Luxury Retail and Digital Management, 2nd Edition

Chapter 7The Challenges of Offline and Online Integration

I believe that online sales and offline sales will continue to complement and reinforce each other to give our customers a better comprehensive approach.

–François-Henri Pinault¹

Exane BNP Paribas, in one of their studies (Exane BNP Paribas and ContactLab 2015a), introduced the notion of the ‘digital playground’ of luxury brands. This breaks with the silo vision of compartmentalised sales channels based on single points of sale (in a boutique or e-commerce site) and adopts a client-centred vision – more precisely on the customer experience. This is the perspective adopted in this book and one we introduced in Chapter 4. This ‘digital playground’ (see Figure 5.5) is only expanding, and the forecasts for 2020 made by Exane BNP Paribas are significant:

• Sales from the ‘digital playground’ (the total of online and offline sales resulting from online searches – ‘Research Online Purchase Offline’ or ROPO) will increase up to 51% (compared to 27% in 2014). This is a radical change for luxury brands.
• O2O customers spend 60% more over the year than shop-only customers (and this number is increasing year after year) and they are buying more and more online: the O2O circuit therefore develops global sales.
• Luxury brands are able to identify 90% of their boutique customers either in digital form (e-mail) or in the form of a comprehensive data file (registered customers). In 2014 they already represented 73% of the customer base. ...