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Luxury eCommerce: How Product Configurator Software Boosts Luxury Sales
For many luxury brands, their names speak for themselves. The likes of Porsche, Hermes, Louis Vuitton, Ferrari, and Chanel have a certain appeal about them that has been passed down for generations. However, there’s always room for more players that can differentiate themselves in multiple ways, especially when targeting different audiences.
Yet, defining what makes a brand luxurious is continuously up for debate. Usually, it comes down to the price of the products they provide, the quality of the product and its history, how scarce it is compared to other more commoditized products, and the overall customer experience.
Many luxury brands have doubled down on the customer experience as eCommerce has grown. They’ve also sought out ways to differentiate themselves as customers become even more specific about the things they want. In this article, we’ll outline how customization has continued to grow and how luxury eCommerce brands can use product configuration software to increase sales.
A Look At the Future of the Retail Luxury Goods and Jewelry Industry
According to Allied Market Research, the global luxury jewelry industry market size had an estimated value of $21,751.6 million in 2021 and is expected to reach $40,190.07 million by 2031, with a CAGR of 6.4% from 2022-2031. Let's take a closer look at the trends in the industry.
Continuous Growth in Online sales
As omnichannel sales have taken over the world of commerce, more and more luxury sales are being conducted online, which could significantly impact brick-and-mortar store sales as time goes by.
Luxury online sales experienced an increase of 24% in 2017, and 9% of worldwide luxury goods sales were done online and are expected to reach 25% by 2025.
Millennials Driving Growth and Redefining the Luxury Market
As Millennials (Gen Y) and Gen Z customers raise expectations and are proving to be the main drivers of growth in the luxury market, accounting for 30% of luxury sales but driving a staggering 85% of growth in 2017. However, younger generations are also changing the definition of "luxury," which means that companies have to adopt different strategic approaches to appeal to customers.
The millennial generation possesses different ideals than previous generations, who used the acquisition of luxury goods to demonstrate social status, class, and accomplishments. Such accomplishments don't matter as much to the Millenials and Gen Z generation. To them, luxury goods are more about defining who they are and self-expression.
For instance, to appeal to younger customers, premium clothing companies like Gucci are reinterpreting streetwear and even working with streetwear companies and artists.
Increasing Demand for Men's Jewelry
Usually, women are more driven to purchase luxury jewelry than men. But this trend is beginning to change due to the increasing focus of men on self-grooming and aesthetic appeal. Also, social media has significantly influenced men's adoption of the latest fashion trends. There is now an increasing demand for men's luxury products like bracelets, rings, necklaces, and more. Therefore, companies are now shifting their focus towards manufacturing these products to have an edge in the market.
Growth of Personalization and Customization
Enhancing the customer experience is a significant concern for any luxury brand. For years, personalization focused on simply adding an engraving to a particular product before it was ready to be purchased. However, with access to even more customer data, brands are on the lookout for ways to leverage that data for their benefit and the benefit of the customer.
Today, the luxury goods market generates roughly $321B in revenue. Customers in this market have identified personalization and customization as a few ways that luxury brands can get them to open their wallets. According to a Boston Consulting Group report, one in five luxury buyers indicated that the ability to customize their products was relevant to them when making purchases.
The customization level that customers crave doesn’t just stop at engravings or picking from one of several product colors just like everyone else. As the target demographics for luxury goods begin to shift to millennials and gen Zs, brands need to incorporate made-to-order customization for as many products as possible. One way to achieve this — especially in this digital age driven by eCommerce— is with a product configurator’s help.
Benefits of Product Configurator Software in the Luxury Industry
Product configuration software can yield several benefits for brands. Here are just a few of the benefits for the luxury eCommerce industry in particular:
Enhance Luxury Buying Experience
The buying experience and attention to detail are how most luxury brands have differentiated themselves from others. However, eCommerce has leveled the playing field in many aspects since shoppers can no longer compare the quality of the in-store experience.
However, with a product configurator that allows them to customize products precisely to their liking, customers can still receive a tailored experience that caters to their exact needs.
Having to wait extra time for a customized order is nothing new, with many luxury brands relying on waitlists to promote desire and other emotions in their customers. With a product configurator, these brands can further incentivize their customers to wait on delivery since the products need to be customized.
In an eCommerce environment where instant gratification and delivery are the norms, promoting a made-to-order dynamic enables brands to spend less time holding inventory without losing their customers’ faith. Brands gain real-time feedback from their customers and adjust their stock levels and marketing to accommodate customer demands.
Increased Customer Loyalty
Product configurators can improve customer loyalty for luxury brands by enhancing the buying experience and customer satisfaction. As customers can adjust products to their liking, they can rest assured that a brand understands their unique wants and needs.
Adapt to Customer Lifestyle
Millennials remain some of the biggest consumers of luxury goods. And while trends heavily influence their buying habits, a product configurator enables them to create a certain level of personalization and uniqueness for any items they purchase.
Exclusivity is a vital characteristic of any luxury brand, and product configurator software can encourage even more exclusivity. With customers able to create one-of-a-kind items, the added rarity and scarcity of these items can potentially increase value, reflecting positively on the brand and the customer.
Deliver Unique Personalized Experiences in the Omnichannel World of Luxury
Since customers are more likely to feel more satisfied with a purchase when they have the opportunity to customize products online to suit their taste, the need for a 3D product configurator can not be overemphasized.
As most luxury and jewelry companies like Tiffany & Co and Bvlgari now sell products online, a 3D product configurator is needed to enable customers to make personalized decisions during purchase, rather than going to a physical luxury store.
Fewer Product Returns
In many cases, customers tend to return products when they are spoiled, broken, or don’t meet expectations. For instance, if the name on a personally customized jewelry is spelled incorrectly, the chances of the customer making a return is high.
With a real-time photo-realistic 3D configurator, the rate of product returns will be reduced significantly, as customers can view products from all angles and uniquely configure each product to their satisfaction.
A 3D product configurator enables customers to manage products in real-time as they customize. They can manage prices while they customize a product, that way, managing expenses and going for what they can afford.
Luxury eCommerce Product Configurator Use Cases
Product configurator software can be used in a variety of ways to help luxury brands personalize the customer experience.
Whether placing an engraving on the back of a necklace or inside a ring, jewelry customization is a personal statement for many buyers. However, it can be difficult to truly fall in love with a product if they can’t see what the final product might look like.
With the help of a product configurator, brands can offer custom jewelry options that provide a 360-degree view of the item. This enables customers to see the product from multiple angles and envision how it will look when they wear it - whether it’s a simple engraving or embedding a precious stone.
Thanks to eCommerce and global supply chains, there are hundreds of watch brands available. Many of these brands rely on social media to showcase the quality of their items and encourage customers to make purchases. By using a product configurator, luxury brands can take their watches to the next level, enabling customers to adjust bezels, and straps, include engravings, and more to enhance the experience.
From handbags to shoes, customers enjoy having access to these luxury items. With a product configurator, they can adjust the color and style of each product, allowing them to create unique combinations that match their style.
Product configuration software can help brands take a once ordinary phone case and personalize it for the customers. Sunglasses and other accessories can also be modified with the help of a configurator.
Enhancing Customization With a 3D Product Configurator
Product configuration software can help luxury brands increase conversions and transform the customer experience tenfold. However, a simple 2D product configurator won’t have the desired effect.
Salsita 3D Configuration software can help luxury brands save time instead of building their own and avoid the difficult task of buying software that doesn’t quite fit their process. Salsita’s software development kit (SDK) gives luxury brands access to a custom-built framework that can be easily modified to suit their needs.