A report published Thursday by the Boston Consulting Group (BCG), titled “Digital or Die: The Choice for Luxury Brands,” found that more than 85 percent of millennials as well as 75 percent of Baby Boomers and older people who buy luxury brands want omnichannel options, including e-commerce, social sharing and digital in-store experiences.
Furthermore, 60 percent of all luxury sales are influenced by digital experiences, like researching online before buying offline.
Indeed, after surveying about 10,000 people in 10 countries and talking to industry leaders, BCG concluded that luxury brands have a lot more to do to catch up with fast-changing consumer expectations.
“Digital is the new consumer reality. Digital tools, digital skills and consumers’ rising comfort level with digital are forcing brands to be far more customer-centered in everything they do,” said Olivier Abtan, co-author of the report and a partner and managing director in BCG’s Parisian office. “But digital also opens up opportunities to create personalized offers and provide bespoke service to many more customers. Brands can reach consumers not reached before and engage online in markets where a brand has no physical stores. However, not all brands are there yet.”
And there’s more to omnichannel than shopping online. BCG discovered that shoppers want integrated delivery service (31 percent), the same promotions and rewards regardless of channel (24 percent), and a consistent brand image (22 percent), to name just three.
Diving deeper, the study found that while the Internet plays a big part in millennials’ shopping behavior, they don’t have a monopoly on all things digital. In some markets—notably, Japan and Russia—older people are the most active online shoppers for luxury goods and services.
Interestingly, countries most closely associated with luxury fashion, such as Italy and France, are also the most digitally backward. For instance, only 31 percent of the French luxury shoppers surveyed said they had researched their last product online and bought it in a store, compared with 47 percent who had done so in the U.S. and Brazil and 46 percent in Japan.
“Luxury consumers expect brands to be digital and act digitally,” said co-author Christine Barton, a senior partner and managing director in BCG’s Dallas office. “They see all kinds of innovative digital initiatives in the wider world of consumer goods and retail. Now luxury brands have to meet those expectations. Digital approaches can help them foster valuable interdependencies with their customers in order to shape and co-create the brand experience.”