Luxury Institute News

June 3, 2016

Retailers’ personalization efforts fall short of consumer expectations

Luxury Daily
By: Sarah Jones
June 2, 2016

When it comes to personalization, retailers’ ideas of their own capabilities are often inflated when compared to consumers’ assessments.

A TimeTrade report found that while 69 percent of retailers say they are delivering an individualized shopping experience to customers all of the time, only 26 percent of consumers agree that the retailers are successfully providing a consistent experience across all channels. This divide shows definite room for improvement among retailers as they seek to provide a positive, personalized customer experience.

“This disconnect stems from how retailers define ‘personalization’–as providing a consistent experience across all channels–and how they deliver that personalized experience,” said Lauren Mead, vice president of marketing at TimeTrade.

“Let’s say a customer who has loyalty rewards enters a store–great chance to personalize the customer experience,” she said. “Unfortunately, that customer will likely remain anonymous until point of purchase. By then it’s too late for personalization.”

TimeTrade’s “Personalization in Retail: A Reality Check” is based on a survey of 10 C-level retail executives and 2,064 consumers.

Expectation vs. reality
For 93 percent of retailers, personalization is part of their organization’s strategy.

The most widespread definition of personalization among respondents was having a consistent customer experience across channels, with the interaction between a sales associate and a consumer coming in a close second. Less common definitions include being able to make personalized offers by having a 360 degree view of the consumer and delivering personalized messaging through digital channels.

Asking consumers about the most frequent definition of personalization, TimeTrade found that 55 percent believe that retailers somewhat deliver across channels, while 20 percent say great improvement is needed.

luxury shoppers
Shoppers have a different opinion on personalization than retailers

Consumers’ opinions of a need for improvement do not match up with retailers’ ideas of their own prowess. Only 25 percent have any plans for new personalization initiatives within the next year and a half, while 69 percent believe they are already at peak personalization performance.

For those who are planning upgrades, training in-store associates tops their priority list, with 74 percent intending to do so in the coming 18 months. Targeted marketing campaigns, social selling and clienteling are also goals for at least 40 percent of respondents.

The in-store environment is the top concern for retailers looking to boost their customer experience, with 45 percent agreeing it is their number one priority. The next closest channel is social media, at 19 percent.

When consumers were asked to share which channel they believe provides the worst customer service, call centers came in first for half of respondents, followed by in-store, with 26 percent agreeing it could use improvement.

Bloomingdale's Palo Alto store
Bloomingdale’s Palo Alto store

Despite the rise in digital and mobile marketing in recent years, consumers still rely heavily on in-store sales associates to assist them in making purchases, according to a recent report by the Luxury Institute.

The majority of consumers surveyed reported making most of their purchasing decisions in-store without researching online beforehand. Luxury brands looking to improve consumer relations should focus more attention on improving the in-store retail experience and providing consumers with ready assistance (see story).

“Top luxury brands can personalize better by emphasizing the physical store as an opportunity to tailor the shopping experience to each consumer and training in-store associates to use relevant technology and data to improve the customer experience,” Ms. Mead said.

“Execution here is critical- there are many proven technologies that retailers can use that will help automate processes for store associates and also the consumer,” she said. “Simple automation and self-service can enable consumers to have a seamless experience and help them engage sooner with associates for more prompt service.”

Mobile mindset
One key area that could assist retailers in delivering a positive in-store experience is the incorporation of technology.

Only 42 percent of retailers say their associates use a mobile device or tablet on the sales floor, while 15 percent of employees use their own phones for business within the retail environment. Rather than dissolving consumers’ trust in an associate, more than half of respondents say they would be more confident about their prospects of having prompt, personal service if their contact is using a mobile device to communicate with other employees.

Technology could also facilitate luxury services, such as in-store appointments. When asked if they would schedule an appointment with an associate on a device of their choosing, 59 percent of respondents said they would.

When asked about touchpoints they would like to offer for hypothetical appointments, retailers said that text notifications would be most helpful. This was followed by enabling associates to coordinate with each other via mobile devices to handle traffic in the lobby.

“Tools like online appointment booking can help retailers anticipate which customers will be coming into their store, why they are coming and make sure there is a knowledgeable associate ready to serve them,” Ms. Mead said. “This enables personalization from the start.

“To make this to happen, retailers need to also invest in putting more technology in the hands of store associates: 43 percent of retailers report not currently having their store associates using mobile devices,” she said. “Considering that more than half of consumers feel confident of receiving prompt and knowledgeable help if they see associates using mobile devices to help customers, this is a missed opportunity on retailers’ part.”

Rather than harming the luxury shopping experience, technology can allow retailers to speak to consumers on an individual level.

Department store chain Barneys New York is furthering its omnichannel capabilities through the use of integrated iBeacon technology and a personalization platform.

