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The luxury of time—Digitally enhanced experiences in an analog industry

How can we redesign the luxury shopping experience to adapt to the needs of current and future customers?
Ben Sheppard

Leads McKinsey & Company’s Product Development and Design practices in the United Kingdom. Advises clients on developing bold, creative and profitable products. Founded the London Design-to-Value lab

Works on a wide-range of interdisciplinary projects for McKinsey including consumer products and healthcare.

Works at the intersection of psychology, emerging technology and design. She creates interdisciplinary R&D, Innovation and Skunkworks teams and labs for organizations that want to experiment, think forward and invent the future.

The times they are a changin'

Life is short, buy the dress. We all have those treat yourself moments and in luxury, customer experience is paramount. Successful brands invest heavily in sumptuous billboard ads, glamorous shops in the most fashionable areas, attentive salespeople and increasingly, a stylish online presence.

Luxury shoppers want to feel special from the moment they hear about a product to every time they encounter it again. Many luxury brands are getting the sales experience right; however, when the excitement of the purchase has subsided, the after-sales support can feel lackluster.

To make these customers feel special, luxury firms must first understand their consumer: luxury shoppers are younger, more digitally savvy, and are relying more heavily on mobile channels than ever before. The typical luxury shopper now has a mixture of online and offline interactions with the brand, seeks advice from peers on social media or looks for suggestions from trusted bloggers before entering a store. Of course, an Instagram post surely follows a purchase.

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Despite the increasing prominence of digital and mobile, few luxury brands have successfully integrated these channels into their post-sale customer experience. It’s easy to throw around “mobile” and “digital” buzzwords, but what should it look like in practice? How might luxury brands use these channels to create a truly exceptional customer experience? Join us for the real, recent journey of one luxury customer. We will identify their pain points and provide food for thought for how digital interventions might help.

Story 1: The journey of today

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Steven wakes up one morning to find that his USD 15,000 watch has failed to keep the time for the third night in a row. Looking up the watchmaker online, he realizes that he’ll have to leave work early to make it to their only shop in London before it closes at 6:00 pm.

He tears himself away at 5:15 pm and makes the voyage across the city, planning to drop off the watch and then spend some time browsing.

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Upon arrival, he’s asked to fill out a lengthy form with the same details he gave the shop when he was there the last time, to buy the watch.

It takes 20 minutes to book the watch in. Steven isn’t in the mood to appreciate the shop’s interior or to examine other watches, he just wants to move on with his evening.

He asks the sales assistant when he can expect to have his watch back and how much the work will cost. The salesperson doesn’t know, but tells him to expect an e-mail in the next few weeks. Steven leaves and tweets his disappointment later that evening. There is no response from the brand.

Two weeks later, Steven receives a standardized e-mail: his watch has arrived in Switzerland, and the assessment will take four to six weeks. This is his first notification of a time frame, and it’s much longer than he was expecting.

After six weeks with no contact from the watchmaker, Steven is informed through another e-mail that the repairs will cost USD 1,500 and will take a further 14 weeks. He is given the option of having his strap replaced for an additional USD 300. Steven gives his approval for the repairs and strap replacement.

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Another eight weeks pass with no update from the watchmaker. Finally, an email arrives: Steven’s watch is available for collection at the shop. He leaves work early once again to make it to the shop.

A new salesperson hands him his watch and informs him that although his watch is ready, the new strap will, in fact, take another six weeks. Steven takes the watch and leaves.

Steven has a glass of wine with a friend that evening. She admires the watch and says that she was thinking about getting one herself. Steven says that he loves the watch but hates the service and advises her not to buy one.

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The next week, another e-mail tells him that the strap has arrived. If he’d been told that the strap would be ready in a week, he’d have delayed picking up the watch. Instead, he must leave work early for the third time.

Steven is uninterested in looking around the shop and is too irritated to appreciate the knowledge and professionalism of the customer service representative.

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With the strap fitted, Steven leaves the shop for what he hopes is the last time. On his way out, he uploads a negative post on Instagram and tags the watchmaker. He’s glad that the “experience” is finally over.

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Story 2: The journey of tomorrow

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Steven wakes up one morning to find that his USD 15,000 watch has failed to keep time for the third night in a row. He opens the watchmaker’s mobile site, quickly snaps a picture of the back of his watch and waits a few seconds while his records are found.

The site gives Steven two options: have an Uber Lux take him to the shop today or book a courier from his office at his convenience. He selects the latter and keeps working. The courier arrives, collects the watch and is off in under two minutes.

Steven gets a notification later that evening.

