Is All-Digital the Right Play?
Is there such a thing as going too digital? Today’s customer journey is overwhelmingly characterized by online behavior, there’s no questioning that. But it doesn’t necessarily mean that the allure of shopping in the physical store has completely disappeared.
A recent NY Times article announced that elite luxury brand, Michael C. Fina, will be closing its only physical location on Park Avenue to pursue an online-specific business model. The change also includes a substantial Amazon partnership. It’s a bold step in the brand’s eighty-year legacy, and it does follow the trends of their modern day customer. My reaction to this news is two-fold: A partnership with Amazon is brilliant, and the efficiencies gained will be tremendous. Particularly at a time when Amazon is making a stronger play for the luxury brand experience, the platform may in fact become more appealing to even the most exclusive lux brands. But closing the store entirely – this would keep me awake at night.
Understanding that a significant portion of the Fina brand revenue is now coming from online sales, and the trend seems to be continuing in this direction, there are still questions of the long term wisdom and effects of closing the brick and mortar location. In my own quick audit of the top 50 luxury brands, they all operate a physical brick and mortar store. They all provide a location that facilitates and feeds our aspirational desires – our need to experience and “physically touch a coveted item”. Perhaps it’s a location that you yourself haven’t visited, but one that a friend, aunt, or parent did, and the experience left so much of an impression on them that they just can’t stop talking about it. It’s because the physical location, particularly for a high-end luxury brand, brings the deeper brand dimensions to life. The walk in and smell the fresh flowers, awe at the lighting and touch the texture of the stone on that ring “real life”. There’s a certain cache tied to the luxury brand experience, and the successful brands are the ones who are able to authentically translate that same feel from in-store to digital.
This brings an interesting analogy to mind, equally relevant to marketing and “legacy” type strategies. Five years ago, my gut told me that direct mail was going to make a huge comeback, as I watched the mailbox content get thinner and thinner, and the digital word exploded in adaptation. I knew that due to its effectiveness in reach, engagement and tangible touch that direct mail would have another golden age like it is now, and we are seeing huge returns for our digital clients through direct mail. I see the same for retailers—a coming desire for physical touch and brands manifested in environments to compliment the online journey and purchase behaviors.
Frustratingly for many marketers, the true attribution value of a physical store within the customer journey and purchase decision is difficult to measure, prove or substantiate in hard numbers. Technologies are allowing us to come closer to bridging that gap– and the more we can align off and online interactions, the more intuitive our approach to reaching consumers becomes. But, only time will tell with the ebb and flow of customer journeys, where they go and what they need to make a purchase and repeat purchase. I will be interested to see how this business strategy plays out for Michael C. Fina and others alike.