How are Luxury Brands Using Big Data for Benefit in 2022?

Big data enables luxury professionals to get important client information without having to speak with their wealthy investors

Big data, which refers to the technology and procedures that are used to gather, analyse, and provide actionable insights from massive volumes of consumer data, is changing the luxury industry. This data is divided into two categories: structured and unstructured.

Purchase records, customer profiles, and special memberships provide luxury firms with a plethora of data on their customers' purchasing behaviours, all of which can be gathered and analysed to capture and up/cross-sell to their consumers. However, high-end brands frequently underutilize this information. Furthermore, most premium brands are ignorant of the potential use of big data in their company operations.

Rise of big data in luxury brands

The quality of the client data that is available has also altered. Big data is no longer only predetermined digital information databases containing names, ages, sex, and income, according to The Economist. Consumer social media comments on luxury forums, wealthy influencer photo feeds on Instagram, and high-end customer participation across an omnichannel buying funnel are all examples of the new economy's quick real-time flows of primarily unstructured data.

The entire amount of digital data created and saved each year will approach 180 zettabytes by 2025, according to market research firm International Data Corporation (IDC). To manage it all, global computer companies are rapidly building new data centres all around the world. The Wall Street Journal reports that Amazon, Google, and Facebook spent more than $32 billion on data management in 2016, up 22% from the previous year.

Luxury brands, on the other hand, continue to spend on data analytics services year after year.  Companies' enthusiasm in handling and generating value from the vast quantity of consumer data accessible to them, according to IDC, will drive the market for data analytics to exceed $200 billion by 2020. As a result, experts with the expertise and abilities needed to analyse large amounts of data are in great demand, and luxury businesses fight to employ the right digital talent available.

Luxury firms already have access to a lot of structured data on their consumers, including purchase history, exclusive memberships, and client profiles that contain a name, age, sex, income, and other information, all of which can be gathered and processed to boost sales. High-end brands, on the other hand, are frequently under-utilizing this data and ignoring the vast troves of unstructured data – such as customer comments on social media, affluent influencers' Instagram photo feeds, and engagements across several co customer journeys – that can now be mined to gain an invaluable understanding of customers lifestyles, buying habits, and purchasing behaviour.

Big data creates a personalised experience

Luxury firms may acquire insights on how to improve and customise the user experience both online as well as offline by evaluating the data accessible to them. Montblanc, a German producer of high-end timepieces, leather products, and writing tools, for example, used advanced algorithms in its physical retail locations to create heat maps that revealed where buyers spent the most time when perusing things. By analysing the data to determine the optimum spots to put its product offerings and sales force, the firm was able to improve sales by 20%.

Burberry, a British fashion business, used its digital platforms, such as Twitter, Facebook, Pinterest, Instagram, and YouTube, in conjunction with conventional brick-and-mortar stores to collect consumer data. Customers could also digitally share their purchasing preferences, experiences, and purchase history and so when they approached an offline store, sales associates could use a tablet to access this information in real-time and offer better-informed suggestions to improve sales.

Burberry also redesigned its main shop in London to create a digitally integrated display that mirrors the brand's website. Customers may pick up a garment with an RFID tag, which will launch an interactive film that explains how the product was manufactured and what other goods are accessible in the market that would go well with it. Burberry may use the project to create client profiles depending on which clothing they've tried on in the past, allowing them to customise tailored situations in the future.

Burberry saw an 11% increase in revenue and a 14% increase year over year as a result of these and other digital efforts. The fashion firm was able to map its market precisely and identify the importance that millennial clients will play in sales thanks to big data analytics. Burberry opted to restructure its marketing department and deploy a creative content media team since millennials are a tech-savvy generation that spends a lot of time online. The website has also been dubbed the "million square foot shop" within the corporation.

Luxury customers are changing, and their purchasing habits and expectations are changing along with them. If brands want to remain relevant, they must develop alongside their customers. Luxury businesses must devote the same amount of attention to their online presence as they do to their physical presence. Luxury businesses may utilise data-driven personalisation to give personalised services and bespoke goods to their top consumers since it allows them to harness historical customer data to draw significant insights.