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In the fourth episode of the Vogue Business and Scalefast master class on how to succeed in direct-to-consumer luxury, Nicolas Stehle joins Vogue Business head of advisory Anusha Couttigane to explore how luxury brands can leverage different e-commerce tools to create clearly defined luxury experiences that are unique and product-specific.
Stehle begins by explaining that Scalefast launched eight years ago with the purpose of providing brands with a way to quickly reach their core fans through DTC e-commerce. Although the business started with the entertainment sector, it swiftly moved into cosmetics, luxury and other consumer packaged goods categories. Stehle says the behaviour of “core fans” is similar in every sector, and the priority is to meet their needs, regardless of the touchpoint.
“E-commerce is very complex. You need a retail infrastructure. You need an infrastructure to manage the payments, antifraud, the delivery of your products, the customer support, IT — and you need that not only in one country but at least in two or three continents if you are a global brand,” explains Stehle. Scalefast, therefore, developed a holistic package with 22 steps that brands can use to quickly scale their e-commerce capabilities.
This type of frenzied activity has been characteristic of the pandemic, as brands rapidly pivoted to digital solutions to compensate for store closures during lockdown. The first lesson of the pandemic, Stehle says, is that it has forced companies to think outside the box about how they were going to reach customers. The second lesson is that you don't destroy products anymore. In luxury, the goal is to create scarcity, meaning that ten years ago, brands were more likely to destroy excess products to limit their availability. New e-commerce tools are enabling brands to find more sustainable ways of managing their unsold stock.
With Kering, for example, Scalefast has created dedicated private sales sites for employees, their friends and families, with special digital events offering limited products under restricted access. This has helped to maintain the connection between the brands and the employees during lockdown. “Employees are your biggest core fans. So, you create something unique for them. They have a unique experience… And for Kering brands, it gives them the opportunity to manage their unsold products."
Outside of luxury, Stehle cites Nike as a brand that has impressed him during the pandemic for continuing to evolve the customer experience in the midst of turmoil. He stresses that if this can be achieved by a brand selling “standard shoes”, then the bar for luxury should be much higher.
In cosmetics, Scalefast has been working with L’Oréal on an initiative called the “Art of Gifting”, which enables them to personalise products through engraving and elevate the packaging to special gift wrap, delivering a wrap-around service through e-commerce that wouldn't be available to the typical L’Oréal shopper in Sephora.
Stehle attributes the luxury world's hesitation to engage with e-commerce to the early beginnings of online sales, which centred on “killing price” and offering things as cheaply as possible, resulting in an association with discounts that is hard to shake. Compounded by the mass access nature of e-commerce, it has created tension in the luxury sector, which seeks to protect exclusivity.
Tailoring the experience for the brand is therefore essential. “In e-commerce, one size does not fit all,” he says. The Nike model does not work for luxury. “A company like Chanel will never sell all of its products online. I don't believe that's the experience they want to provide to their clients.” In spite of the demand for online-to-offline pathways, such as click and collect, Stehle believes that customers go to luxury stores for a reason and that convenience alone is not a good enough objective when it comes to taking brands online.
The must-have status of some luxury products means some brands have the power to break the internet. Stehle references moments when sites have crashed due to the popularity of new releases. As enviable as this problem might be, it is not necessarily the experience a luxury brand wants to deliver. Moreover, elements such as packaging and delivery are even more important for high profile products, making it necessary for brands to integrate retail features with spin-off sites for capsule collections and flash events. In this space, Scalefast helps to maintain the consistency of service shoppers expect from their favourite brands, even when the normal infrastructure is not fully accessible.
Looking to the future, Stehle expects the e-commerce landscape to keep evolving. He believes the key to success is providing different experiences for different products and customer targets. “It's like movies — you start with having the movie in the theatre, and then you have it on Blu-ray and then on digital download. Product follows the same type of cycle. You want to have different experiences for different steps of the product life.” E-commerce, he says, will be key to creating these differentiated experiences.
To conclude the five-episode Vogue Business and Scalefast master class series, we will publish a free, comprehensive report. Register here to receive the full report.