what is becoming an increasingly crowded online marketplace, the company has worked
on appealing to the luxury consumer by emphasising a unique point of view, with a curated
product range for men and women. It has sought to select the right designers and create
editorial content that incorporates shop-able items, thereby providing value to the consumer
and keeping them engaged. By focusing on commerce as an integrated system of all channels
and platforms, the retailer aims to create a seamless experience for a consumer that is
grounded in digital.
Connecting the dots with apparel and footwear internet retailing forecast to reach US$295
billion at constant 2014 prices in retail value sales by 2019, this is a channel with myriad
opportunities. As highlighted by the strategies of Harvey Nichols, Gucci and
Matchesfashion.com, well established luxury players are now acknowledging the growth in
this area and demonstrating openness to innovation by using technology to "connect the dots"
- ensuring customers are no longer constrained by physical spaces and stock availability.
Creating the Store Experience on Smart phone
"Because the experience of luxury must be multi-sensory and experiential
(Kapferer/Bastien 2009; Atwal/Williams 2009), many luxury managers who have accepted
the necessity of being online as essential to their brand are faced with the question of how to
create a multi-sensory experience of luxury on the internet. In a physical store, the high
aesthetics of luxury products can be presented in an exclusive shopping atmosphere full of
multi-sensory experiences that appeal to peoples emotions.
The internet, however, as Karl Lagerfeld said, does not convey the unique feel and
sophistication of luxury materials, refined tailoring and extraordinary attention to detail found
in luxury fashion. Indeed, it is a key challenge to combine the traditional luxury brand image
with the usage of innovative technologies. Nevertheless, in contrast to traditional one-way
marketing communication, it is possible to create the magic and myth of a luxury brand
following an understanding of the internet as a 360-degree experience. In the digital age, the
heritage and key values of a luxury brand can be communicated by using visual tools like
pictures, videos or 3D product presentations, music that evokes certain emotions, and
interactive media that promote the dialogue with brand advocates and evangelists.
Given that luxury goods are primarily bought for what they symbolize, it is crucial for
luxury brand managers to know what kind of values their brand promotes in the eyes of
actual and potential customers. Referring to the predominant management orientation of
luxury brand research, the key values luxury brands address are dependent on the consumers
personal perceptions regarding financial, functional, individual, and social aspects. These key
dimensions of luxury value perception encompassing the financial, functional, individual, and
social aspects are strongly correlated but not identical with each other, as illustrated in below
figure.
These value dimensions form the basis of a framework of luxury brand management online
as described in the following paragraphs.
Financial value. Even if a high price is widely accepted as a necessary element of luxury
products (Fionda/Moore 2009), it is important to point out that luxury is qualitative not
quantitative (Kapferer/Bastien 2009). The consumption of luxury products needs to provide
social and psychological enhancements (Okonkwo 2009); thus, the pricevalue relationship is
crucial. As the internet is a public place of immediate buying and selling, and often related to
price discounts, the price premium associated with unique and exclusive products, superb
quality, handmade craftsmanship, and impeccable service needs to be ensured in the virtual
environment via limited distribution.
Functional value. Besides product-related functions, the functional value of luxury in an
online environment refers to the usability, quality and uniqueness of the online appearance
when using the website and further applications. Even though the senses of touch and smell
are lacking, the internet can leverage movement, music, texture, space and community to
successfully recreate a brands character online.
Individual value. As the use of luxuries can ultimately support individuals in their individual
identity projects, consumers emotional needs are the key elements in defining the concept of
luxury. Consumers experience luxuries as symbolic resources constituting important tangible
cues that allow them to define themselves and to transfer the brands social symbolism,
such as exclusivity, authenticity, quality, uniqueness and culture, into their own aspired
identities. Therefore, with regard to the individual value of luxury, brand managers should
transfer the offline appearance into the online environment and, in order to get the consumers
involved with the brand at a deeper level, the opportunity should be taken to ask them for
their opinion and make adjustments accordingly.
Social value. The social dimension of luxury addresses the cognition of the individuals
social group(s) and focuses on online social networks. A high amount of wealthy internet
users regularly utilizes social media applications and even though not all digital natives are
potential customers of luxury brands, they may be potential brand advocates.
Best Practice
Burberry
The innovative platform, The Art of Trench made Burberry one of the most successful
luxury brands regarding user-generated content. It addresses individual value through direct
connection to the brand as well as social value needs as users can interact with others.
Regarding functionality, the atmosphere and usability of the webpage mirror the offline brand
presence. Product information as well as prices can be found easily, while the focus is on
non-monetary
values.

THE MOBILE MASS

Luxury automakers, hoteliers and designers have forayed the mobile sector through apps that
keep the bevy of deep pocketed customers, entertained and engaged.In the mobile sector,
brands are constantly innovating newer ways to connect with consumers.Upscale brands have
made opportunities for themselves to drive foot traffic to bricks-and-mortar locations, increase
multichannel transactions and generally increase awareness using apps.
\
Innovative methods to connect with customers like virtual stores, hangouts and live streaming
of major events are being used by the brands. The latest trend being integrations of buy now
buttons in sites like facebook and twitter. This was used by major brands like Burberry during
the London fashion event last year.

