Progress made by luxury brands within digital technology in 2020

Dec 25, 2020

by Alex Levin

This has been a brutal year for luxury retail. As the COVID-19 pandemic forced lockdowns and retail closures across the globe, the market for high-end personal goods contracted by 23 percent.

Yet, amid the chaos the coronavirus caused, we saw some luxury brands leverage digital technology and adapt in innovative ways.

With the new year and an end to the pandemic mercifully within sight, we consider the ways in which luxury brands can carry these trends into a post-pandemic future.

Redesigning for the Digital Age
Luxury brands excel at crafting physical shopping experiences — stunning products showcased in equally stunning spaces staffed by skilled salespeople.

But the luxury experience is often inherently tactile, which even the most storied luxury brands struggle to replicate online.

Rolls-Royce has been handcrafting luxury automobiles for more than 100 years. This year the brand unveiled a new visual identity designed with a digital-first mindset.

The redesign included an updated interpretation of its Spirit of Ecstacy icon, as well as a computer-generated pattern based on the iconic hood ornament that Rolls-Royce uses to create visual continuity across its digital properties.

Embracing digital to stretch creative boundaries
The coronavirus crisis has offered luxury brands opportunities to stretch the creative boundaries of what they produce and how they present those products to consumers.

The fashion industry, for instance, has long talked about shaking up its traditional runway format. When the pandemic forced fashion week events online, some houses used the opportunity to present their collections in innovative ways, leveraging personalized high-end print packages or producing incredible works of film.

Gucci launched its latest collection via GucciFest, an online film festival featuring a seven-part series co-directed by creative director Alessandro Michele and director Gus Van Sant. Gucci billed the festival as “a feast of fireflies in this time of tears, when the order of things wavers and the night seems to enshroud everything.”

Burberry partnered with Twitch to steam its Spring/Summer 2021 show from London Fashion Week. The hour-long show had more than 42,000 concurrent views, a far greater reach than it would have otherwise.

Helsinki Fashion Week took things a step further, pairing fashion designers with digital creators to build incredible digital-only collections, many leveraging VR technologies, viewed from its Digital Village. Viewers could pre-order physical garments or claim limited-edition digital garments for their avatars.

In the coming years, we will be interested to see how luxury brands use the creative possibilities technology offers to be innovative in their presentation.

Building the Website as a digital temple

While social media and partnerships with streaming platforms are important places to engage with audiences, standout brands have invested in building Web sites that are digital temples to their craftsmanship, their artistry, their histories and their mythologies.

Hermés has mastered the art of using immersive, interactive physical and digital experiences to convey the history of craftsmanship behind their leather goods or the stunning artistry of their silk scarves.

Chanel built a massive digital experience centered around founder Coco Chanel, the stories behind its products and the influence that the Chanel brand has exerted throughout history.

Using tech to build emotional connections
As the pandemic forced yoga studios and fitness centers to close, it made sense that the market for at-home fitness equipment would grow. But the extent to which luxury fitness brands such as Peloton saw its sales triple and Mirror, which Lululemon purchased for $500 million in June, speaks to the power of brands that understand the value of creating not only a phenomenal product but also using technology to create a strong emotional connection with their customers.

During the pandemic, connected at-home fitness devices offered the same high-quality experience and the sense of connectedness and community, of belonging, that luxury fitness centers did before the world shut down. As we move into an increasingly digital future, consumers will increasingly look to brands to fill this need.

Blending the digital and physical

Burberry recently announced it would open its first social retail store in Shenzen, China.

Designed in partnership with Tencent, merchandise will be labeled with QR codes that shoppers can use to unlock exclusive content and share their experiences with their social networks as they shop.

As they reconsider the future of their physical experiences, luxury brands have the opportunity to use technology to personalize consumers’ experiences – from using QR codes and augmented reality to leveraging Big Data to build complex customer profiles that empower salespeople to offer consumers a completely bespoke shopping experience.

Industry primed for innovation

As I have previously written, although many have been slow to change, luxury brands are ideally positioned to innovate in the digital space.

While many of the ways in which luxury brands leveraged technology to overcome the challenges of 2020 represent tremendous leaps forward, it is clear that the luxury sector has only scratched the surface of embracing digital as a vehicle for growth.

With the right leadership, talent and culture, luxury brands have the opportunity to lead not only their industry, but also retail as a whole into an increasingly digital future.