Maximizing Profits With New Digital Direct-To-Consumer Formats

Hollywood has one of the best pricing strategies designed to maximize sales of the same product across various audiences and stages of that product’s lifecycle. If luxury fashion retailers and brands thought about their merchandise in a similar way, greater profits could be realized while also eliminating the excess inventory situations many retailers find themselves in today. By controlling their own direct-to-consumer (DTC) e-commerce channel, retailers and brands can more closely mirror the excitement found in brick-and-mortar stores, maximize the integrity of their brand equity, and offer bespoke experiences to different consumer segments designed to get the most out of that product at each stage of the product’s lifecycle.

Brick-and-mortar stores traditionally have enjoyed somewhat of an advantage over online retail in terms of their ability to segment customer access to merchandise for different reasons while simultaneously creating engaging experiences throughout the season. For instance, early access to a specific designer’s collection may be determined by sales associates who count high spenders or brand loyalists among their client list. Special collection pop-ups might launch with a huge in-store VIP event and then continue to drive traffic and sales throughout the season with unique merchandise assortments.

Fortunately, because of the advances in technology, temporary DTC luxury experiences can live alongside its primary e-commerce site. They can be created quickly, stocked with merchandise edited for a specific target audience, and then vanish. Elevating the DTC e-commerce experience to transcend the merely transactional will be the next frontier in luxury retail. By purposely curating elevated digital experiences, luxury brands can make their digital DTC channels just as important as their flagship stores in Paris, London, or New York.

Here are just a few ways that brands and retailers can maximize sales and inventory while amplifying the digital DTC experience

· Seasonal Preview or Trunk Shows for best, highest spending customers—basically this is a way to generate sales and create buzz before the selling season starts. By offering a designer’s very best, most loyal customers early access to the collection, the designer is guaranteed to sell out of some of the most editorial merchandise before the merchandise even hits the selling floor. In store, these are high-touch events requiring in-store appointments. With a global digital pre-sale opportunity, select VIP customers can be given a private collection showing and still receive elevated service and even designer access regardless of physical location, creating world-wide excitement and full price sales early in the season.

· Pop Ups—exciting temporary stores can be created for an exclusive by-invitation-only DTC digital audience for sneaker drops or other one-of-a-kind merchandise. A luxury brand’s sneaker consumer can be very different from its ready-to-wear consumer, so creating a temporary store just for this high spending consumer will pay off with greater brand engagement on a global scale. By adding gamification, or offering virtual products alongside physical ones, a truly exciting digital event can be created which would be impossible to replicate in a physical store.

· Influencer-Curated Shop—influencer partnerships have become a much bigger part of retailers’ and brands’ marketing budgets, but often don’t prove measurable returns on investment. By allowing the influencer not only to curate the shop but also to grant access only to their followers, a DTC brand can create an engaging digital experience that easily transcends that of a physical one. Since these shops are private, only accessible to the influencer’s invited list, they eliminate the need for clumsy promo codes at checkout, while also offering exclusive access to a select global community. Heighten the excitement by adding live selling by the influencer and that brand’s influencer marketing strategy will start to deliver a real return on investment. Multiple shops can exist simultaneously—and temporarily—for different influencers and unique audiences.

· End of Season Sale—create a digital store simply for sale merchandise, consolidating it all online to generate greater sales through a larger audience. Brands can also use the end of season sale to generate greater engagement and higher margins with early access to consumers who register with their emails—giving brands a viable new customer acquisition tool. We know that consumers happily give up personal details, such as their email address, for something exciting in return—in this case, that would be exclusive early access to discounted luxury merchandise. Brands can use this tactic to create a much more exciting and successful sale event than that which exists in their stores.

Creativity online has no limits now. The technology to quickly and cost efficiently create bespoke temporary digital spaces gives luxury brands myriad opportunities to optimize sales across multiple touchpoints while enhancing brand equity and consumer engagement.