One of the challenges that brands are facing is converting followers into spenders. Innovating
ways to turn followers into long term conversion needs to be employed as luxury brands on an
average have more than a million followers. On the other hand a conundrum exists as there is
possibility for dilution of brand exclusivity which can be a let down for existing loyalists.

So how the apps and mobile platforms are leveraged by the brands? Brands probe customers
to store payment details and when posts about some product like a designer sun glass worn by
the model in some fashion show is published then customers can press the buy now button
directly and the product will reach their billing address . Although this can be classified as
impulse buying but the level of immediacy is on a whole new level.
Potentially, there is something audaciously cachet about buying a luxury product that has only
been on the market for a matter of seconds.Logically, the big opportunity is in affordable luxury
goods particularly the pricier end of beauty care. For example, a social media feature that
allows consumers to click and buy a line of make-up at the same time it is being seen for the
first time at a fashion show or perhaps even before the fashion show has taken place, is an
irresistible opportunity.

Providing social media a lions share of the marketing budget is a risky affair but the latest
innovations and dynamics of target audience have made it an irreplaceable part of marketing
strategy. Social media and its new offshoot social commerce is more about seizing the
moment.

SOCIAL SELLING THROUGH DIRECT TO CONSUMER

Social selling allows seamless purchase of luxury products through communication branding.
Last month in China, Christian Dior launched social selling directly through WeChat. Here the
followers were sent message (through WeChant moment feature) stating to buy a limited
edition handbag directly by clicking the post. This was the first of its kind in the luxury segment
and this showed the potential of direct to consumer segment. This become a phenomenal
success in China.

Experiments with different

channels including social media
platforms is increasingly being
done by the industry players.
Brands are targeting micro-sites
and networking platform where
the target audience is both active
and concentrated.

To keep alive the exclusivity

and penchant for the brand, sales are made in limited editions and marketing done as flash
sales.
POTENTIAL
Dior is not the first in its efforts, brands like Micheal Kors and Mont-blancare using apps to
send offers and promotions and also exploring others possibilities of marketing and selling.

Till date, luxury brands have used the online platform for promotional purposes and limited
sales with the central idea of directing traffic to the offline outlet. The micro-sites and apps
provide the largest opportunityyforrengagement.

Location-based apps are an effective way to drive discovery and conversions in-store, Ms.
Balagopal said. However, delighting the customer upon activation will be critical for retaining
and converting the customer, she said.

FEW MORE MOBILE STRATEGIES USED BY LUXURY BRANDS

1. In the last quarter German automobile maker BMW made an app allowing enthusiasts to
share tips and experience etc . Additionally the app allows easy payment through mobile
platform. Users can customise their vehicle as per the multitude of exterior and interior
choices. Focus on UI is utmost and app is made in an intuitive way to fascinate the user.

2. Cartiers targeted to-be brides through its app which allowed them to the view jewellery
collections and search for nearest boutiques where they can custom make it. The app
comprises Cartiers collection of both wedding bands and engagement rings. Real or
aspirational brides-to-be can measure their ring finger size, save a desired ring to their wish
lists and browse through the products ranging $4,025 to $75,275 depending on color, cut,
clarity and carat.

3. Hotels are using apps for curation. For example, Four season made a local app for Beverly
Hills using which people can curate their entire staying experiences around the hotel.

4. Few brands are using location based GPS services to offer real time information and offers.
As per marketing manager of Velti, Providing consumers with real-time offers that can be
redeemed [in-store] immediately helps drive sales and increase loyalty, Consumer
relationships is strengthened through curating experience by using apps like Foursquare.
5. Use of interactive apps to direct sales especially in the automobile and makeup segment.
For example, Land rover marketed its new rang rover model by creating an interactive app
where user can virtually experience the rough terrain and off roads. The app facilitates gives
user to explore the interior and exterior of the vehicle also. Harrods used app to mimic an in-
store make up trial. User can choose any design element and its variations and apply it on the

specified skin tone.

Saks Fifth Avenue is empowering consumers with the ability to digitally put together outfits
on specific body types by joining up with a fashion-centric application.

6. Gamification of apps to create immersive content where users can explore the collection in
the process. "Introducing an addicting or sharable game as part of the app, even as a secondary
feature, you are giving the user a reason to keep the app in their phone and more chances to
explore the apps other features," However, there is no evident correlation with purchase, thus
capitalising on curiosity is something which is still untapped.

MOBILE IS MORE THAN APPS

Luxury brands are considering apps to be the major mobile strategy while there is much more
to it.Mobile platforms have skyrocketed in the past year and will continue to do so, but most
luxury brands are not taking full advantage of the opportunity. Because affluent consumers are
typically the demographic that have smartphones, luxury brands should think about catering
mobile strategies to fit them.

As per ABI research, Its not enough to just have mobile strategy, listening to consumers is
what is going to make luxury brands have a greater impact via mobile.

