NEW YORK, United States — Now that most luxury brands have come to accept that the internet is a powerful tool for commerce and that social media provides an opportunity for a new kind of brand engagement, along comes another technological wave that will feed the ongoing digital revolution in fashion — and take it mobile.
Indeed, according to Internet analyst Mary Meeker of Morgan Stanley, “more users will likely connect to the Internet via mobile devices than desktop PCs within 5 years.” What does this mean for luxury and fashion brands? And, as consumers continue to migrate to smart mobile devices, how does this change the dynamics for operating fashion commerce and communication in the mobile space, and the wider social web?
To provide the answers, I turned to Dinesh Moorjani, Senior Vice President of Mobile at IAC — the company that owns The Daily Beast, Evite, Urbanspoon and more than 40 other internet properties — and a speaker at the upcoming Luxury Lab Mobile Clinic to be held on 23 June in New York City.
BoF: Today many luxury brands do more sales via their e-commerce sites than at their biggest single flagship bricks and mortar stores. Do you expect to see a similar boom in mobile commerce?
DM: I do expect sales via mobile commerce to grow rapidly, in comparison to bricks and mortar stores, largely due to enabling and consumption conditions being met, i.e. app user interfaces improve, mobile payments beyond micro-transactions become commonplace, and smartphone adoption eclipses feature phones installed base.
Mobile commerce unlocks impromptu purchase decision and even retail therapy. We cannot dismiss the behaviours accelerating this change. In the near term, I expect e-commerce sales to dwarf mobile sales, but that equilibrium will shift in the coming years as one-touch, frictionless payment becomes the norm.
Flagship stores are just as much a branding tool as they are a sales channel so they are certainly necessary even when digital sales eclipse brick & mortar stores. Mobile devices will serve as lead gen (generation) for brick & mortar store foot traffic through exclusive, time-sensitive, and geo-relevant offers. Growth in commerce over mobile devices unlocks discovery opportunity to these physical locations as much as they enable convenient engagement in the products and content associated with these brands.
BoF: Location-based services allow brands to deliver more relevant and intelligent information and experiences to mobile consumers. Are any luxury brands doing this well? If not, what can luxury brands learn from others?
DM: Many luxury brands have introduced mobile applications from Gucci and Ralph Lauren to Mercedes and premium watch companies. Most of the location-based services (LBS) features have been limited to store locaters and multimedia brochureware & product catalogues. Multi-brand retailers like Gilt Groupe seem to be providing a compelling m-commerce experience across device types by offering seamless, in-app purchases and simple, intuitive user interface. Brands have just begun to explore the concept of sending geo-cached offers to targeted consumers nearby based on opt-in preferences and notifications. This will certainly grow.
BoF: For now, “mobile” mostly means phones. But with products like Nike+, we’re seeing the integration of mobile digital technology into footwear and apparel. In the near future, do you think luxury goods like handbags will be connected to the network and behave like mobile devices?
DM: Yes, depending on the definition of “near future”. The time horizon is probably beyond three years for any mass affluent market adoption largely because the integration of fashion apparel and technology needs to overcome a stigma of being geeky/nerdy and requires seamless execution. Wearable computing is a growing area within the wireless space, although adoption will largely depend on the simplicity of the use case.
Nike+ is certainly one of the best examples, but solar tech to wireless handsfree incorporation into fabrics are considerations for known brands, most of whom focus on athletic apparel or their outdoors lines. Clothing, like a smartphone, remains with us and serves as an extension of our identity. This introduces the opportunity for clothes to embrace ‘computer vision’ – the idea that devices can interpret information – see, hear, communicate and replicate targeted senses to reduce the legwork or decisions that we have to take.
Think about a purse that has a RFID integration, so when a consumer walks into a shop, the retailer knows that the consumer is a potential buyer or has preferences that need to be addressed. Of course, there’s a robust layer of intelligence and web services that have to support wearable, mobile computing products, just like for intelligent apps on a smartphone or tablet device, but it’s not inconceivable that these services become more commonplace, once luxury early adopters are saturated.
BoF: Speaking of smartphones, what makes a good iPhone or mobile app? Should these be a priority for luxury brands?
DM: Good smartphone apps offer an intuitive User Interface (UI) where design is critical, useful features that address the mobile use cases and don’t simply replicate what a website might do in a stationary computing environment, and are fun to use, whether they’re a utility or a game.
Yes, they should be a priority for luxury brands. It’s a relatively low-cost user engagement channel for brands to communicate new offers, products & services, events and news, and most importantly, engage users with features that drive m-commerce and in-store foot traffic. Imagine, digital media consists of some material percentage of a very large marketing spend for luxury brands across ad vehicles. If a portion of that marketing spend, let’s say $200k, was dedicated to a compelling mobile app, maintenance, and new web services, the brand would maintain personal presence in the pocket of a loyal user with updates, notifications, and a 1:1 marketing channel to that consumer. If that user also shared a product or in-app content with other users via integrated social media tools in the app, this behavior alone results in a powerful segment expansion channel for the brand.
BoF. Finally, what are the three most important lessons luxury brands must keep in mind as they pursue their mobile commerce and communication strategies?
DM: First, embracing innovation and preserving a heritage brand are not mutually exclusive. Think about how to disrupt yourself before somebody else does. All mature businesses want to protect their cash cows, but the product roadmap of any organization needs to identify where it wants to take controlled risk. Determine what that risk appetite is and how you want to execute on it.
Second, determine the specific goals of your mobile strategy and lay out a set of digital services that the mobile apps will help deliver to achieve those goals. Incorporate mobile metrics and an analytics package into the app to make informed decisions around app improvements and future releases. Don’t run product management blind.
And third, apps can utilise device hardware components that enable a phone to do far more than just serve as mobile brochureware. This may include using the device’s camera/video capture, location-detection capabilities, accelerometer, or mobile screen itself. Use the app as an engagement channel with social media tools, location-based search, and commerce, if appropriate, to expand the market and build a digital dialogue with consumers.
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