Making The Most Out Of Infrequent Luxury Customers (RCD Ep8)

L-R clockwise. Leon Bailey-Green (editor, Upper Clash), Stelios Pardalakis (founder, Stellar Search), Nikolay Piriankov (ceo, Taylor & Hart), Adam Knight (co-founder, Tong), Nick Moutter (founder, Olivia’s), Ceanne Fernandes-Wong (ceo & co-founder, Cocoon), David Lockwood (co-founder, The Tapestry Agency).

RETAIL COMMERCE DISCUSSION, Episode 8
Making The Most Out Of
Infrequent Luxury Customers

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SYNOPSIS

In this episode we hear from digital first luxury brand founders about frequency of purchase. Unlike food and cosmetics, which need regular replenishment, and fashion, which is trend driven, selling items like furniture, appliances and jewellery often means long gaps between purchases.

Cocoon, Olivia’s and Taylor & Hart are three luxury businesses tackling this retail quirk in different ways.

Cocoon is turning that infrequent purchaser of luxury handbags into a regular customer by providing the opportunity to rent bags for a monthly subscription fee. Most members are changing their bags monthly, but Ceanne Fernandes-Wong, the company’s co-founder, expected to have a bigger base swapping weekly however “that’s probably changed because of the world we’re living in right now” she said.

It’s twelve months in for luxury homeware and furniture start-up Olivia’s. Founder Nick Moutter said providing great customer service on lower price point accessory items – lamps, mirrors and vases – gives customers confidence to choose the company when they have a need for higher value furniture.

For Taylor & Hart the typical lifetime customer journey involves two purchases – an engagement ring, and a wedding ring. Founder Nikolay Piriankov says now is the time for the business to consider areas of expansion to maximise customer lifetime value – from range extension to creating a wedding related platform.

Nick and Nikolay were joined by Stelios Pardalakis, David Lockwood and Adam Knight for this discussion hosted by Upper Clash director and editor Leon Bailey-Green, who later spoke with Ceanne.

Stelios, from marketing agency Stellar Search, said campaign measurement metrics can be misleading when looked at in isolation.

David, from consumer analytics consultancy The Tapestry Agency, offered advice on how brands selling infrequently bought items should use data to make customer marketing decisions.

Adam, from China market agency Tong, revealed consumer credit is one of the tactics being used in China to encourage consumers to buy, and buy more frequently.

VIDEOS

Scroll down for the long edit.

How credit and renting open luxury to new consumers – 2 Minutes 24 Seconds.

Chinese consumers are getting into the credit habit, says Adam. Ceanne explains how her subscription model drives customers to tap into luxury earlier in their financial lifecycle. Nick reveals average order value differences for purchases customers make with buy now pay later provider Klarna.

Using range extension to stay front of mind – 1 Minute 33 Seconds.

Although range extension might drive down order value it keeps customers engaged for future big purchases says David. Nikolay discusses the potential for his brand to provide adjacent products and services. Nick says home accessories form the bulk of his company’s sales.

Using data to understand who customers really are – 3 Minutes 17 Seconds.

David explains how appending data can be especially useful to businesses selling infrequently purchased products. Nikolay explains how his brand’s warranty scheme provided data which showed which marketing channels were really working. Stelios warns against looking at CPA in isolation.

Creating content that drives engagement (and sales) – 1 Minute 30 Seconds.

Nick warns against constant ‘badgering’ of consumers with buy now emails, David agrees saying it’s better to remind customers why they made a great decision buying from a brand. Nikolay says pushing customer stories gives his brand ‘trust and humanity’.

Soliciting feedback and utilising customer reviews – 1 Minute 24 Seconds.

David wonders why brands seldom ask customers for product feedback after six months – explaining it’s a good way to keep up continued engagement. Stelios advises using reviews on social channels, recommending brands use tools like Yotpo to manage review content.

Encouraging loyalty for repeat purchases – 2 Minutes 17 Seconds.

“Loyalty isn’t something Chinese consumers have in significant droves” explains Adam. David offers advice for being remembered when customers have a need. Ceanne reveals the regularity with which members of her subscription business are swapping luxury handbags. Nick says providing great customer service on lower price point items encourages loyalty when the customer has a need for higher price point products.

Servicing luxury products – 1 Minute 23 Seconds.

Ceanne explains the operational challenge of servicing the handbags her members are renting. Nikolay discusses his brand’s lifetime warranty and how it expanded their customer database.

Profitability on first purchase – 1 Minute 5 Seconds.

Nick and Nikolay discuss first purchase profitability. Stelios says a multitude of metrics should be used to determine which marketing channels are contributing to driving profit.

The Long Edit – 23 Minutes 58 Seconds

In this episode we hear from digital first luxury brand founders about frequency of purchase.