Analysis: Why Bvlgari's online store in SG shouldn't just be a replica of its boutique

Italian luxury brand Bvlgari recently launched its eCommerce platform in Singapore, as part of the digital expansion. The move comes amidst the COVID-19 pandemic that has impacted luxury boutiques worldwide. In March, McKinsey predicted global luxury sales to dip 25% to 30% during the first quarter of 2020. For the year as a whole, it modelled three scenarios for the likely performance of the market, involving contractions of 15% to 18%, 22% to 25%, and 30% to 35%.

Bvlgari's new eCommerce platform has 3D product images and AR features which allow consumers to scale Bvlgari bags true-to-size in a real-world environment, CNA Lifestyle reported. It added that Bvlgari plans to incorporate the technology for watches, jewellery and other categories within its catalogue. The new eCommerce platform also has a dedicated e-concierge team to answer customer enquiries.

Quoting CEO Jean-Christophe Babin, CNA Lifestyle said eCommerce must be an engaging and exclusive 360-degree experience, offering the same service delivered in a Bvlgari boutique. Babin added that the content and information of the website has to compliment with the boutiques. According to Babin, its eCommerce platform has been its "number one store worldwide with growth exceeding 100%" amidst the pandemic. Following Singapore, UAE, Italy, France, South Korea, Mexico and Brazil are the next countries to welcome Bvlgari's eCommerce store.

The trend of luxury brands creating virtual stores is not new, with Valentino launching a 3D virtual store on Tmall in 2018 that mirrors its physical pop-up in Beijing, for example. Meanwhile earlier this year, Burberry also launched an AR shopping tool through Google Search technology, allowing consumers to experience Burberry products embedded in the environment around them, enhancing their research and shopping experience online. When searching for Burberry items using Google Search on their phone, consumers can see an AR version of the product at scale against other real-life objects.

Forrester's senior analyst Xiaofeng Wang said the trend started in markets such as China, where consumers are more digitally savvy and eCommerce is more mature. The pandemic has also certainly accelerated the digital transformation process across industries including luxury retail, and Wang expects luxury retailers to quickly move their events and businesses online.

While the immersive experience created online would not be the same as in-store experience, Wang raised the case of using digital channels as a way to offer personalisation and a premium experience. Citing Louis Vuitton as an example, Wang said its store associates shared exclusive offline promotions with customers remotely via QR codes to offset the pandemic's impact on offline sales. Louis Vuitton also moved pre-sale consultations and post-sale customer services online, to maintain a consistent shopping experience, and partnered with SF Express to ensure smooth delivery.

In the luxury world, experience and personalisation are one of the main draws for consumers. While it is easy to experience them at physical stores, it can be tough to replicate the experience of a luxury boutique online. That said, Rakuten Advertising's director of strategic partnerships - Asia, Alexander Short, said the increasing use of advanced AI can allow luxury retailers to successfully provide a personalised experience.  Effective forms of AI that luxury brands can lean on include virtual fit tech, which allows consumers to use their webcam and AI technology to "try on" items prior to purchasing. One company that has already implemented this tech is eye-wear brand Ray-Ban, which allows buyers to try on sunglasses virtually before making an informed decision. Luxury brands can also incorporate this and improve discovery for their consumers with the visual search function that allows them to upload product images and be directed to the correct or similar item, Short explained.

Additionally, adaptive homepages using advanced customer data and interactive chats along with personalised discovery are also key for luxury brands. According to Short, these forms of AI significantly improve customer satisfaction, reduce return rates, and allow luxury brands to target consumers with the precision and customer service that they expect. He added:

I anticipate that in the near future we will see even further advancements such as reaction or emotional based responses - guiding customers based on their facial expressions or action triggered responses to certain product categories.

Similarly, R/GA's Asia Pacific executive technology director, Anthony Baker, said with the right factors, it is true that voice, AR, natural language processing, machine learning and AI can truly innovate the digital customer experience, and create adaptive and unique ways to deliver the brand’s value proposition. However, there are things that cannot be replicated well online, such as textures, materials, environments, scent, empathy and kindness.

"Smart brands will not only recreate the store as a virtual space with eCommerce capabilities, they will look for ways to create communities, services, wellness complements, loyalty and added value. Personalisation is possible, especially with radical new technologies and services coupled with a creative mind," he added.

Meanwhile, Jeremy Webb, VP of customer engagement and commerce, Southeast Asia at Ogilvy said that data and technology can indeed reproduce aspects of the offline personalised service as part of a brand's communications and on its app, website and other owned online platforms. This can help in creating positive experiences, such as the feeling of being valued, understood and recognised. However, all brands have to find the right balance and this is no less the case for luxury brands, which have their own unique set of opportunities and challenges.

