NEW REPORT FINDS LUXURY CONSUMERS INCREASINGLY DEMANDING SUPERIOR IN-STORE EXPERIENCES
- A new report on the evolution of luxury retail identifies key reasons why physical stores continue to be paramount to the customer journey.
- 77% of shoppers expect to visit a luxury store as or more often in the year ahead.
- Sustainability narratives should be reflected in the composition of physical spaces, as 61% of luxury shoppers agree stores should meet higher environmental standards.
- Almost half (49%) of shoppers believe a store should be more than a space to simply buy luxury products, presenting opportunities for brands to build deeper connections with customers.
Download the report here.
LONDON, April 11, 2023 /CNW/ - The demand for physical retail remains a crucial part of the shopping experience among luxury shoppers, according to insights from The Evolving Art of Luxury Experiential Retail, a new report from BoF Insights and Royalmount. BoF Insights, the data and analysis think tank at The Business of Fashion (BoF), partnered with Royalmount, an upcoming shopping district in the heart of Montreal, to examine the shopping preferences of luxury consumers in North America.
The report draws on Royalmount as a key case study by highlighting the need for a holistic approach to retail concepts, drawing insights from a survey of over 1,500 US and Canadian shoppers. Nearly one third of luxury shoppers cite green spaces as being important to them when shopping, and a similar proportion (37%) report feelings of happiness when they shop in-store. As a future destination that will provide a mix of retail, dining, leisure and public spaces, Royalmount embodies the link between these spaces and the emotional responses they create.
Despite operating in an increasingly digitally focussed world, where brands are investing in digital methods to engage customers - from AI to the metaverse - it is clear that stores still play a pivotal role. The physical store is still a major draw for shoppers, with 77% of consumers expecting to visit luxury stores as or more often in the year ahead. The report found the desire to shop in-person remains strong in the luxury sector, and consumers are increasingly demanding more from a shopping experience, meaning brands must continue to evolve to create an experience that satisfies these valuable shoppers.
BoF Insights reveal nearly a third (31%) of luxury shoppers visit a physical store at least monthly. Drivers of this behaviour are often based around the tangible benefits of face-to-face interactions; for example, 68% of shoppers prefer to involve a physical store when it comes to customer service.
Through consumer research, case studies and industry analysis, the report identifies three key pillars that create dynamic retail experiences for luxury consumers: connectivity, sustainability and inclusive luxury.
Supercharged connectivity
The value of technology lies in its ability to enable deeper human connections, rather than replace them altogether. For luxury shoppers, the benefit lies in being rewarded for their loyalty and access to services they can only enjoy in person. More than half (51%) say tech-enabled loyalty programmes are the most important offering when visiting a luxury shopping destination, closely followed by complimentary amenities (50%) like free WIFI that enhance their customer journey.
Sustainable Retail
61% of consumers agreed that retail stores should meet higher environmental standards, which is why more brands are utilising their physical stores as a way of representing their values. From Nike recycling old apparel and footwear in order to create building materials to Reformation encouraging customers to recycle by paying customers to drop off pre-loved items, sustainability is now an imperative for brands to actively demonstrate how they are taking a responsible approach to the environment.
In tandem, it is clear consumers in urban areas are looking for destinations that convey elements of nature within them. Nearly one third of shoppers rated an abundance of green spaces as one of the most important factors to a retail destination.
Inclusive Luxury
Mixed-use facilities appeal greatly to shoppers. The defining factors that attract people to these spaces include dining options (58%), entertainment (31%) and green spaces (27%). The data also reveals these curated physical retail experiences invoke an emotional reaction in the shopper, with feelings of happiness (37%), curiosity (35%) and inspiration (34%) being some of the most common emotional reactions.
Harnessing inclusive luxury to attract a wider demographic to stores, rather than allowing it to alienate certain customers, means brands can speak to a wider cohort of individuals. Shopping destinations that appeal to the wider community, from retail and entertainment to leisure and public spaces that everyone can enjoy, will create greater long-term engagement and loyalty compared to short-term sales.
Andrew Lufty, CEO of Carbonleo, said: "It's clear from this report that luxury players in the industry must continue to invest in physical spaces, and the three pillars around sustainability, inclusivity and connectivity are essential to creating a place where people want to spend their time. At Royalmount, years of research and thought have gone into creating a space where people feel happy and fulfilled - it's not just about transactions but developing a destination that creates connections and an emotional journey."
Rahul Malik, Managing Director, North America, at The Business of Fashion, said: "In a time when fashion brands and retailers are increasing their digital presence and technology from the likes of AI to the metaverse is becoming more sophisticated - it is clear the importance of physical stores cannot be ignored. For brands wanting to attract luxury shoppers, the report highlights the key factors this valuable audience is looking for and how to implement strategies necessary to appeal to them."
The Evolving Art of Luxury Experiential Retail is a new report published by BoF Insights, the data and analysis think tank at The Business of Fashion, in partnership with Royalmount, a future shopping district in the heart of Montreal. The project will feature an abundance of green spaces, including a 3 km elevated linear park, and will be the first 100% carbon-neutral mixed-use development in North America, as well as the largest LEED Gold retail project in Canada. The report consists of over 15 interviews with industry experts, proprietary consumer surveys of US and Canadian luxury consumers, and case studies on the likes of Nike, Sephora and Harrods.
Royalmount is a new Montreal destination located in the heart of midtown, where connectivity, creativity and sustainability meet and thrive. The district will be the first 100% carbon-neutral mixed-use development in North America, as well as the largest LEED Gold retail project in Canada. It will feature more than 170 retailers, including 60 restaurants as well as experiential attractions. Conceived by real estate development and management company Carbonleo, Royalmount's aims to bring the best brands, experiences and offerings to the Quebec market. The first phase will consist of an 824,000-sq.-ft., two-level retail and lifestyle complex. The district will also house a 3-km elevated linear park, Le Champ LibreTM, as well as an 1.8-acre urban park.
The Business of Fashion is a next-generation media company recognised around the world for its authoritative, analytical point of view on the $2.5 trillion global fashion industry. Serving members in more than 125 countries, BoF combines independent, agenda-setting journalism with practical business advice, online learning, career-building tools and immersive events and experiences designed to open, inform and connect the global fashion community. www.businessoffashion.com
NOTES TO EDITORS
Citations
Any citations should reference 'The Evolving Art of Luxury Experiential Retail by BoF Insights and Royalmount'.
SOURCE Royalmount
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