The Internet of Things and the world of luxury goods and fashion do not, on the face of it, seem like natural partners. Wearable technology has, to date, largely focused on functionality, a word not usually associated with the couture houses. However, the winds of change are blowing again. Fashion houses and other high-end brands and retailers are starting to look at how they might capitalise on a useful new market by drawing on smart technology and connectivity.
Luxury brand and connectivity
Market research estimates suggest that sales of smart watches in Europe are likely to exceed 40 million by 2021. Smart watches, however, are a long way away from luxury brands—or are they? Apple’s gold watch is priced at $10,000, which is very similar to prices for Rolex and other luxury watches. It is, however, a very different product, and with a very different heritage. It is by no means clear that Apple customers will be prepared to pay that kind of price, nor that Rolex customers are likely to shift towards a ‘gadget’ instead of a brand that stands for longevity. It is also hard to see what Apple customers gain from having a gold Apple Watch instead of the standard one.
Dechambeau, a high-end fashion brand based in New York, is trying a different approach. This autumn, the company added connectivity to a limited edition of 15 jackets called the BRIGHT BMBR. The jacket is linked to a smart products platform IoT cloud run by EVRYTHING and Avery Dennison’s Janela platform. It contains a hidden chip and QR code. Customers scan it and can then access a range of curated experiences and gifts, such as access to exclusive events and locations. Gifts can also be unlocked when the jacket is within range of particular stores, and the jacket will act as a ticket to Dechambeau’s New York Fashion Week runway show. It is, therefore, effectively a ticket to a series of exclusive experiences.
Dechambeau’s BRIGHT BMBR may seem like a gimmick, and in a way it is. What it does, however, is demonstrate the potential for connected items to be tied to experiences. You are not buying a jacket, you are buying access to an exclusive club providing services, with only 15 members. This could be expanded to a large range of other goods and services, such as loyalty rewards, perhaps linked to third party apps. Personalised recommendations for other goods and services are also possible, providing a concierge that is quite literally in your pocket or up your sleeve.
Digital products can also be used to provide information to customers. As consumers become more concerned about the global impact of their purchasing, goods might, for example, provide full production history to improve transparency. From the brand’s point of view, digital connectivity also makes goods much hard to counterfeit. Item-level digital authentication can be coupled with real-time analytics to make it harder to sell anything counterfeit, and also combat returns fraud. Even improving sustainability is easier if the product has built-in recycling information.
Retailers in Paris are experimenting with use of IoT through connected displays. They want to understand why customers choose particular brands over others. The displays use motion-activated screens to provide information to customers when they pick up particular goods, and can also feed data back to the brand or shop. This means that the effectiveness of stands can actually be measured, and displays can be updated much faster based on real-time data.
Tracking customers and data protection
The technology also exists to identify individual customers from their smartphone frequency. This can therefore be used to track customers around the store, and identify them on future visits. This is pretty much what cookies do online, but somehow it does not feel quite the same. Retailers are understandably a bit wary about this, and there are signs that shoppers might also be concerned. Many customers suggest that they like the sheer anonymity of shopping in store, compared with online, and respect for privacy has always been an important part of the luxury goods market. It also seems unlikely that this kind of tracking will be possible without explicit consent under data protection law in Europe.
There are, therefore, concerns about the use to which IoT technology might be put in the luxury goods market. The risk of misinterpreting information about customer movements in store is real. What is clear, though, is that the IoT is already changing thinking in high-end fashion retail.