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‘Total Commerce’: Why luxury brands are winning the race for consumers

Tag takes a look at five principles consumer brands can adopt from the luxury sector to successfully deliver a total commerce experience.

Three women shopping for luxury handbags and clothing.
(Credit: Getty Images)

Few sectors have been more shaken by the events of the last two years than the luxury brand world. 

The sector has been buffeted by a collapse in channels, such as travel retail and department stores and a dramatic change in the foundational consumer behaviors and occasions. Usage and shopping across the worlds of beauty, fashion, premium spirits and other brands in the luxury goods market contracted by as much as 25% from 2019 to 2020, according to Forbes.

While the pandemic was certainly a historic shock to the luxury goods sector, the shock also came with an industrywide “Total Commerce” revolution — where winning with shoppers requires the delivery of seamless online and offline brand experiences for customers across a truly omnichannel journey and where connection point is both an opportunity for brand engagement and a critical opportunity to drive purchase. 

Here are five principles consumer brands can adopt from the luxury sector to successfully deliver a total commerce experience: 

Think experience, not just product

Luxury brands aren’t just selling products, they are also selling an opportunity to momentarily slip into an “out of reach” world. 

While this has always been true in their marketing, the rise of digital technologies has created a multitude of new ways to deliver luxury experiences. The most iconic luxury brands, such as Burberry and Gucci, are leading the charge into a world of digital brand experiences, including AI-driven CRM personalization, augmented reality and even gamification — not to mention the future potential for these luxury brands to enter the metaverse. 

Communicate your commitment to good 

Any brand hoping to win with the millennial and emerging Gen Z shopper needs to embrace purpose, and this is even truer for luxury brands.

The millennial shopper will soon account for the majority of all luxury purchases, and brands wishing to earn their attention need to authentically “do good” in the world. Across the industry, we are seeing huge focus on ESG initiatives and marketing. Brands such as Tiffany & Co. and Stella McCartney are leading the industry into a more sustainable, socially responsible place and are being rewarded by this generation of shopper.

Where you choose not to be is just as important as where you choose to be

Building luxury brands means avoiding channels or store environments that don’t deliver a premium experience. 

The great industry reset has provided luxury brands and retailers with a unique opportunity to reset their distribution strategies. The story of the great downsizing of the department store channel has many villains but, at its heart, is also a story about a channel not staying true to its core.

Be less pervasive and more persuasive wherever you are 

Luxury beauty brands that focus on shopper environments where they can showcase their luxury positioning correctly are succeeding. To create ideal brand experiences means thinking holistically about the customer journey, online to offline and back again.  

2022 will see a refocus on brands launching flagship stores as a response to “Total Commerce.” Visit concept stores, such as Chanel’s Paris flagship store or L’Occitane’s 555 5th Avenue store in New York City, to understand how the flagship experience can transport the shopper into a world of both physical and digital brand experiences. 

Unlock your intangible brand assets

Iconic luxury brands understand that sometimes saying less is more. Just the hint of an iconic logo, color or single design feature is enough for instant shopper recognition, especially in a digital or virtual world. 

In May 2021, the Roblox platform hosted the virtual Gucci Garden Exhibition where players could view and purchase limited edition, digital versions of real Gucci products. The exhibition rapidly ran out of stock, and the digital Gucci Dionysus handbag resold for an incredible $4,100 — $700 higher than the real item.

In 2022, you can expect to see greater luxury brand investment in the metaverse. To stay ahead, prepare now by trademarking logos and digitizing products.

At Tag, we work with retail brands as their agencies of record to create immersive shopper experiences that transform retail spaces, from high-impact POS displays to digital interactive experiences that drive customer engagement, brand loyalty and sales.

Find out more.

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