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StrategyAcademic

Hedonism: more than ever key to the customer buying experience

A countless number of new retail actors (led by Amazon itself) are entering the luxury market, reinventing the luxury shopping experience.

Dr. Perrine Desmichel

By Dr. Perrine Desmichel27 mai 2020

In their research, Dr. Perrine Desmichel (researcher at Northwestern University) and Prof. Kocher (University of Neuchatel) try to help luxury marketers protect their brand uniqueness even in multi-brand stores.

In some sectors, multi-brand stores still account for up to 75% of sales.

Luxury brands have built their retail success on the complementarity between single- and multi-brand stores

The design of a luxury distribution strategy is a key concern for luxury managers who want to reach their customers without compromising their brand image and service quality. Therefore, they typically prefer exclusive distribution strategies and invest heavily in their own store network or alternative experiential stores (such as pop-up stores). However, in some countries (e.g., Japan, Middle East) or to satisfy certain types of customers (e.g., middle-class), luxury brands must enlarge their distribution channels to multi-brand retailers (e.g., department stores, duty free shops, specialized stores). More recently, luxury brands also had to rely on multi-brand web retailers to benefit from their expertise in online retailing and to develop their online presence. A survey by Bain & Company revealed that revenues of the global personal luxury goods market come from both single- and multi-brand stores in almost equal proportions . In some industries, such as perfumes and cosmetics, multi-brand stores are even the primary source of revenue, representing up to 75% of total sales . Therefore, luxury managers must be able to implement and manage differentiated selling strategies in both types of stores.

Why multi-brand stores differ from their single-brand counterparts?

In their research, Dr. Perrine Desmichel and Prof. Bruno Kocher identify critical differences in the shopping experiences that single- versus multi-brand stores offer to their customers. For instance, surveying 274 senior managers (in 2018), as part of an online survey launched by a prestigious watch maker, the researchers found that buying a watch on a multi-brand platform was still perceived as less pleasurable and enjoyable than purchasing it directly on the brand’s website. This result is not surprising knowing how luxury brands strive to create a unique and memorable shopping experience in their own stores.

Offer comparisons are partly responsible for more intense price competition. Shutterstock)

The researchers further discover that this experiential gap between both types of store affects consumers’ purchase-decision process. Indeed, in comparison with single-brand stores, multi-brand stores offer a larger brand assortment and give consumers an opportunity to directly compare products from several luxury brands. Dr. Desmichel and Prof. Kocher showed that multi-brand stores not only facilitate access to multi-brand offerings but also raise consumers’ motivation to consider a larger number of brands before making a final purchase decision. This prediction was supported by six experimental studies, conducted with more than 2,000 consumers. As an illustration, even after shoppers were reminded of the possibility to compare brands online (e.g., on their smartphones), the desire to consult information about other brands remained higher for consumers in multi-brand than single-brand shopping environments.

What luxury brands should do to limit brand comparisons in multi-brand stores?

It seems critical for luxury brands to minimize the comparisons between their products and the ones of their competitors, in multi-brand settings. Indeed, in the long-run, intensive luxury brand comparisons are partly responsible for fiercer competition on price, lower customer-brand commitment (and satisfaction), and increased similarities in brand offers.

A solution for luxury marketers is to be more careful about the luxury consumers’ focus (or goal) when purchasing luxury products. Results show that consumers’ motivation to engage in comparisons is conditioned by consumers’ hedonic focus (i.e., the desire to fully please themselves with the luxury items they will be deeply and personally satisfied with). When the hedonic dimension of luxury consumption is salient to luxury consumers, they are also more likely to focus on the one or two brands that would please them the most, than when it is not. Thus, it seems essential for luxury brands to rethink and redesign the shopping experience in multi-brand stores to promote this hedonic focus.

Even if luxury brands do not have full control over the customer journey in multi-brand stores, brands can think of several ways to activate consumers’ hedonic focus, for example though in store advertising (representing the pleasurable dimension of luxury consumption), by a specific training of sales persons (trying to sell to customers what please them the most), or by innovative experiences meant to guide consumers in a realm of luxury hedonism. On the contrary, luxury brands should avoid alternative selling arguments, such as activating consumers’ desire to impress (i.e., status focus). Consumers’ status focus may distract them from their own desire to please themselves with the brand that they prefer and therefore encourage brand comparisons.
Overall, research stresses that in both online and offline channels, luxury brands should not compromise the hedonic character of consumers’ shopping experience, especially when it comes to multi-brand stores.

What is the take-away for luxury multi-brand stores?

Thinking in terms of brand comparisons can also be useful to category managers and merchandisers in charge of product and brand assortments in luxury multi-brand stores. Indeed, the research project has also shown that consumers were more likely to categorize luxury products by brand (than by product category) when their hedonic focus was high. This insight can be used for merchandising plans. For example, marketers should group products from the same brand together, in shop windows or store displays, when they expect consumers to be driven by hedonic focus (e.g., Christmas break) more than by an alternative focus.

Click to the abstract of the academic article

References

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