Image: Design for Farfetch's Store of the Future (Source: Forbes
Earlier this year, multi-brand retailer Farfetch (valued at $1.5 billion this year and reportedly expected to IPO very soon) announced their potentially ground-breaking launch of a tech-powered retail experience that merges on- and off-line experiences. A company founded with a strong omnichannel positioning, they started by connecting physical inventory to a digital database. So-called the ‘Store of the Future’, the software is designed to improve retail productivity by enhancing interaction between shoppers and sales associates.
Among its features, the software instantly recognizes when a client enters the store, tracks their browsing habits through RFID-enabled (Radio-frequency identification) clothing racks, creates product wish-lists accessed through a ‘digital mirror’, and facilitates check out through a mobile payment system. Its modular service can be tailored to suit the boutique/brand’s needs and the open-architecture of the platform means third-parties will be able to build applications and add-ons. More importantly, it allows brands to access essential client data: the potential is endless.
Image: A virtual shopping rack recognizes the customer's preferences Farfetch's Store of the Future (Source: Getty Images)
It is reported that only 7% of luxury sales occur online, however, this figure is due to reach around 20% by 2025. This means that over the next decade, the majority of sales will occur in-store, an area largely left in the dust by digital technology over the past few years where data collection has been non-existent. Brands must redefine this space for the new multi-channel shopper.
Farfetch is not the only company looking to technology to solve the problems of the physical retail store. Luxury brands understand that they must have a fluid omnichannel experience that encourages interaction between client, product, and brand. In 2012, Burberry took the lead in retail innovation with the opening of their Regent Street flagship in London, which featured RFID-enabled clothing that triggers educational content in fitting rooms and certain mirrors, screens to display runway shows and other brand content, as well as employee-focused tech such as iPads connecting to CRM (customer relationship management) data that also act as a point-of-sale (POS) destination.
Image: Burberry uses RFID-chips in clothing that turns mirrors into interactive content, such as runway styling and education (Source: Tone.com)
As Ana Andjelic of Havas Lux Hub reported on Burberry’s innovation: “Modern luxury is about conveying a lifestyle; it is about creating an overall experience that products are a part of. A strong brand narrative combined with technology, which has become a signature of the Burberry brand, gives consumers attainable, ‘no purchase necessary’ entry points into the brand experience at every point and price point”.
So, is this new digital retail innovation right for luxury brands?
In-store technology, such as the virtual reality mirrors, can be seen as ‘gimmicky’, so it would really have to be useful (a win-win for both brand and consumer) and convenient, while maintaining a high level of personalization. Mintel reports that retail technology (i.e. interactive mirrors, RFID enabled clothing, and tablet use in-store) positively affects customer experience to people of all ages, not just younger millennials. But will this hold true for luxury retail? What sets luxury brands apart is the level of personalization… can technology recreate that personal touch needed to sell the lifestyle of the brand?
See more:
http://www.brandchannel.com/2017/04/13/farfetch-071417/
https://www.businessoffashion.com/articles/bof-exclusive/inside-farfetchs-store-of-the-future
http://mashable.com/2012/09/24/burberry-regent-street-christopher-bailey/#j2G5T5DW8kqA
http://mashable.com/2012/09/13/burberry-regent-street-store/#j2G5T5DW8kqA
http://adage.com/article/digitalnext/luxury-brands-innovate-die-digital-age/298149/
https://www.tone.co.uk/rebranding-the-good-the-bad-the-ugly/
Tamara Sender, ‘Fashion: Technology and Innovation - UK - September 2016’, Mintel.