Diego Abba, CEO, Italist Inc. talks to InBusiness.ae about the factors that are impacting luxury e-commerce and how to retain customer loyalty.
Where is luxury e-commerce standing today, specifically in this part of the world?
Luxury e-commerce is very healthy globally as well as here in the UAE and in some of the neighboring countries, such as Kuwait, Saudi Arabia, and Qatar.
The forecast for luxury products is expected to grow at a 4% or 5% compound annual rate in the next three years. However, the digital channel is expected to grow at a much faster pace, in double digits annually. It is still a small percentage of the global luxury sales, but it almost doubled since 2014 where it was at almost 5% vs. the current 9%. And many believe it will reach 20% in the next 3 to 4 years.
As Italist, we have sold 170 different luxury brands in the Emirates, out of the 1,000 luxury brands we carry. We have experienced great interest not only for the most established French and Italian luxury brands but also for emerging designers.
What are some of the setbacks that affect you as an online luxury retailer but don’t impact other e-retailers?
Fortunately, we have not experienced any major setbacks yet.
Our model is different from the traditional model of an e-commerce luxury goods business, like Gucci for example, or a multi-brand luxury department store, like Barney’s. These are characterized by having relative “limited” offering, slow product discovery while carrying high inventory costs.
Italist has unlimited offering, very fast product discovery and zero inventory cost, at a price point that is significantly lower than other retailers, through almost 200 Italian luxury boutiques that are our partners.
Of course, we are working hard to continuously improve our customer experience. One of our next major milestones would be to have a site that is localized, in terms of language and communication style. At the moment our site is in English globally.
How is artificial intelligence influencing customers’ experience, namely their online security?
Online security is a key concern that all companies take or must take seriously. Artificial intelligence is better used to fully understand and optimize the customer journey of very different customer segments through a meaningful interactive communication.
How are new technologies changing the way you deal with customers?
Technologies already changed the way we deal with customers. I believe that a physical retailer without an omnichannel strategy is doomed to fail. This is due to the advantages of combining the live experience of the physical channel with the convenience of the digital experience (anything, anytime) and the easiness of finding data on products, peer reviews, price comparisons in order to make the best purchasing decision.
Also, “search tools” and the ability to master them have become the first priority. Therefore, a well-thought Search Engine Optimization (SEO) strategy is mandatory to get your website to the top of Google search, or other search engines.
Finally, the “traditional” way to engage with customers has changed completely several years ago. The desired focus is on the interactive relationship with the customers usually mastering social media.
As Italist, we are communicating and offering our products digitally; hence technologies play a vital role for us and the way we interact not only with our customers but with our luxury boutiques partners.
What makes consumers unable to be loyal to one brand in this fast-paced digital era?
The first shock to the traditional framework on loyalty came with the millennials. The generation before, Generation X, has been considered cynical but it had the highest rate of loyalty.
For the millennials, brands come the third among their loyalty factors, after value (they were deeply affected by the 2008 financial crisis) and referrals from people they know personally or online, who share similar interests. However, they expect the brand to be loyal to them; if it is not the case, they would change it.
Technology allows multitasking through different devices, hence reducing the attention span to any specific channel or content, and making the customer acquisition process even more complicated. It also offers the ability to compare products and prices instantly empowering consumers on brand selection.
What is Italist Inc. doing differently to maintain customer loyalty?
At Italist, we believe in offering the best value for our customers. We are partnering with the best buyers in the world for luxury, the Italian luxury boutiques, to create a unique and massive offering, comprised of 1,000 luxury brands from France, Italy, US, Japan, and other countries. That includes limited editions and items almost impossible to find outside Italy. We combine this incredible offering with the best available prices, the ones from Italy, and the convenience to order through a device everywhere and receive the product at home within few days, through the express service of DHL.
We also believe in having an interactive communication with our customers through digital media platforms or more traditional channels. I have also read all the 1,300 reviews and feedbacks that our customers send us after purchasing at Italist Reviews to make sure that we can progressively incorporate meaningful suggestions.
Article by channel:
Everything you need to know about Digital Transformation
The best articles, news and events direct to your inbox
Read more articles tagged: Loyalty