Expert Insight: How do Luxury Brands Recover? Make the Customer Experience King

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Expert Insight: How do Luxury Brands Recover? Make the Customer Experience King

By Leni Battaglia, Greg Parks, and Melissa Rodriguez - 07/01/2020

The global impact of the COVID-19 pandemic has dominated 2020, with luxury brand retailers taking a particularly hard hit. Now as those retailers transition from survival of mandatory closures to a slow reopening, they are forced to balance legal compliance with customer comfort.

For months, customers were told to stay away from stores, to fear public places. Convincing both customers and employees that it is safe to return will be as important as following the legal requirements. Luckily for luxury retailers, the customer experience has always a key part of their business models.

So what will that new customer experience look like? As movement is limited throughout the country and internationally, some early research suggests luxury brand retailers may focus more on e-commerce and the online shopping experience. That will be an important part of their business as slow tourism will continue to decrease spending trends at brick-and-mortar locations. This is particularly true for luxury brands, which get significant revenue from tourist spending, and it is unclear when tourism will return to pre-pandemic levels.

For shoppers that are choosing to remain at home and shop online, retailers should consider the expansion of virtual services, such as personal shopping or styling, to help bring the experience of individualized assistance to online buyers. Employees (such as sales consultants) may be able to provide such services for clients by phone, messaging platforms, or even video calls. 

Retailers should review employment policies, such as wage-and-hour requirements, prior to assigning employees to this work, especially if the employees will be completing the work remotely. And companies will need to make sure their websites are accessible to all customers, including those with disabilities.

For those customers coming back to the stores, some retailers may continue personal shopping and curbside pickup. Some jurisdictions, such as California and New York, have detailed requirements and guidance for curbside/outside pickups, and have or will be allowing customers in stores in limited capacities. 

Even where a jurisdiction does not enumerate curbside/outside pickup requirements, retailers should follow best practices, including using bins to transfer ordered merchandise to customers or have staff place items directly in a customer’s car; attaching receipts to purchased packages or bags; using contactless payment systems or prepayment options; and not allowing customers to enter the store. 

Others may prefer to go appointment-only for in-store shopping or to capitalize on outdoor space like their parking lots to move some of the retail experience under tents. Still, others may require personal protective equipment (PPE) to be worn in the stories – either to comply with state and local orders or to promote safety. All stores that take this route will need proper and prominent signage and should consider providing extra PPE for customers that did not bring their own. Some luxury retailers have started making their own branded PPE and masks and, when economically feasible, provided those to customers and to employees.

We can expect social distancing to be implemented everywhere from manufacturing to corporate offices to design floors to the retail stores. Reduced store hours will give more time for cleaning and employee rest. 

In fact, very few retailers will operate on the same hours they did before the pandemic. Luxury consumers will be more focused than ever public information related to company operations and press coverage of safety standards.

Of course, around the world these safety standards will differ. In China, employees are required to register with a local “health kit” a government-sponsored app, which indicates the health status of the employee. In South Korea, there is a text messaging-like broadcast system to alert residents of the exact locations and movements of people who have tested positive for coronavirus. Both places require regular employee temperature checks, staggered meal and rest breaks to discourage congregation while eating, a designated quarantine area for anyone showing symptoms.

In the United States, occupancy rates at stores for both employees and customers will be capped at a level lower than normally allowed, often with a “one in/one out” policy once those levels are reached. Social distancing will apply for both shoppers at checkout or locations where customers would otherwise tend to gather, and for employees who may be expected to stagger meal breaks or bring their own utensils and food and eat away from others. 

Keeping workers on shifts with the same people could limit the amount of contacts for workers and better control a potential outbreak (i.e., if one worker becomes sick then workers on the other shifts are protected).

And at the state level, those safety standards differ even more from specific screening policies to contact tracing. The latter may be easier for luxury retailers to maintain a log of every person, including workers and visitors, who may have close contact with other individuals at the work site or area than other large retailers who don’t have ongoing relationships with their consumers. But even for more exclusive retailers, customers cannot be required to submit to a health screening or provide their contact information, and all information that is collected must adhere to federal and state privacy regulations.

If a confirmed case is found at a retailer, cleaning and disinfecting the store to CDC recommendations will help ease shoppers concerns about returning. Those recommendations include closing off areas that could be contaminated and disinfecting all areas, with a focus on frequently touched surfaces. Incoming shipments should also be handled by employees in gloves and the containers should be sprayed or wiped with an approved disinfectant.

But all of these safety efforts will be for naught if they aren’t effectively communicated to customers. This communication will assure customers the retailer is employing safety and sanitary practices and provide guidance for customers that they need to follow to when visiting the store. This communication could take many forms: website updates, social media posts, emails, signs at the store, verbal instructions from employees, and in-store audio messaging. 

The messages themselves should be compassionate, but clear and concise about the policies and practices to be followed in the store and offered in more than one language and in more than one method of outreach. It should also be regularly updated to capture changes in policies and store details.

While the same principles of providing a great customer experience will be the key to success for luxury retailers, the definition of a great customer experience has definitely changed in the age of COVID-19. Those retailers who can make customers feel safe to shop will likely find a quicker rebound this summer. 

Leni Battaglia, Greg Parks, and Melissa Rodriguez are partners at Morgan, Lewis & Bockius LLP, where they are part of the firm’s Retail Industry group. This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.

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