Establishing a robust mobile strategy

Too many luxury brands are relying only on a smartphone application for their mobile
marketing strategy, too few luxury brands and retailers are selling via the mobile Web. said
Lindsay Woodworth, director of marketing at 2ergo.

Robust marketing strategies focus on building mobile assets, such as mobile Web sites with
commerce solutions, and then using messaging to drive traffic to this asset or directly into the
physical store.Most importantly, mcommerce is easy to navigate and convenient for
consumers, more notably affluent ones who may not have a lot of time to shop and find it
simple to do so from their mobile devices.

"Customers are using the mobile Web for coupons and to compare prices, so luxury brands
need to decide how they are going to compete in this area," she said. "Luxury retailers can use
the mobile channel to offer access to product reviews, exclusive content, personalized
recommendations, and other services beyond coupons."

Primary Research and Concluding Thoughts

Thereafter we used primary data collected on a Luxury Bike Rental portal Rebelrides.in to
substantiate or negate our findings and to help us move to a place of further action. The data
was collected over a period of two weeks.

Although the primary data is less in number, but the companys offering being in the luxury
space and also less ambiguity helps to draw certain inferences.

The charts below consists of Enquiries made on the website of the company, Pre-bookings of
the bike renting services and Pre-booking which involved transactions of Payments of
amounts in upwards of Rs.2000.

Interpretation of Exhibit A: The total enquiries consist of all enquiries made and does not
apply any filter. If a visitor on the website clicks on make enquiry button, it would be
counted as data point.

Here as you can see enquiries made through mobile platform are maximum which resonates
with our initial notions that Mobile platform does help in the Awareness, Interest and can
subsequently affect the Desire and Action.

Total Enquiries Of Luxury Bike Rental Service in the

city of Mumbai
Total Respondents: 213

48, 23%

11, 5%

154, 72%

Enquiries through Mobile Platform Enquiries through Tablets

Enquries through Laptop /Desktop

Exhibit A
Interpretation of Exhibit B:

Here is where some understanding and psychographic understandings of the clients comes to
the surface and are presumptions start to have some backing of the data.

When it comes to actual transactions being made using Mobile phones the conversions on the
mobile takes a nose dive and out of 132 Pre-bookings made through web platform only 24%
are made through mobile platform.

These transactions are in the range of Rs.1200 for a mid-level luxury bike i.e. Royal Enfield
Bullet 500 and goes up to Rs5350 which is charged for a Harley Davidson Sportster 883.

The next exhibit further solidifies our premise.

Total Bookings Made which involved actual

commercial Transactions

Total Booking Made: 132

24%

2%
97, 74%

Booking through Mobile Booking made through Tablets

Booking made through Laptop /Desktop

Exhibit B

Interpretation of Exhibit C: This Pie Chart is the snapshot of the reservations made which
involved transactions in upwards of Rs.2000. The purpose was test the hypothesis that the
Indian customer, even the one who aspires for luxury and makes the decision is more
confident on the desktop or laptop platform than mobile or a tablet.
In the snapshot of the transaction we can see mobile only transaction form just 14% of the
transactions. While no transactions happened on tablets.

Prebookings Made which involved payment of

>Rs.2000

11, 0, 0%
14%

65, 86%

Booking through Mobile Booking made through Tablets

Booking made through Laptop /Desktop

Exhibit: C

Overall Interpretation of the results and larger picture with regards to Luxury on Small
Screen.

With this data we could safely infer that Story Telling is a big part of any purchase decision
and definitely so a Luxury Segment. Mobile Screen by the virtue of being small screen can
hamper the experience or can leave the customer wanting for more before making the big
spend, this makes Mobile screen a very important agent for narrative building process, the
one that cannot be ignored as in the Awareness, Interest, Desire and Action (AIDA) mobile
will continue to play an important role in driving A-I-D and influencing the last A

Tweaking and tuning of the ways in which power of the mobile screen can be harnessed into
making the customer make the buying decisions.

Conclusion
The decision to participate in the digital environment is crucial for luxury brands as online
strategies are not weakening, but strengthening the brand. The refusal to accept the internet as
a complement to offline retailing and the inability to innovate may become the biggest threats
for luxury brands in todays business world. The digital environment offers the opportunity to
reach billions of people internationally brands that want to be relevant and desirable for
current and future customers have to build their image and mythology online. Especially in
the context of luxury brands, numerous third party information sources are to be found
online, from customer reviews and blogs to auction sites and counterfeit online stores. In light
of all the messages circulating around luxury brands, it is necessary for them to be an official
part of the online landscape and to allow the interested community to become a part of the
dream. Therefore, it is necessary to acknowledge the fact that a well-managed internet
presence is the only way to guarantee that a brand has an adequate representation on the web
and to ensure a well-orchestrated effort of different channels of digital communication.

Best practices give evidence that the key value dimensions of a luxury brand are a useful
basis for the development of complementary offline and online strategies that create a true
luxury experience.

REFERENCES:

1. https://www.luxurydaily.com/top-10-luxury-brand-mobile-apps-of-the-year/
2. https://www.luxurydaily.com/gucci-ingrains-brand-symbols-into-consumer-lexicon-via-
in-app-game/