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His London customer service representative has left him a video message. Holding Steven’s watch up to the screen, the representative lets him know that it has arrived safely and that it will need to be sent to their Swiss repair facility for assessment.

Steven taps “accept” and is taken to a journey page which shows the estimated dates of each repair step, up until the moment his watch will be returned. Over the next day, Steven tracks the watch as it moves toward Switzerland.

While the watch is in transit, the representative sends Steven images he thinks may be of interest from the company’s archive: the first hand-drawn design of the watch, a photo of the watchmaker experimenting with dials and the first image of the prototype ever being worn.

Two weeks later, Steven receives another video message – this time from a Swiss repair technician. The message includes clips of the watch’s intricate mechanism. Steven can approve a list of suggested repairs or have a video call with a technician to talk him through the work. He opts for the call.

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The technician appears on the screen and explains the mechanics of the watch as he covers the repairs. During the discussion, he offers Steven a series of upgrades: a silicon mainspring which wasn’t available when the watch was made; an anti-reflective coating; and Steven’s initials engraved on the flywheel.

Steven gives the go-ahead for the repair works and mainspring upgrade, for a total of USD 3,200. For the watchmaker, this additional fee allows them to cover the cost of the service and to offer some “free” extras to leave a positive, lasting impression. Later that evening, Steven praises the service during a drink with his friend.

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Steven follows the rest of the repairs through the journey page, which updates regularly with time-lapse repair videos. Once the repairs are complete, a video icon takes Steven to a two-minute video, showcasing the most interesting parts of the repair process, with a personal message from the technician.

One week later, Steven receives a video message from the same customer care representative: the watch is ready. This time, Steven decides to come into the shop. An Uber Lux collects him from work.

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The representative is waiting with a cup of tea and Steven’s watch. The representative tells him that the strap has been replaced for free. Steven looks around the shop and begins to think about purchasing a watch for his daughter.

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The time is now

Steven’s subpar experience in “the journey of today” is not unusual even in 2018 [See Exhibit 1]. However, does Steven’s post-sale experience really matter to the watchmaker?

Nobel laureate Dr. Daniel Kahneman and Professor Barbara Fredrickson might argue: “More than you’d expect.” In 1993, they proposed and tested the “peak-end rule,” which holds that people judge an experience based primarily on how they felt at two key points: the most intense period (the “peak”), and the “end.”

The post-sale experience is the “end” of the customer journey; and the key to driving higher customer loyalty and increased recurring revenue. As the example above illustrates, digital interactions can enhance (rather than replace) the traditional “analog” engagement model and improve customer experience without introducing disproportionate new costs.

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Some companies have already started paving the way; Hublot and Jaeger-LeCoultre have launched digital service portals with preliminary fault identification and price estimates based on a serial number. Hublot is encouraging customers to adopt this feature by offering a one-year warranty extension to those who have downloaded their app.

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Beyond watches, there are many indications of a digital future for luxury retailers. Toplife, a Chinese invite-only luxury platform, has launched “JD Luxury Express”, which uses specially trained, well-dressed couriers to deliver goods via electric vehicles, within 24 hours. British fashion retailer Burberry offers “Burberry Bespoke”, a digital tool allowing users to customize every aspect of their trench coat. French conglomerate LVMH, which owns brands including Dior and Louis Vuitton, has launched “La Maison des Startups”, an incubator which aims to incorporate digital services into LMVH brands. An early idea is the use of visual recognition technology to customize clothing.

However, most senior leaders of luxury companies we have spoken to believe digital augmentation of the customer journey remains an area of strategic weakness, with substantial improvement required over the next two years. Today, the digital augmentation of luxury experiences has the potential to delight customers and distinguish brands. But by 2020, luxury leaders believe that digital will be the new normal; the question will not be whether luxury executives should invest in digital, but how they can distinguish their digital offering from their competitors. Beginning the process can be daunting, but for luxury brands looking to realize the potential of digital interventions, we recommend selecting a single product segment and/or store for one major city, and pilot with these three steps:

  1. Map out the current end-to-end customer journey, based on customer feeling. Ensure that the map covers the full journey; for “hard” luxury goods like watches, jewelry and long-life fashion, this includes any servicing, repair, or upgrading after the initial sale. Pay attention to the peaks and troughs, as well as points which constitute the “end” of an experience.
  2. Create a long-list of digital interventions at each point of the customer journey. Evaluate the case for each intervention in terms of ease of implementation, net cost (considering revenue generation), and impact on the customer experience. Select a shortlist of interventions and re-map the end-to-end customer journey [See Exhibit 3].
  3. Refine the new journey: iterate your chosen digital interventions to soften troughs, boost peaks, and ensure that the end is something that will leave customers feeling truly special.
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