NEW YORK, United States — With global online retail sales poised to reach $1.5 trillion this year — a 20 percent increase over last year, according to eMarketer — there’s no disputing that we’re in the midst of a significant paradigm shift that's impacting every sector of the fashion industry. Retailers and brands of all sizes, from high street to luxury, are confronted with a growing set of challenges owing to the rapid growth of e-commerce.
And, often, a commitment to customer service is the missing piece in the puzzle for retailers who are hoping to carry the premium in-store experience to digital channels and convert browsers into loyal, repeat customers. Time and again, an emphasis on improving the customer experience has proven to be a key differentiator for e-tailers in today’s competitive environment, where a quick Google search returns many online stores offering the same product at the same price.
In today's digital environment, the consumer appetite for a high-quality customer experience is a given and, as a result, e-commerce is ripe for disruption through innovative customer service. Even more so, retailers with established reputations of providing a stellar customer experience prove that an emphasis on service is paramount to establishing a loyal brand following. Already, mass market retailers and a handful of luxury brands have paved the way for burnishing their own reputations through enhanced service.
ASOS, the UK-based global online fashion and beauty retailer, has been consistently quick to innovate its customer service practices in an effort to stay up-to-date with its millennial audience’s fast-evolving expectations. But the launch of ASOS Premier, a VIP program for frequent shoppers, reveals that the retailer has possibly unlocked a key insight: online shoppers are willing to pay for better service.
Currently, ASOS Premier costs UK shoppers £9.95 a month and US shoppers $19 a month. Through this program, Premier shoppers receive unlimited 2-day shipping (unusual for an international retailer), as well as exclusive sales, early access to site-wide sales, and a free copy of ASOS' monthly print magazine. A simple VIP program like ASOS Premier, coupled with the free return system granted to all shoppers, speaks volumes for the retailer’s customer-centric strategy and their dedication to ensuring customer loyalty. As of August 2013, ASOS.com reported an active customer base of more than 8.2 million and 71 million global site visits — pretty impressive for a millennial-focused, online-only retailer.
Net-a-Porter, another successful online-only retailer, and one of the first luxury e-commerce sites of its kind, has similarly set a high bar for brands entering the digital market and the retailer’s successful business model reflects the value of prioritising customer service. For New Yorkers, Net-a-Porter’s branded same-day delivery vans act almost as sirens for fantastic service. One of their vans parked outside a Manhattan building has become a sign that someone inside is receiving a product and experience akin to receiving an unexpected gift in the mail.
Though Net-a-Porter’s operations have grown exponentially since launching in 2000, its commitment to consistent, luxury service has not waned. Despite the fact that the majority of products Net-a-Porter sells can be found on other sites around the web, the retailer’s emphasis on ensuring orders arrive fast, in beautiful packing, with an easy return policy, may explain how the site has grown into an e-commerce success which may be worth as much as $3.4 billion, and now features more than 350 designers and clocks over 2 million site visits each week from customers who spend on average about £500 ($840).
Lessons For Luxury
Luxury retailing to date has been a winning formula of beautiful stores staffed with attendants that are perfectly polished extensions of a brand, ready to describe every stitch of the product in the most pleasing way. Customers love it. They feel special. They're proud to own the brand.
But, today, luxury has struggled to match that offline experience with a website, an email and a cardboard box delivered to the customer's door. Bringing a traditionally offline luxury brand online is a big challenge. If you're aspiring to luxury, you have to understand that your customers are paying for a luxurious experience. Look to Ralph Lauren, known for the beautiful and precise packaging of their e-commerce orders. The customer experience of unwrapping one of these packages at home mirrors the feeling of walking out of a Ralph Lauren boutique with a shopping bag loaded with new clothes neatly folded in the label’s signature packaging.
Tom Ford’s new e-commerce site with its prominent call-outs to customer service is a perfect example of how a luxury brand can begin driving sales online by treating the online store as an extension of its brick-and-mortar locations, rather than an afterthought. A recent McKinsey & Company study on the digital luxury experience underscores luxury retailers’ concerns that “substandard online experiences may tarnish their brands and destroy value.” Like Net-a-Porter, by offering same-day delivery within Manhattan, free standard shipping and returns as well as prominently featuring the customer service section on the website’s homepage, Tom Ford is underscoring that fact that a customer-first mentality is essential in building a valued and trusted e-commerce experience.
Ultimately, there’s no stopping the growth of e-commerce, even in luxury where online transactions amount to 8 percent of the sector’s sales. And while there’s no question that building the e-commerce arm of a luxury brand presents a unique set of obstacles, the same guiding principles that hold true across every industry also apply here: quality service resonates with customers and can become a major draw for all shoppers. It’s an exciting opportunity for luxury to set the bar.
Jordy Leiser is CEO of StellaService, a customer service analytics company
The views expressed in Op-Ed pieces are those of the author and do not necessarily reflect the views of The Business of Fashion.
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