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Narvar's 2023 State of Returns report is here—get your copy now!
The future of retail experience innovation will be spurred by the leaps the industry has made over the last 10 years: a combination of digital experiences and lightning-fast fulfillment.
In the early days of online shopping, customers regularly waited 7–10 days for their purchases to arrive. Now, thanks to Amazon’s growth in Prime and Prime Now, customers expect purchases in two days, or even two hours. But before Amazon’s foray into practically on-demand shopping, same-day delivery in ecommerce had its roots in the luxury sector with Net-a-Porter.
Net-a-Porter spearheaded the practice in 2009 with their “premier service,” which offered same-day shipping to New York City customers for a flat rate of $25 per order. In 2013, the company even started airlifting same-day deliveries to the Hamptons during the summer for the same $25 flat rate.
Barneys New York took note and started offering same-day delivery to its ecommerce customers based in Manhattan (and certain ZIP codes in Brooklyn and Queens) in 2015, also for $25 per order. While top Barneys’ customers who established relationships with their sales associates had enjoyed same-day courier service of purchases for decades, this version of Barneys’ same-day delivery was available to any shopper in the right ZIP code.
Today, retailers continue to experiment with and expand their same-day services. Both Rent the Runway and Asos have same-day delivery in a limited number of locations. Net-a-Porter extended its premier service to Hong Kong, Dubai, Los Angeles, and London—in addition to New York—and has since launched a “you try, we wait” approach for Extremely Important People (EIPs) in London, New York, and Hong Kong. EIPs pay an annual fee for luxe services, including a same-day service with a personal shopper who waits for the customer to try items at home and collects any declined items for immediate return. (While Net-a-Porter has not publicly disclosed pricing or criteria for EIP membership, the New York Post estimates the retailer’s clients spend upwards of $70,000 annually for the privilege.)
The try-before-you-buy approach to ecommerce clearly has legs, given the success of subscription boxes like Stitch Fix and Trunk Club, which use algorithms to select new apparel and accessories for clients, and Material World, which applies to the pay-for-what-you-keep model to pre-owned luxury fashion. Luxury retailers have also tried incorporating additional parties into their customer relationships, which will likely continue in the future. For example, in 2014, Neiman Marcus partnered with the St. Regis Hotel in Washington D.C. to offer guests closets stocked with a curated selection of Neiman Marcus pieces based on the guest’s size and style preferences. The service was free, and guests could try on and purchase the items they liked, directly from their hotel rooms.
Luxury brands understand the power of partnerships to experiment and reach new audiences, as evidenced by Gucci’s luxe upgrade to the relatively moderately-priced Fiat 500, the H&M collaborations with brands like Moschino, Balmain, and Alexander Wang, or even the Missoni-designed Pellegrino labels. While high-low partnerships show no signs of slowing down, there’s even greater untapped potential for brands to create immersive experiences in the spaces where potential shoppers pass their time.
With the explosion of co-working offices and ride-sharing, luxury brands have an opportunity to engage customers in places where they are captive audiences. Perhaps that means Le Labo-branded Uber black cars, complete with curated playlists, exclusive air fresheners, and shoppable amenities like luxe hand lotions. Or maybe it’s a Ralph Lauren-branded WeWork office, where workers not only spend their days in the world of Ralph Lauren, but also browse a mini-boutique inside the office? Items, of course, could be delivered same-day; perhaps even under an hour. No matter how the partnership is constructed, the key is to immerse the customer in an elevated experience, and deliver a convenient opportunity to shop.
The luxury sector is seemingly recession-proof, but high-end retailers still need to satisfy their current customers while acquiring new customers. According to the Great Retail Birfurcation study from Deloitte, 52% of high-income consumers choose to shop online, which means that luxury retailers must learn how to extend the bespoke experience to the digital realm—something many luxury brands have been remiss to achieve.
To learn more about how luxury brands are approaching digital transformation, download our e-book, How Luxury Brands Can Solve Their Biggest Challenges.
Catherine is VP of Marketing at Narvar. Prior to joining, she worked for a number of AdTech & MarTech companies including Zeta Global and IgnitionOne, transforming marketing teams into growth catalysts.
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