What Luxury Retailers Can Learn from Amazon
In 2022, Amazon was the second largest retailer—both online and brick-and-mortar—in the world, and in 2021 became the top apparel retailer in the US. The company’s growth and market dominance have changed the retail landscape forever. But luxury retail specifically has typically landed outside this trend…until recently, that is.
Luxury purchases have always been very emotional, with brand identity laser-focused on aesthetic representation—and always involving a personal touch. On the surface, this is not Amazon’s lane, but the luxury retail space has been impacted by Amazon because Amazon has caused consumers to expect a frictionless experience.
Today’s consumers have much higher expectations regarding how and when they’ll receive their order…often down to the hour. Amazon is astonishingly reliable, making the purchase and returns processes nearly effortless, and resolving issues quickly and thoroughly. In short, Amazon has created a nearly perfect experience…and consumers want it from everyone.
Unfortunately, this experience is far from typical in the luxury space, largely because it lacks technological advancements in essential areas like logistics and supply chain management. If luxury retailers don’t think this has a big impact on their business, consider this: A study found that 69 percent of consumers “are much less or less likely to shop with a retailer in the future if an item they purchased is not delivered within two days of the date promised.” While this might seem like a pretty high expectation, the fact is a successful online sale is not considered complete at checkout; it ends when the purchase arrives at the delivery address on time and in good condition.
Look to Amazon—and technology—to meet today’s consumer expectations
While luxury fashion retailers don’t necessarily need to deliver as fast as Amazon, there is much room for improvement. There are many opportunities in supply chain management and logistics that will translate—quickly—to greater returns and higher margins. Start by looking at your processes and determine if your technology can support what you need to deliver a better customer experience. ArcherPoint can help; our retail team can help you put the right technology in place. Contact us today.