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Service Innovation in luxury retail
The document discusses the challenges and strategies for luxury retail brands operating in emerging markets, particularly focusing on the Indian luxury customer and their unique buying behaviors. It outlines various innovative service offerings aimed at enhancing customer engagement, such as beauty workshops and at-home beauty services, and emphasizes the importance of collaborative design in retail service processes. Additionally, it highlights how brands can adapt to local cultural trends while addressing the barriers of low brand awareness and customer recruitment.
Service Innovation in luxury retail
- 1. SONALI GOGIA Service Innova,on in Luxury Retail Prepared by Sonali Gogia sonaligogia@gmail.com, @sonali_gogia June 2013, Mumbai
- 2. GLOBAL BRAND CHALLENGES Adap@ng or crea@ng new services in emerging markets can be challenging as: ─ Global brands need to strike a balance between adapta,on and brand heritage ─ The global team needs to work in collobora,on with the local Brand team ─ The talent gap in Luxury segments effects service nega,vely ─ Customer understanding and mapping is low ─ Customer evolu,on is rapid and loyaly is low ─ Compe,tors are adop,ng new innova,ve routes ─ Coordina,ng across func,ons and countries can be complex ─ Usually in new markets Brands lack scale and resources to make huge investments © 2013 Sonali Gogia
- 3. INDIAN LUXURY CUSTOMER Highlight key features of the Indian Luxury Customer and their buying behaviour in the Beauty Segment ─ Prefer shopping in Bou$ques versus departments stores ─ Need orienta$on to evolved beauty products and usage ─ Take $me to adopt sophis,cated regimes like serums and eye creams ─ Have low brand awareness and loyalty and use a mix basket of brands ─ Service differen$a$on plays a larger role in a rela,onship driven Culture ─ Luxury Customers usually indulge in weekday ladies lunches and social events ─ View make up as occasional wear versus daily wear ─ Culturally, in big ci,es having everything delivered home is a norm ─ Preference for tradi,onal, natural and at home beauty remedies ─ Have beau$cians come home to provide rou,ne services ─ Appreciate and expect massages and pampering © 2013 Sonali Gogia
- 4. INNOVATIVE LUXURY SERVICES Lack of scale, @me and resources can oNen limit a Brand’s ability to develop India specific products, so Brands can turn to small scale and local Service innova@on Beauty Workshop Luxury Bride Interac$ve Educa$on Beauty Party Facial at home
- 5. ACTOR MAPS These are the usual set of stakeholders in the back and front end that are involved in the retail service design process Retail Team Marketing Customers Brand Zone Training Service Experience Retail Partners Merchandiser Supply Chain Finance Legal IT © 2013 Sonali Gogia
- 6. CODESIGN FOR SUCCESS The process of design in a retail enviornment requires all actors to work together © 2013 Sonali Gogia
- 7. SERVICE DELIVERY APPROACH In a new and complex Retail environment, test innova@on before inves@ng in full service rollout 1. Service Design & Tools are ready 5. Adapt Service and full roll out 4. Staff and Customer Feedback © 2013 Sonali Gogia 2. Pilot test – in one store or a city 3. Measure results and KPIs
- 8. INNOVATION EXAMPLE 1 : BEAUTY WORKSHOP To build brand awareness and provide educa@on conduct Luxurious beauty workshops NEW SERVICE APPROACH CHALLENGE Customer recruitment Poten,al Customers had low beauty knowledge They felt in,mated to enter the Luxury stores Low awareness of complimentrary services we offered © 2013 Sonali Gogia Collobora$ve design Brainstorming with retail team on Customer needs Compe,,on benchmarking Codesign with other stakeholders – Retail partners and women’s publica,ons A pilot workshop Developed a beauty workshop partnering with a women’s publica,on customer base Offered a express version of our instore experience to service 200 women a day Completed the experience with a luxury venue, educa,on, sensorial pleasures
- 9. INNOVATION EXAMPLE 2 : INTERACTIVE EDUCATION Increase engagement by using Ipad’s to consult and educate Customers NEW SERVICE APPROACH CHALLENGE Customer engagement Customer’s are unaware of high tech skincare like serums and make up applica,on techniques Beauty advsiors find it difficut to engage customers for long and explain complex scien,fic terms © 2013 Sonali Gogia Observa$on for insight Observed different Customer scenarios in store Used mystery audits for insights Involved beauty advisors in brainstorming Selected one bou,que for pilot Technology for educa$on Use an ipad at every point of sale as a tool of engagement and educa,on Revise service protocol to integrated new tool Train the Retail team on usage, care
- 10. INNOVATION EXAMPLE 3 : BEAUTY PARTY Taking the Brand experience home with a personal touch in low season NEW SERVICE APPROACH CHALLENGE The low season Every monsoon Luxury Customer fooaalls drop Beauty Advisors complain Customer’s don’t turn up for events or replenishments, and sales are low © 2013 Sonali Gogia BoMom up design The instore staff suggested an at home service Marke,ng team created a mobile beauty party concept Conducted role palys and dry runs to create a smooth professional event concept The beauty tea party Beauty Advisors (BAs) deliver products to Customers. They provide beauty services, take testers and samples for trial Plan Brand style tea par,es at Customer’s homes, offering complimentary beauty services and trials
- 11. INNOVATION EXAMPLE 4 : FACIAL AT HOME Start Luxury home facial service to cater to the cultural beauty trends NEW SERVICE APPROACH CHALLENGE At home culture Doing beauty rituals at home and long massages are part of Indian culture The global 15 minute in store massage was too quick for customers © 2013 Sonali Gogia Colloborate across con$nents Research if the brand had similar trend in other countries Set up a cross country team to develop a solu,on Created customer journey maps to simulate a new at home flow Involve user in developing and do actually dry runs in their homes Home beauty service We launched a mobile facial service offering longer facial. Adapted several instore touchpoints to recreate the experience at home Set up a separate team who were trained by interna,onal brand experts
- 12. INNOVATION EXAMPLE 5 : LUXURY BRIDE Create a Luxurious and pampering Bridal Service to tap the great Indian wedding season NEW SERVICE CHALLENGE APPROACH Missing Bride An Industry es,mated at over 20$ billion, the Indian bride will spend anything to look her best Brides don’t associate with the Brand – we need to bridge the gap © 2013 Sonali Gogia Wedding ecosystem Included more stakeholders in the development process – beauty stylists, make up ar,sts, fashion designers to understand the full Bridal ecosystem of needs Compe,,on benchmarking Brainstorming with internal team across func,ons The wedding collec$on We put together a signature wedding collec,on based on India Bridal shades Designed a trousseau vanity box as a touchpoint Offered exclusive Bridal make up services that included offers for other family members
- 13. THANK YOU Prepared by Sonali Gogia sonaligogia@gmail.com, @sonali_gogia June 2013, Mumbai