Luxury brands and chat — A bespoke fit?
Leaders in the $20 billion global luxury market are leveraging the rise of messaging apps to thrive in the conversation economy — leaving laggards without much to say.
High touch service at scale is no longer the purview of the wealthy. 2.5 billion people use messaging apps daily, with projections rising to 3.6 billion by 2018 according to advisory firm Activate.
The good news — luxury brands already understand the value of customer intimacy and proximity. The bad news — smartphones are commoditizing both. Thought leaders like Nordstrom are already a few steps ahead.
Nordstrom’s personal shoppers work closely with the brand’s most exclusive customers. They know their sizes and tastes well, with many talking and texting like old friends. Sensing an opportunity, Nordstrom launched TextStyle in the summer of 2015, a messaging app to strengthen their already strong customer connections.
TextStyle allows personal shoppers to message with customers and make purchases directly from the conversation without having to enter a credit card or complete a form. This strategy leverages technology to reinforce two classic luxury brand attributes: proximity (being accessible from any smartphone), and customer intimacy (always knowing what to recommend).
“The service is part of a push to use technology to preserve the close relationships Nordstrom sales associates cultivate with individual customers.” — Nordstrom CIO, Dan Little
Delivering stellar service will only become easier as software continues eating the world — personal shoppers included. Facebook’s M, is an early form of artificial intelligence that marries human-like engagement and deep subject matter knowledge. Cortana, Siri and Alexa are voice based assistants that may be clumsy now, but no doubt getting smarter with every stumble. Platforms like Messenger for Business are fast tracking chat based customer service to 800+ million users.
Digital already influences three out of four luxury purchases and will soon impact 99% of sales, according to McKinsey.
Everlane was one of the first luxury brands to team up with Messenger to deliver customer service and track shipments and returns. Approximately 200 request come in daily, handled by 1–2 employees according to Frerk-Malte Feller, leading Business on Messenger at Facebook.
These are early days but within the next 12–24 months luxury brands need to define new ways of serving customers via mobile in every way possible — and deliver flawlessly. Classic luxury segments like travel and yachts are already teaming with IBM to bring a new breed of AI sales assistant to life.
IBM’s Watson is quite the seasoned traveler paired with WayBlazer, billed as “the first cognitive travel platform.” WayBlazer uses IBM Watson’s natural language processing services to dynamically present hotel recommendations based on natural dialogue such as: “Where are the best hotels in the Caribbean for my honeymoon in June” or “Best hotels with pools on the Amalfi Coast for a stay at the end of August.”
With 81% of luxury buyers planning their own trips, according to a study from Leading Hotels of the World, advanced services like WayBlazer could become the norm for a demanding new generation of mobile-first consumers.
Yacht Harbour is another Watson powered platform that brings artificial intelligence to high-end vessel sales. Personified via “Brook” (i.e. Siri for yachts), this Yacht Harbor AI helps buyers navigate the daunting vessel purchase journey. An enhancement likely to bring a shorter sales cycle and higher margins.
According to digital benchmarking firm L2, 80% of future growth in the luxury category is tied to digital — giving early leaders a clear advantage.
Some of the old guard luxury brands may have missed web 1.0, or even the social wave, but those ignoring messaging, risk being left out of the conversation for good.
–Anthony Cospito is Managing Director of Popbox Digital and contractor with C Space.
Tagged: branding, Customer service, Facebook, fashion, innovation, L2, luxury, messaging, Messenger
Originally published at popboxdigital.com.
