At Luxury Daily’s inaugural Women in Luxury conference last month the discussion centered on women as the linchpin to the luxury industry—as the consumer, the foundation and the future.
Luxury, along with many sectors of the economy, from autos to media, CPG to retail, is evolving, prompted by the disruptive force of digital, and women are playing a more active role in all aspects: creative and artisan, operations and supply chain, retail and strategy, marketing and sales.
This shift is bringing about a change that will allow luxury to find a home on the web, the one place it had long feared treading.
Raul Rios, senior director of strategy at advertising agency Walton Isaacson, pointed out that marketing’s Four Ps (price, product, positioning and promotion) have driven campaigns since the Mad Men era, and are foundational to online search, e-commerce and Amazon. But, he said, reaching women requires a more nuanced approach called the Four Cs: centralize with women’s stories, contextualize with women’s experiences, characterize women’s challenges, and connect women together. Storytelling is fundamental and it’s the connective tissue underpinning the Four Cs, as a way to capture attention, communicate and convert.
That’s a very different approach from most online sites—including Jeff Bezos’ growing behemoth that is Amazon—which are two-dimensional at best, chockfull of information, product attributes and price in an efficient and convenient format. What they lack are emotion, a soul and stories, which are the very building blocks of desire.
Depending on how it’s presented, a product can be a commodity or a treasure, or somewhere in the middle. Digital commerce has focused on the former and women will save retail by focusing on the latter.
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By breathing life into the products, executives at the Swoonery fine jewelry site, The RealReal resale destination and Orchard Mile’s upscale online marketplace, are creating un-Amazonable concepts.
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Simply put, women will save retail because women understand women. They are your co-workers, your friends, your sisters. Their anecdotal experiences and commentary inform women leaders in retail and luxury.
“Our advantage at TheRealReal is we are the customer. Disruption is the equalizer. Our customer is changing, with new wants daily. We can move faster because we are digital,” said chief merchant Rati Levesque.
The moat between The RealReal’s concept and Amazon? Authentication.
Customers feel confident purchasing pricey pieces from consigners on the site because everything is authenticated by The RealReal team. Like many digitally native companies, the consignment business is putting down roots, starting with a shop in New York’s SoHo district following a successful popup there last winter. “Fifty percent of store traffic was new to the brand, consigners and customers alike,” Levesque said, adding that authenticators, not just sales people will be available in person, just as they have been online. “The average selling price was 4Xs higher than digital. We sold lots of Birkins. You can’t just go anywhere a buy a Birkin!”
With Orchard Mile, an online marketplace that doesn’t carry inventory, clones about 130 brand sites and offers consumers the ability to create their own virtual shopping destination, CEO Jennie Baik is providing a new marketing solution for designers who have found the old way of reaching the consumer isn’t working.
“We bring all digital assets to one multi-brand environment, with multi-brand traffic and monobrand economics. Shoppers create their own digital Rodeo Drive with My Mile,” Baik said. “We think about what is innovative and serves the brand purpose and IS NOT going to kill the consumers’ surprise and delight.”
Baik sees Amazon as offering only one part of the puzzle.
“When people think about Amazon they think about left-brain. Execution of left brain doesn’t have to feel left-brain. We use data driven analysis in a brand appropriate, luxury appropriate way.” For example, Baik said, for shoppers who added the Roland Mouret brand to their personalized My Mile shopping portal, the company gifted them with a candle from the designer’s collection—a nice way to begin building an emotional connection, powered by technology. “It is so 1.0 simple in terms of application of data, executed in a luxury way.”
Diving deeper
Similarly Jean Poh, co-founder and CEO of The Swoonery, said technology underpins her company’s ability to create a buying journey that’s unique to each customer and her aesthetic, but what sets her site apart from Amazon—and the reason why jewelry hasn’t been a success for the online behemoth—is that the category is about authenticity and storytelling.
“Take the diamond industry, populated by value-driven companies started by men, using marketing to put emotion into the diamond. But it’s not the raw materials, it’s not the diamond, the commodity. It’s the design, the vision, the brand, the designer. That’s what can’t be replicated and that’s what people connect with,” Poh said.
The RealReal is also recognizing the value of storytelling, especially for higher end, more personal purchases.
“We are talking about putting creative and editorial around what’s trending up and what’s trending down in jewelry and watches. It goes back to the experience, breaking down the customer consignment journey and making sure that we are touching them at the right moments,” Levesque said.
Poh said retailers that try to dictate to the consumer don’t get that shoppers are in control now—and that their values have changed.
“The brands we purchase that align with our values, the companies that we support and invest in, this is how we create the future. Each individual can say, ‘This is what I want. Be conscious about your choices, where you spend your money, where you invest and what you buy. Buy things that you want to be part of your future. Retail doesn’t think like that anymore. Did it ever?”
Karen Giberson, president of The Accessories Council, who also participated on the panel, is excited that companies like these are bringing a spark back to retail. With consolidation and a focus on matrices and spreadsheets, she spoke for a lot of women when she said, “shopping became boring and frankly just wasn’t fun anymore. I want to hunt and discover.”
The Accessories Council works with more than 200 brands, helping them bring their unique points of view to market—and the timing couldn’t be better, Giberson said.
“While many of the mature brands may be struggling, at the same time there is groundswell of excitement with young entrepreneurial companies with new and fresh approaches to retail and product innovation,” she said. “That’s where the opportunities are.”
Even in the Amazon era, there’s still a white space for brands and retailers that have authenticity, a great story to tell and the ability to build relationships with consumers. That coupled with the left brain tech approach that has built the online retail giant, gives these companies a competitive advantage.