Whether diamond jewellery, prêt-à-porter fashion, handbags, perfumes or luxury watches: the premium segment of the retail market is immune to crises. It is consultation-intensive and generates high sales. The stores and boutiques are located in exclusive locations in every metropolis and major city. With retail analytics, luxury retailers can use KPIs to analyse customer behaviour on the sales floor in detail and manage and improve their store's performance based on data.
Luxury goods market with its own rules
Despite high brand awareness, occasional visitors to stores in the high-price segment tend to be the exception. Customers with the necessary willingness to pay visit a store on an occasion-specific and needs-oriented basis. As a result, the number of visitors to luxury stores usually differs greatly from that of average retail stores. It can happen that only a handful of visitors enter a store in a single day. Of course, there are also larger luxury department stores in the high-price segment that attract higher visitor numbers per day. But exclusivity is typical for luxury retailers.
With robust sales and high margins, the luxury market is particularly crisis-proof. As a result, competition among luxury retailers to attract customers and increase sales per customer is intensifying. In the high-price segment, customers have a strong emotional connection to the respective brand and to the exclusive individual products. However, luxury retailers, luxury brands, jewellers and luxury department stores still have too little information about what visitors do in their stores. Any technological solution must therefore be flexible enough to analyse customer behaviour in different contexts.
Retail analytics for data-driven management decisions
What is the customer journey like in a store? Where do customers linger the longest? How many customers go to a higher floor? How many interactions are there with staff? How long are customers advised? Retail analytics can answer these and many other questions. When retailers have details about the age and gender, walking routes, length of stay and behaviour of customers, they can optimise the shopping experience in line with expectations and needs.
With retail analytics, management decisions are based on concrete data from the sales floor. This makes it easier for management to identify and understand trends. Knowing typical visitor traffic for different times of day, days of the week and seasons is important for determining the right number of staff. This is because customers in the luxury segment expect a high level of service at all times. Luxury retailers can also test changes in the store to improve the shopping experience and efficiency.
Measuring the effectiveness of advertising measures
Retail analytics provides luxury retailers with insights into customer structure and behaviour. The results help to carry out effective customer segmentation. This makes it easier to target particularly profitable customers. The information gained can be used to carry out targeted advertising campaigns.
Visitor frequency measurement then helps luxury retailers to measure the success of advertising campaigns. Visitor frequency measurement clearly indicates the impact on visitor numbers. Demographic analysis also shows whether the advertising campaign has reached the desired target group.
Optimise workforce planning
The number of visitors varies depending on location, season and product-specific demand. By predicting visitor frequency, retailers can ensure that there are enough staff in the store. This means that visitors always receive the best possible service. After all, expectations regarding the quality of advice are very high in the luxury segment. Outstanding advice increases the likelihood that visitors will return or recommend the store to others. After all, a positive customer relationship is crucial for brand image and growth.
Adapt shop layout to customer needs
Retailers can use innovative technologies to optimise their shop layouts. Luxury stores offer a curated, rather small selection of products. The presentation of goods resembles a stage setting. This is why retailers can use retail analytics to gain a particularly good understanding of how effective the highlighting of individual products is. Signs and display cases draw attention to specific products, encouraging visitors to look at them and prompting them to make a purchase.
By recording walking routes and analysing dwell times, retailers can identify which areas of the store visitors frequent and which areas still need improvement. Retail analytics provides the data needed to validly test the best shop layout that meets the needs and expectations of visitors.
Retail analytics in the premium segment
With retail analytics, customer data is analysed automatically rather than manually. This means that much less time and resources are required in the decision-making process. Luxury retailers can respond more quickly to new developments in order to remain competitive. Automated analysis also enables more accurate results, as it reduces the data noise associated with manual data collection and analysis. If you are a jeweller, luxury retailer or manager of luxury brands and luxury department stores and would like to learn more about retail analytics, Crosscan can provide you with independent, personalised advice on all technological options.
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