5-minute read
 

Luxury retail customers are changing the way they like to shop. With technological advancements altering the retail experiences, modern personalisation does not mean diminishing the intimacy that customers and sales assistants usually achieve in luxury stores. By harnessing data and the latest technology, brands can deliver more personalised experiences to drive value, loyalty and potentially better margins – setting new standards for powerful and individual customer experiences.
 

What’s in store for luxury shopping experiences

Luxury retailers have long set the standard for in-store personalised experiences, offering exclusive and individual services that make customers feel valued. To uncover what the future might look like, we commissioned a YouGov survey of 500 UK consumers who regularly shop with luxury brands. We found that although 31% of luxury goods shoppers still favour an in-store experience, more customers prefer interacting with luxury brands via their website (41%) or an online marketplace (21%).¹ This proliferation of choice and channels makes creating a unified shopping and payment experience a challenge.

Data: the cornerstone of personalisation

Once external payment data is added to a retailer’s own, it creates new possibilities to understand lapsed, current, and potential customers. Our research with FT Longitude found that 49% of senior UK business leaders said better insights into customer habits give them a significant competitive advantage, with 51% seeing payments data as a major untapped source of insight.²

Companies also use quizzes, gamification, and value-added services to capture information customers are willing to share – known as zero-party data – enabling them to offer greater personalisation. Brands like Hugo Boss are heavily investing in data collection and analysis to meet growth targets, using data to identify which products will sell, ideal pricing, and better marketing strategies.³

Superhuman personal shoppers: the AI curation experience

To ensure customers aren’t overwhelmed by the range of choice online, companies are using generative AI chatbots to understand customer needs and make personal recommendations. AI can also help free up staff from routine admin or simple customer queries; as seen from IKEA’s AI chatbot, Billie, which answers questions about opening hours, deliveries and help customers with missing items.⁴ Customer service staff are then redeployed to more value-added roles, such as personal design consultant.

ZEGNA’s digital ecosystem, ZEGNA X, has seen a 75% uplift⁵ in customer spend by combining AI-generated recommendations with in-store associates. This shows that for luxury brands, technology can enable them to deliver a tailored one-to-one experience, whether it’s in-store, online, human or AI-driven.

Going beyond recommendations with individual treatment

Marketing personalisation can now be achieved on a greater scale than ever – using data and technology to talk to customers as unique individuals with unique tastes. Offers and pricing can now be tailored to customers and their circumstances. For brands that offer embedded finance, there’s further opportunity for richer datasets and even more customised marketing.

A simple way to make payments personal is to let customers use their preferred payment method: 37% of luxury goods shoppers say being able to pay their way is a reason to shop with a merchant.¹ Kirsty Morris, Managing Director of Client Experience at Barclaycard Payments further explains, “While the aim of other moments is to be memorable, ideally the payment experience should be as invisible and forgettable as possible.”

Experiences customers expect to be offered as a standard by luxury retailers

Supporting innovation through payments

For some consumers, long-term sustainability is an important factor when purchasing luxury items. As cost-per-wear approaches to clothing gain popularity (a trend exemplified by the ‘Girl Maths’ phenomenon on TikTok), younger consumers are moving away from fast fashion towards better-quality and, therefore, often more expensive brands.

Personalisation can also be about letting customers make their mark, from the bespoke engraving offered by Diptyque or the customisable packaging designed by K-beauty brand Clio. Our research shows that 22% of shoppers want tailored products¹ – and with that greater personalisation, comes increased value and an increased premium.

A bright future for personalisation

While luxury retailing has long been synonymous with exceptional personal service, the move to a truly omnichannel customer experience creates innovative opportunities. The sector is embracing the power of data and technology to set new standards in personalisation and customer care.

Payments can put quality and style within reach of aspirant consumers with buy-now-pay-later (BNPL) instalment plans or other forms of flexible credit. In fact, payments have an enabling role across all innovations. “Whatever the personalisation or innovation, paying has to be simple and secure,” adds Kirsty. “Whether it’s delivering a new experience, a move into a new market or managing new suppliers – it’s important to have flexible payment partners to help you succeed.”
 

The key takeaways

Brands need to deliver value to customers in exchange for the data they gather – and have a plan on how to use that information for their benefit. This data and technology can then allow luxury brands to build on their heritage of personalisation, unifying customer experiences across channels. Payments data can further help brands understand their customers, market and competition. With our data analytics services, we can partner with brands to build strong customer profiles and shape personalisation strategies, crucial to the high-end experience luxury shoppers demand.

¹Barclaycard-commissioned YouGov consumer research (January 2024).
²FT Longitude and Barclaycard Payments surveyed 500 senior UK business leaders (December 2022 and January 2023).
³Source: Metyis campus inaugurated, Press Release, Hugo Boss Group, June 2023.
⁴Source: Madeline by KNXT.
⁵Source: AI and Remote Selling, Press Release, Ingka Group, June 2023.

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