Experiential retail strategies to boost luxury this Christmas

December 1, 2021

This Christmas, in an uncertain retail landscape, luxury brands and stores must differentiate themselves with greater distinction than ever before. Doubts surrounding a return to ‘normality’ – due to a succession of supply chain issues – means forward-thinking marketing strategies must be deployed to win and retain new consumers.

Robert Lockyer, CEO, and founder of Delta Global

Accordingly, brands need to prioritise the experiential argues Robert Lockyer, CEO, and founder of Delta Global, a sustainable packaging solutions provider for luxury brands.

In times of normalcy, it is common to have a Christmas marketing plan finalised and ready for implementation by September. Yet, if we wind back to that time, news feeds talked of fuel crises, scarcity of products, congested supply chains, and heavily delayed deliveries. You would be forgiven if your marketing ambitions and profit forecasts for the Christmas period were somewhat moderated.

The more optimistic predictions for 2021 forecast a return to near 2019 levels. But this tends to assume a return to 2019 levels of undisrupted supply chains – something that now seems impossible at the time of writing. The best we can hope for is a return to normalised supply chains, according to Drewry, the maritime research company, is at the end of 2022.

This is a particular problem for the luxury sector. A luxury customer does not expect compromise – on the quality of materials, on the variety of a range, or with significant delays in the delivery of the product. It is why the forecasts for pandemic-related losses for the luxury sector were second only to hospitality, cited at around $450 – $600 billion in sales.

This leaves luxury retailers with two choices. To capitalise on the Christmas market, you can ignore the complexities and simply increase prices to cover for any shortfall on profit aims and projections. But the price hike deployed by luxury retailers in China between 2010 and 2014 serves as an example of aggressive increases and their potential consequences. Unless you have a loyal customer base born of several decades of marketing, price hikes can kill a luxury brand.

“In watches, the idea was to increase prices and continue to develop rich merchandising, but when the [Chinese economy] boom ended many companies and brands had to reconsider their price and product architecture,” says Francesca Di Pasquantonio, managing director of equity research at Deutsche Bank. “Many brands in the category have never recovered.”

If you do not happen to be a luxury heritage label backed by a multinational corporation, another strategy is required: Experiential retail.

Experiential retail 

Experiential retail offers additional experiences beyond browsing and buying. In the context of luxury retail, when something of significance cannot be delivered upon – in short, an inventory flow with little precision, a limited selection, uncertain deliveries, and shortage of materials – it must be replaced.

This Christmas, luxury brands need to consider simple experiential strategies to protect themselves from these sudden pitfalls. In a competitive market where luxury retailers are competing for custom without the assurance of certainty, a luxury brand must attempt to differentiate. Experiential retail helps us to do this.

The benefits of experiential retail make it an essential Christmas marketing tool. Consumers are increasingly and significantly expectant of experiential services. In this market, waiting for a consumer to make several purchases before loyalty is won is not feasible. Implementing an experiential retail strategy can greatly increase the rate of brand loyalty: 93% of customers say they will likely purchase again if their previous experience was excellent.

Online and in-store     

There are two ways an experiential retail strategy can be implemented: online and in-store.

A memorable, immersive luxury retail in-store experience can be executed in two ways; the Nike way, and the Apple way. The Nike approach delivers an intimate one-to-one personalised shopping journey. The look, feel, and flow of the store align with the Nike app, which customers are encouraged to use. Nike refers to it as a ‘digitally enabled playground’ where the personalisation of products, including digitised foot scanning, attunes the product to the person. This type of experiential retail service takes considerable planning.

By taking the Apple approach, instead, luxury stores can provide experiential retail this Christmas. The first task is to ensure staff hold comprehensive product knowledge; fully understand seasonal trends and current styles, and be able to communicate this to meet individual customer needs.

In-store classes, events, and personalised shopping offerings can transform the standard shopping experience. When combined with a retail space that encourages time spent relaxing, through carefully designed restful areas – sofas, a gallery wall space that reflects your brand, screens that show content relevant to the season and the customer – you are increasing the customer experience and the time they spend in your store. This short-term experiential fix can be enhanced with any relevant customer data you possess, localising your experiential offerings.

The idea with experiential retail is to create a store that feels alive, yet encourages a slower shopping experience. But the online version may offer an even more practical, long-term alternative. This will center on the production of luxury packaging.

At Delta Global, we’ve created the FutureBox, a template design that each box can be tailored to brand aesthetics and its sustainability goals. The sustainability of the box is important both ethically and to consumer demands, with 75% of millennial consumers prioritising sustainability when making a purchase.

Packaging can be amended to create an unforgettable unboxing experience, with the inclusion of QR codes linking to events, fashion shows, styling guides, and tips. Personalised messages and brand stories can be conveyed in ways limited only by the boldness of your concepts. Interiors can be altered so that the unboxing develops gradually, increasing the sense of discovery and excitement essential to a luxury product experience.

If luxury brands are not yet thinking about how to enhance the experiential element of their offerings, it is a certainty that their competitors are – for this Christmas, and beyond.

About Delta Global

Delta Global are a leading worldwide luxury packaging provider. With a passion for progressiveness and focus on sustainability, they have revolutionised the packaging sector in recent years. Innovating recyclable solutions, reinventing packaging as a reusable product, and presenting packaging as just as important as the product itself. www.deltaglobal.co

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