Chanel Says Yes to Digitalisation

Léa Pelard reports on the French luxury brand Chanel’s collaboration with e-commerce giant Farfetch to revitalise their customers’ in-store experience.

Pull quote : “We strongly believe that digital will never replace the feeling of being in a fitting room and trying on a Chanel piece,”  Pavlovsky said in a statement.

As Coco Chanel used to say, “In order to be irreplaceable, one must always be different”.

Visionary, trendy, elegant, chic, timeless… just some of the many ways to define Chanel’s style and impact on the fashion world. One certainty remains though, the iconic French luxury house is constantly reinventing its collections and thinking outside the box to offer unique experiences.  

Chanel recently signed a 5 year contract with the global e-commerce platform Farfetch, willing to personalize customers in-store experience with the help of new digital tools. Technologies in question include smartphone applications, allowing customers to indicate their sizes and preferences online before going to stores. It implies that assistants will be able to cater customers needs, and also help them to locate items spotted in magazines. We could also see artificial intelligent chatbots deployed to connect with Chanel’s customers.

“We are confident that Farfetch’s innovative technology will help us develop an even more outstanding customer journey by combining a great e-service offering with a genuine Chanel boutique experience,” said Chanel President of Fashion Bruno Pavlovsky in a statement.

This strategic partnership aims to reshape Chanel’s luxury retail experience as well as better target millennial consumers, the young generation from 18 to 35 years old.

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Chanel corner in Brown Thomas, luxury store in Dublin

It is no secret that luxury markets are in the center of an important demographic transition. The continued growth of millennials as luxury consumers proves it. Millennials already represent 30% of luxury buyers, a number that is speculated to rise to 45% by 2025 according to the global management consultancy Bain & Co.

With a third of luxury customers coming from younger generations, it is important for brands to adapt their strategy and use accurate and efficient marketing tools. Chanel fully understands that millennials like to interact with brands across different digital platforms and value experiences and unique concepts. This is why setting up an application would allow customers to engage with Chanel from home, and also live a unique experience once they come to the store.

 Even if the luxury house is taking a big step in the digital area, selling the ready to wear and handbags collections online is still not an option. Chanel decided to commercialized its perfumes, beauty products and eyewear online a few years ago, but wants to maintain the exclusivity of its fashion collections in stores.

Along with Chanel, other luxury houses such as Dior and Jean Paul Gaultier prefer to develop digital experiences helping customers and providing them the trendiest and newest in store services than commercializing their ready to wear collections online. Their strategy is based on the assumption that their creations wouldn’t be as exclusive and luxurious as they are if they were accessible to anyone.

“We strongly believe that digital will never replace the feeling of being in a fitting room and trying on a Chanel piece,”  Pavlovsky said in a statement.

Some luxury fashion brands overcame their concerns about exclusivity and control and are now more comfortable on selling their luxury products on their own site.

Moschino and Burberry, respectively Italian and British luxury brands, both commercialize their ready to wear collections online while maintaining their high standing and exclusive image. Burberry is seen as a leader in e-commerce with its success spanning across various channels.

Why did we see a rise of luxury brands changing their strategy and deciding to sell their collections online? As online sales for luxury fashion keep rising, so too do their profits.

In 2015, global digital sales for women’s luxury fashion was representing 3% of the total online clothing market. In 2017, it rose to 7%, and it is expected to reach 17% by 2018 with Western and particularly Chinese markets leading the way.

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According to Bain & Co, 32% of global luxury buyers are Chinese, 24% American and 18% European.

With billions of euros at stake, Chanel’s digital strategy is set to evolve the in the coming years. The French couture house is becoming more and more digitalised, one step after another. By signing a 5 years contract with a global online platform, Chanel may shift into a multichannel brand, and take advantage of the rise of online sales for luxury fashion.

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