Retailing & Distribution Case Study - Inside CHANEL's digital strategy
IRENE LAI LXMT745 - OL Prof. Dong Yang FALL 2021
Table of Contents Q : physical stores still relevant for luxury brands?
Q : physical stores still relevant for luxury brands because...
Article : Inside Chanel’s digital strategy
Opportunities
Conclusion
Citation
Even though the digital trend has taken the most advantages in nowadays fashion world, retail stores still hold their place and benefits because some services can not easily be substituted by online alternatives such as sensory experiences in real shops, and the fact that digital distribution comes with physical retail places usually optimizes the commodities and customer services and maximize the profit for businesses, such as the omni-channel for brand promotion and sales, especially in the era of post-pandemic and the transition period of traditional and new technological world in 21th century.
PHYSICAL STORES STILL RELEVANT FOR LUXURY BRANDS?
01.
PHYSICAL STORES STILL RELEVANT FOR LUXURY BRANDS BECAUSE...
Fashion business is always going after the social and cultural trend which have great impact on customer behavior. Besides, target consumer is always the most significant portion in a marketing plan, consequently, it is critical to discuss the trend from different angles of the social issues and status such as COVID 19. According to Business of Fashion, the prestigious press in fashion world, the physical retail is still powerful and inclines for reopening preparation in the post-pandemic era. The
vaccination optimism and the consumers' tendency to go physical shopping, prompt the brands to execute "No Vaccine, No entry" policies, accelerating retailers to launch businesses again. In addition, the revival in post-pandemic period provides more job opportunities for new talents in sales departments because customers prefer the real touch and feel on products and need specialists to assist the selection.
02.
LUXURY realm includes both products and services. Nowadays, the trend in fashion world is moving forward to
digital era for merchandising, sales, supply chain, marketing, production, and so on. Even the blockbuster luxury label Chanel who hold a firm stance on physical boutique stores and customer experience has slightly affected by this digital wave. Due to the reason that more and more online fashion platforms emerge rapidly, and the change in customer behavior, which trickles up from the basic level to the A-list top consumers, those long-lasting luxury brands have begun opening their e-distributions gradually. The reason I choose this article is to have a glimpse inside how the luxury brand Chanel views digitalization in fashion world and the digital environment they have created, to see the opportunities of manipulating both online and traditional distribution.
ARTICLE
INSIDE CHANEL’ S DIGITAL STRATEGY
03.
Being an independent and privately hold company, Chanel has its flexibility on marketing plans. Even though digital trend is popular among fashion communities, Chanel still holds a stance and observe it carefully. Bruno Pavlovsky, the chief of Chanel Fashion states that there is no an intact customer experiences online. Based on his observation, no matter how wonderful they created virtual augmentation on their website, customers are still going back to the physical stores.
INSIDE CHANEL’ S DIGITAL STRATEGY 04.
The evidence to his statement is the performance during the lockdown. Chanel made effort to digital contents for their guests and tried multiple ways to engage potential customers, however, it turned out that consumers prefer physical stores as usual. Thus, e-environment is not the top policy for Chanel at this point. It is not Chanel so adamant to sidestep online business, but because of the brand's long-standing identity and tradition of service that can not easily changed by the new wave of digital technology.
INSIDE CHANEL’ S DIGITAL STRATEGY 05.
The best policy at this point for Chanel is to remain their differentiation strategy in fashion and luxury space, while the ongoing collaboration with Farfetch provides them with the testing experience for creating digital luxury shopping world for the future. Overall, Chanel is willing to keep testing the online platform and trying to figure out the new ways to engage their clients, bringing them the premium quality of shopping experience as shopping inside traditional stores.
INSIDE CHANEL’ S DIGITAL STRATEGY 06.
RESTRUCTURED THE FRAME OF RETAIL STORES
Opportunities
COVID 19 is a temporary period for human beings, however, the essence of luxury brands last for centuries. Brick-and-mortar will rebound because people still desire for the real touch on luxury.
OMNICHANNEL DISTRI BUTIO N From the example of Hugo Boss's success, Chanel can develop the combined distributions from both on and offline to maximize the profit. CUSTOMIZED ONLINE SERVICE
Keep engaging the customers to online services via multiple ways for different niche markets.
07.
Just as Pavlovsky said, pure e-commerce is not an end per se. It is feasible for Chanel to keep testing digital environment based on service-oriented core, and explore the way to develop omnichannel distribution in the complicated markets. The future of luxury is not highly possibly taken over by digitalization at all because brands' DNA and culture still have to be embodied by inperson visit and physical touch, just as the human intelligence could not completely replace our human people. Even though some luxury guests incline to new type of services, they are not completely forget and reject the traditional ways to FEEL luxury.
Conclusion
08.
CITATION LAURE GUILBAULT. (2021, FEBUARY 22). "Inside Chanel’s digital strategy". VOGUE BUSINESS. RETRIEVED SEPTEMBER 13, 2021. https://www.voguebusiness.com/companies/inside-chanels-digital-strategy
VIKRAM ALEXEI KANSARA. (2021, AUGUST20). "No Vaccine, No Entry: The pros and cons for retailers". Business of Fashion. RETRIEVED SEPTEMBER 13, 2021. https://www.businessoffashion.com/briefings/retail/no-vaccine-no-entry-the-pros-and-cons-forretailers