"While I would say it is all about experience in the luxury world, I would not say it is necessarily 'all about personalisation'. A customer service person remembering you, yes. Personalised recommendations, yes. And some slight customisation of product, yes. But different communications for different consumers? Hyper personalisation in all communications? I am doubtful," Webb added.

According to him, while personalisation is en vogue, many brands are rushing into it without realising its pitfalls and the benefits of not personalising. 

For example, personalisation for everyone can be expensive. Does the cost of doing so justify the gains in experience and conversion rates? Not always, in my experience.

Webb also explained that there is also a case for a single, non-personalised shared experience among customers - the knowledge of a customer in Vietnam that a customer in Milan is experience and buying an identical Bvlgari could be adding to the brand's cachet. "This is why Bvlgari and other luxury brands will have worked especially hard to maintain the right balance in their communication and experience," he said.

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Different, yet complimentary 

Instead of making a clear separation between online and offline experiences, Webb said the experience should be one that involves both online and offline touchpoints. A luxury shopper, for the most part, will experience the brand through a combination of both, he said, explaining that often times, they begin research online but head to the store to complete the process. On other occasions, it is reversed, with the shopper discovering products offline and buying them later online.

"So, it would not make sense for online and offline channels to attempt to offer exactly the same experience. More important, therefore, is that the online and offline parts of the omni-channel experience, while being different, complement one another," Web added. That said, it can make sense to create online aspects of the offline experience. For example, if an online experience can recreate the feeling a shopper might have while offline of being recognised, valued and understood, then that can only improve the experience.

But in some cases, attempts to clumsily recreate go too far. Using AR to recreate the fitting process can easily seem forced and, at least last time I tried it out, clunky.

According to him, there is a danger of technology not living up to the experience one would expect from a luxury brand. Webb said this part of the offline experience is probably better reserved for the offline experience - even if other parts of the shopping journey happen online.

Likewise, Forrester's Wang also said that the digital and physical experiences are not separated or in conflict with each other. Instead, they should work closely together to deliver seamless experience to channel-agnostic shoppers today.

That said, Wang believes that the virtual store is just one of many digital initiatives luxury brands can take. There are more ways such as live-streaming shows on social media and adopting live-streaming commerce, she said, adding that the digital experience that luxury brand create online would not be a simple re-creation. This is because touch and smell are not involved. The digital experience, however, can sometimes be better. Customers, for example, are able to zoom in for details or carry out virtual tryouts and easily mix and match colours and styles, Wang explained.

Meanwhile, R/GA's Baker, who said brands would be missing a big opportunity if they focus on just replicating the experience. This is because there are physical elements that cannot be replicated, and digital platforms and environments still do a poor job at it. "Think clumsy VR, limited AR, and inexistent full 3D holographic projections," he added.

However, there are elements of the physical store that are no longer that important. According to Baker, convenience, personalisation, context, adaptability and availability can be achieved and fine-tuned better online.

"Brands can save large sums of money and resources from physical store management, and divert those resources to better, modern online services that work better and harder for consumers. I believe the best path for brands is to identify the key elements of physical stores that consumers really care about, and figure out ways to elevate, evolve or augment them on the digital experience," he explained.

Beyond that, luxury brands have a huge opportunity to enable platform business models that can connect consumers among valuable communities, and also other sides of networks - such as designers, buyers, manufacturers and craftsmen.

Brands that just add eCommerce and delivery capabilities to their sites and call it a day will soon find themselves disrupted by bolder brands that will go beyond - creating new value, communities and reasons.

Pitfalls brands should look out for

Brands should be aware of the trap of trying to offer a like-for-like in creating their online experiences, Baker said. Instead, brands need to bring strategic business thinkers that understand the business, the world trends and the technology that can enable luxury brands to create the future of luxury in the online space.

Relying on the social network quick wins, badly implementing physical-replicas online without differentiators on eCommerce and customer engagement will not drive the required sales, engagement and conversions.

"Data insights, measurement and tech will be key enablers, but overall, brands must rethink their online value proposition for the upcoming disruptions," Baker added.

Having a digital storefront is also just the first step. According to Wang, luxury brands need to invest in eCommerce marketing, customer engagement, and logistics to ensure consistent shopping experience. It is also important to train store associates how to use digital tools such as messaging apps and live streaming properly to communicate and engage with customers.

Meanwhile, Rakuten Advertising's Short is of the view that testing and learning should be a core aspect of luxury retailers foray into the eCommerce world. The use of AI should be split test on similar audience groups to fine tune and understand the effect on the customer experience and online conversion.

He also warned luxury brands of doing too much, as confusing the customer or over complicating the experience could mean that they simply abandon the sale altogether. 

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