Powered by RichRelevance’s Relevance Cloud, Barneys is emphasising its dedication to creating an in-store experience enhanced by digital touchpoints. The initiative has created a first-of-its-kind digital customer experience at Barneys’ recently opened downtown flagship in Manhattan’s Chelsea neighborhood (see story).

“The key is selecting technology that enables in store associates to better assist customers rather than replace human to human interaction,” Ms. Mead said.

“With this type of technology training is critical,” she said. “Retailers must invest the time and resources to ensure that in-store associates are fluent in the relevant technology and can utilize it on the fly, enabling and not distracting the associate from from serving the customer and proving the best possible experience.”


October 21, 2014

Luxury Institute Introduces Luxcelerate, an Empirically Proven Method to Drive High Performance in Building Client Relationships

October 21, 2014 80763_LuxcelerateLogo

NEW YORK, NY–(Marketwired – Oct 21, 2014) – Today, the New York-based Luxury Institute announced the launch of Luxcelerate, an enhanced version of its innovative successful 7-Step Customer Culture process. Luxcelerate is designed to accelerate sales performance via a proprietary methodology that focuses on empowering the customer-facing online and offline associates, helping brands to improve both client relationships and sales exponentially.

Presently, top brands are struggling to both expand and retain their client base. Top brands have a conversion rate of 10-15%, a data collection rate of 30-40% (approximately 25% of this data is unusable) and a first time buyer retention rate of 10%.

Luxcelerate encourages the individual sales associate to learn and execute the best practices in client relationship building. The process is designed to improve sales performance via an exclusive methodology that focuses on relationship building, while improving a brand’s conversion, data collection and retention rates.

Luxcelerate’s proprietary methodology is based on shared relationship values and standards that are designed by a brand’s front-line teams, and is therefore customized to fit the unique DNA and culture of each brand. Custom education programs use empirically proven learning principles to drive retention of critical knowledge. Measurement and reinforcement methodologies are then deployed individually to guarantee consistent daily execution. The outcome is humanistic, effective client relationship building that leads to sharp increases in sales.

Luxury Institute’s CEO Milton Pedraza developed Luxcelerate’s 7-step methodology. Mr. Pedraza established this innovative methodology after being inspired by best practices from education, medicine and aviation. Using this process, a number of top-tier luxury brands have doubled, or tripled, the accurate collection of critical client data, and have significantly increased client conversion and retention rates. Luxury Institute has worked with the top brands of major luxury groups, well-known brands owned by private equity firms, and small boutique brands, to drive sales at rates of 15-30% per annum.

“The Luxury Institute was invaluable in helping Malia Mills define and implement our clienteling process. The first quarter that we implemented our program we increased sales by a significant amount.” — Carol Mills, Co-Founder, Malia Mills

“Since embarking on this project, we have seen double digit increases in data collection, conversion and a significant acceleration in retail momentum.” — Claudia Poccia, President and CEO of Gurwitch, Owner of the Laura Mercier brand

References are available upon request. For more information please email or fill out a contact form at


August 6, 2012

As Nordstrom’s arrival looms, rival stores sharpen up

By Marina Strauss
The Globe and Mail
August 5, 2012

Erik Nordstrom likes to boast about his employees going the extra mile at the upscale U.S. retailer that bears his name.

Recently, the great-grandson of the founder of Nordstrom Inc. told the story of a maintenance staff worker who discovered a Nordstrom shopping bag filled with $800 worth of goods in the parking lot of a Farmington, Conn., store.

Flight information in the package helped the employee identify the customer, whom he dialled three times.

She failed to pick up because, she said later, she didn’t recognize the number on her mobile’s call display. Realizing her flight was leaving soon, he drove 200 kilometres – two hours – to John F. Kennedy Airport in New York, and after having her paged at the airport, triumphantly handed her the bag.

She offered him money for gas, but he refused.

“We don’t nail it all the time, by any means, but we’re fortunate to have some really terrific people in this company who care a lot … about their customers,” Mr. Nordstrom, the company’s president of stores, told the retailer’s annual meeting in May.

Click the link to read the entire article:

February 13, 2012

For the wealthy, the experience is what’s important

By Abha Bhattarai
Washington Post
February 12, 2012

Want yellow seat belts in your Porsche? Or green thread for your car’s leather seats?

Join the waiting list, says Kevin Gallagher of Porsche of Rockville.

“We’re finding that people want to sit down and custom order everything — the colors, the interiors, the wood paneling,” Gallagher said. “Fewer and fewer customers are walking in and saying, ‘Yeah, I’ll take that one as-is.’”

As the economy sputters back from a deep downturn, analysts and business owners say the region’s wealthy are spending as much as they always have. High-end customers may be toning down flashy purchases, but they are increasingly looking for customized experiences and exclusive treatment — and local businesses are adapting to meet those needs.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute: