UK: Notes From The Online Storefront - Luxury Goes Digital

Last Updated: 19 October 2011
Article by Vanessa Barnett

Retail is in constant evolution and a hot topic at the Walpole Luxury eBusiness Forum 2011 this week was the most appropriate way for luxury brands to engage with customers using digital technology.

The Retail, Design & Leisure team were out in force at the forum and in our first 'Notes from the Online Storefront', we share our thoughts and the legal issues that may arise in the use of digital technology by brands.

Keeping customer data legal and useful

Digital technology and content have changed the way in which brands can interact and transact with consumers. Going shopping is no longer a linear process triggered by a striking above the line advertising campaign. Shopping is about engagement, personalisation and being available any time, anywhere.

Subsequently, brands must now offer a highly personalised experience to consumers based on their desires and behaviours. The web has enabled the collection of a large amount of information about consumers - at a minimum browsing habits and purchasing history, but also other information volunteered by consumers. Twitter and Facebook, as well as the smartphone applications ecosystem, have taken this a step further and brands can now use real time location and social interaction data to better engage with their consumers.

Consumers have rights to know what information about them is being collected, by whom and for what uses. Not providing that transparency can result in sanctions from regulators – but those are very much an aside to the reputational damage for the misuse of personal information which can have a greater impact on the bottom line of any brand. In the use of information, it pays to get it right, locally and internationally.

Keeping tabs on your IP and reputation

Consumer engagement is also about allowing consumers to engage with brands: fans, evangelists and not just customers. That engagement can be via a brand's website or app, but it could also be via Facebook. Issues often arise around ownership and the wider use of the content and information published by customers. Reputation management issues can also arise and will need to be carefully navigated – an element of letting go and letting customers speak is certainly also needed.

Keeping developers and agencies on their toes

From a behaviour perspective, consumers are multi-channel beings - many will watch television at the same time as browsing the web and using instant messaging or social media. So interactions in the digital environment must be immediate and effective. There is no room for egg timers or QR codes that direct only to 'page not found'.

Contractual arrangements with agencies and technology providers are key: the fast pace of evolution means that websites, apps, games, mailings and campaigns have to be right.

Right first time and right on time. When engaging suppliers, the right contract terms can be used to accelerate delivery, incentivise performance and to protect investment. The nature of the creative process needs to be considered each time: when should a brand insist on ownership of a work product and when could the use of open source and creative commons materials enable a more rapid, cost effective delivery?

Keeping the competition and counterfeiters at bay

Digital technology has enabled consumers to be savvier than ever before - and this applies across the board from value to luxury items. Price aggregation, white labelling and secondary marketplaces all divert eyeballs and clicks. And sometimes eyeballs and clicks are diverted into competitors or counterfeiters, so vigilance and an active brand management/enforcement programme are key.

Notwithstanding the more complex retail landscape, the digital consumer remains an opportunity. Digital is not restricted by demographics, floor space or by national borders - the digital consumer is a global consumer. Getting the commercial and legal nuts and bolts right remains key to capitalising on the opportunity particularly with new laws on consumer rights fresh out of Europe.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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