LUXLOCK: The startup company you should be following and why.
Earlier this year, I made some predictions in Innovate or Die: 5 Omni-channel Strategies Amazon is Trying to Outrun. As a part of those predictions, I talked a little bit about the “barbell effect” and how there would be a dichotomy between luxury/high-end, customized, boutique firms that offered a unique customer experience for a premium and hyper-local/convenience based omni-channel models competing on price.
This post will spotlight a startup company out of New York City that is a perfect example of the barbell effect in action. Luxlock is gearing up to take luxury customer experience to the next level.
I had the pleasure of interviewing Casey Golden, Founder and CEO of Luxlock. Luxlock is a Fully-Integrated Live-Merchandise Selling Platform and Omni-channel Management Solution focusing on high end retail brands from the premium denim industry and spans across the contemporary, luxury apparel, beauty, and lifestyle products.
- For shoppers, “Luxlock makes it easy for your favorite brands to roll out the red carpet.”
- For retailers, “Our clients share one common goal; whether a top luxury brand, specialty retailer, pure play e-tailer, or a new wearables start up deliver an exceptional shopping experience.”
Basically, Luxlock supports luxury shopping and is positioning itself as the antithesis of Amazon, Facebook, advertising, and Google search strategy. Instead, they scale a standard of excellence and generate an organic pull-marketing strategy.
Who is Casey Golden? Casey is no stranger to customer service and has served in every role, from client advisory positions to overseeing major corporate initiatives. She holds a rockstar resume of success from her time at Mario’s, Bloomingdale’s, Ralph Lauren, specialty retail consulting, supply chain management at Simparel and her current position as a Digital Strategist. Basically, Casey has seen it all. She was the person you would take with you to Italy to shop Brunello Cucinelli the right way; in Solomeo. Along the way Casey has built relationships with retailers and became a master of the customer experience (think Bonobos’ ninja with dragons).
“The clients put so much trust in my recommendations because I was able to communicate why they should feel good about buying. It takes skill and hard work to sell clothes. It is not easy to instill confidence in someone to buy their first pair of leather pants or spend money on their first quality products. It’s an educational process and a relationship. You know you’re doing your job when I become your mirror, and the shopper trusts me more than their own insecurities.”
What is Luxlock doing and why does it matter?
Basically, Luxlock is positioning itself to take on and manage your purchase and behavioral data in order to enhance all of your retail experiences.
So instead of using your Google+ account or Facebook to sign in to OpenTable, you would use your Luxlock account. Luxlock would work with retailers you frequent to enhance your customer experience. For example, if you use Luxlock to sign in to OpenTable at your favorite restaurant where you always get your favorite bottle of Bruno Giacosa Barolo, Luxlock will allow the retailersto see the best ways to spoil you.
Let’s say you are one of Ralph Lauren’s top NYC shoppers, however, it’ October and you haven’t shopped, purchased online, in-store or even at Barney’s where you are a regular. By using Luxlock, you’re likely to get an invitation to the Polo Bar with your favorite ’07 Barolo waiting for you. While this is just one example, capturing this data is not easy without a centralized solution like Luxlock. The real question is, will it scale?
“Chanel can’t provide guaranteed 2 hour delivery right now, but shouldn’t they have been doing it before Amazon? Technically, the Chanel personal shopper will run the item or send it with a messenger. They’ve been doing in manually for decades.”
How does the Luxlock model affect the supply chain?
For clients that spend a lot of money and are willing to pay a premium for high-end fashion and luxury items, this model makes a lot of sense not only for the client, but also for streamlining that retailer’s supply chain. In a sense, Luxlock is taking a specific line of data to support the client experience, but also turns that data into actionable ways to streamline the luxury fashion business as a whole.
- Retailers could immediately cut advertising that is expensive and hard to measure/manage — See more here.
- Procurement would know exactly what the company needs to keep in size and stock keeping units (SKUs).
- The retailer’s brick and mortar shops would be able to offer a curated boutique experience and “right size” the assortment and space based on the customers that shop there.
- Production and warehousing costs would also be reduced due to a decrease in the amount of product returned and left unsold. “With visual consumer data, you don’t have to rely on your gut”
In 2016 brick and mortar retailers like Aeropostale, JC Penney, Gap, Walmart, and Macy’s closed many stores in response to customer demand for omni-channel, but even after offering omni-channel solutions, these firms continue to lose market share to Amazon.
So, what is the solution? What are these groups lacking that is costing them business? In my opinion, it boils down to a relationship.
President Club sales people (million dollar sellers) might have a 1%-3% return rate. As Casey said, “I know them and they know me, I can count 5 years of returns on my hands when I was a store associate.” Ecommerce firms might see a 30%-40% return rate for fashion and apparel products, which would not be sustainable for conventional brick and mortar retailers.
I think offering a hybrid solution between the omni-channel convenience and added customer service from luxury retailers would begin to close the gap on returns, increase conversion rates, and increase efficiencies across the supply chain.
“If I can see the emotional purchase and receipt, I can increase the frequency of customized client interaction and protect the data in a way that keeps other firms from misusing information.” — Casey Golden
What will Luxlock provide for luxury retailers?
According to Business Insider, wealthy consumers are expected to spending more of their disposable income this year on fashion, travel, and dining. Among these categories, spending on fashion (specifically, apparel, accessories, and handbags) will grow the most, increasing 6.9% to $37.4 billion (roughly 9% of total discretionary spending).
Luxlock estimates that by capturing the right data from client interactions, luxury retailers using Luxlock will see a topline increase of at least 22.5% in their site conversion rates. According to Casey, many of these luxury retailers are not capturing executable data.
Bottom line, very few luxury brands are putting their resources toward the direct to consumer sales market, and they are missing out. Luxlock seems to have a handle on this market and has packaged it in a way that is sexy on the front end, but can also manage the back end supply chain, which is typically not so sexy.
Casey goes on to say, “There is an entire workforce of people out there busting their butt that love being personal shoppers. These folks aren’t making enough money and their feet hurt. Luxlock not only helps the corporate entities streamline their business, but also serves to create a community that supports the hard working folks out there that make a living on luxury customer service.”
Look for LUXLOCK to roll out in Q2 2018!
Thanks for reading and let’s keep the conversation going.