The data behind the designer: How data can be applied to luxury retail

4m read
Data Analytics, Data Strategy, Retail

Statistics show that the luxury retail industry is projected to be worth almost $370 billion by 2030. While the industry may be prospering, those looking to stay ahead of the pack will need to harness the power of data to make the biggest impact. When used correctly, data enables luxury retailers to anticipate consumer needs, optimise their operations, and enhance the shopping experience. With the help of data, retailers are starting to reshape the luxury experience and what it means to their customers. So how exactly is luxury retail embracing data and what effect is it having on the industry?

Improved luxury marketing

When it comes to luxury retail data solutions, one of the ways that it is being applied is through improved marketing strategies. Luxury brands are using data to enhance their marketing efforts by tracking the effectiveness of their marketing campaigns across a range of different distribution channels. This helps luxury brands to optimise their ad spend and get a better return on their investment.

Not only this, but data analytics allow luxury brands to gain insight into customer preferences like never before. This enables superior product development, with the ability to predict trends and create goods that brands know customers want to buy both now and in the near future. This is achieved by analysing data from customer reviews and feedback along with online discussions.

An elevated customer experience

The luxury retail industry is dependent on creating the pinnacle of premium experiences for its customers. Data can empower brands to glean valuable information on their customer base. This can help to create more personalised customer experiences both online and in real life. Now with even high street retail companies turning to data to create bespoke experiences for their customers, luxury brands need to deliver exceptional personalisation.

These days customers are looking for a tailored shopping experience at every stage of the buyer journey, particularly when they are paying for high-value goods, such as designer clothes or handbags. By embracing data science to improve upon this experience, luxury brands are seeing an increase in brand loyalty and ultimately a boost to their top line.

Gaining the competitive edge

What makes data so important is how it can be applied to every aspect of your business. In the coming years, luxury brands will need to move to more data-driven business models to tap into their full potential.

“Alongside the efficiency gains that data will deliver across sectors, luxury brands will see benefits in their top line too. The ability to scale the personalisation of shopping experiences, predict trends and enhance customer service creates new possibilities to elevate the luxury retail experience and increase sales.”

Sian Rodway, Chief Operating Officer, MDRx

Most luxury brands already have a vast amount of data on their clients but fail to use it for fear of alienating their core customer bases – done right, this will not be the case.

Luxury retail is moving online

While, traditionally, luxury retail has been thought of as an in-person experience where people want to see and feel the goods before making a purchase, this is changing. It has been predicted that online luxury goods sales could triple to €70 billion by 2025 – making up one-fifth of all luxury goods sales. With statistics like this in mind, it is clear that luxury retail needs to evolve with its customers. This means having a strong digital presence, backed by data, to ensure that they are maximising profits and brand visibility.

But what are the risks luxury brands need to consider?

One of the biggest risks with luxury retail data solutions is a breach of data security. This is particularly relevant to the luxury retail industry, where reputation and consumer trust are crucial. Many luxury brands are renowned throughout the world with a customer base of millions. This means they have vast amounts of data at their disposal. However, transforming this raw data into actionable insights can become somewhat overwhelming. For many luxury brands, although they have the data, having a skilled team to ensure the data is handled correctly is where they may fall short.

If you want to find out more about how emerging technologies can be used in retail then read our blog on how AI and machine learning is being effectively used in the retail industry.

How MDRx can help

As experts in data, we work with brands to implement cutting-edge digital transformation projects and luxury retail data solutions for their businesses. We have acted as consultants to renowned luxury brand Selfridges, helping them to achieve a clear understanding of the types of technologies available and how they can capitalise on them.

At MDRx we are here to help you get the most out of your data through proactive solutions and sophisticated strategy. If you are looking to elevate your brand with expert data strategies that drive real results then get in touch and begin your journey now.