6 Must-Have Luxury Retail CRM and ERP Features
From Harrods’ festive holiday displays to Louis Vuitton’s exclusive invite-only shopping events for top clients, the luxury retail space has long been defined by imaginative in-store experiences and service tailored to the customer’s desires. Though this remains true of the industry as a whole, many luxury retailers have struggled to adapt their unique approach to the digital world. And with more customers shopping on digital platforms than ever before, it’s imperative that retailers find innovative ways to leverage technology to bridge the gap between in-store and online and deliver a truly immersive omnichannel experience.
The best way to achieve this level of seamless ecommerce integration is to implement customer relationship management (CRM) and enterprise resource planning (ERP) systems designed specifically for the luxury retail sector. To gain a greater appreciation for how retailers can benefit from implementing CRM and ERP technology, let’s review some of the features a luxury retail CRM or ERP can provide.
Top Luxury Retail CRM Features
Digital black books: Luxury shoppers have high expectations about the type of personalized customer service they receive from the brands they patronize, and these expectations extend to digital customer service. Luxury retail CRM software enables retailers to create digital “black books”— detailed customer profiles based on customer data, including contact information, recent purchases, order history, repair history, affiliations, and more.
Sales associates can then use this information to anticipate customers’ needs, provide personalized product recommendations, and differentiate the in-store experience. By providing a 360-degree view of the customer all from a single interface, a luxury retail CRM also makes it possible for associates in store locations around the world to quickly pull up key customer data so customers receive a consistent customer experience regardless where they shop.
Loyalty rewards programs: Not all loyalty rewards programs are created equal, and affluent shoppers expect a program of the highest caliber. Rather than redeem points for product discounts, luxury retail loyalty rewards programs should focus on the “rewards” portion by enabling shoppers to redeem points for exclusive experiences and limited-edition product offerings. Luxury retailers can give their programs an additional boost by turning them into tiered systems that further reinforce a sense of exclusivity and elevated status.
A luxury retail CRM system not only makes it easier for customers to keep track of their points and which rewards they’re eligible for, but also for luxury retailers to identify high-value customers, trigger real-time loyalty messaging, and provide a more tailored engagement. Grouping customers into tiers within a CRM allows for further customer segmentation and more in-depth data analysis, so retailers can derive additional insights from customer data.
Targeted marketing campaigns: As mentioned above, luxury shoppers place great value on personalization. This is true not only for customer service and product offerings but for marketing campaigns, as well. Luxury brands with run-of-the-mill, one-size-fits-all marketing campaigns are less likely to draw customers’ attention — in fact, marketing campaigns without content relevancy have an 83 percent lower response rate, according to analysis from Constellation Research.
Luxury retail CRM software features customer segmentation tools that enable retailers to drill down into their customer database and create unique customer sub-groups based on shared characteristics such as age, location, and behavior. By gaining a better understanding of customer demographics, retailers can tailor their direct marketing efforts — such as email, online advertisements, and SMS messages — to appeal directly to the interests of each of these segments, as well as identify potential leads.
Luxury retail CRM systems also enable customers to create and manage product wish lists, which retailers can use to strategically deliver in-stock and out-of-stock notifications, price reduction alerts, and targeted product recommendations.
Top Luxury Retail ERP Features
POS clienteling: As mentioned above, luxury retail customers have high expectations when it comes to personalization. This personalization is central to clienteling, the process by which sales associates develop long-term relationships with consumers. Clienteling enables luxury retailers to attract and retain customers.
Luxury retail ERP POS clienteling functionality enables sales associates to gather and store more information about customers — such as, say, the fact that a customer buys a new piece of jewelry for their partner for their anniversary every year — to better anticipate shoppers’ needs, and create a highly personalized experience.
POS integration: In order to keep up with the demand for luxury goods and services, retailers should look for a luxury retail ERP that offers mobile point of sale (POS) system integration. In addition to providing real-time reporting on customer transactions, mobile POS systems offer advanced, intuitive capabilities such as the ability to add products to a transaction, to select product variants, and to choose a warranty plan.
ERP and POS integration also automates data entry, saving time that would otherwise be spent manually entering data into an ERP system and eliminating data redundancies and inaccuracies that occur as a result of human error.
Product warranties: Many luxury items come with warranties, so the ability to offer multiple warranty plans at the time of purchase, as well as post-sale, is vital. Luxury retail ERP solutions make it possible for sales associates to provide combo warranties, to pull up previously sold items if a customer wants to purchase a warranty post-sale, and access warranty reporting. This last capability is especially important because warranty reporting enables associates to quickly access information about a previously sold item, including item description, price, purchase date, register transaction number, sales order number, warranty sold, price of the warranty, and purchase data of the warranty, as well as send warranty files to the warranty provider.
Merchandising capabilities: Sales associates in the luxury retail industry are under immense pressure from employers to provide an exceptional customer experience during every customer interaction. By empowering associates with advanced ERP technology, retailers can ensure that their employees consistently exceed these high expectations. Luxury retail ERP solutions enable associates to find the merchandise their clients are looking for faster, as well as merchandise that complements what clients already have, which leads to higher sales.
Certain luxury retail ERP systems provide associates with a holistic view of store merchandise broken down into individual categories. From there, an associate could drill down into a category to view available items, as well as into products to see descriptions and attributes, all in the interest of providing customers with detailed product comparisons. A luxury retail ERP can also identify upsell and cross-sell opportunities so associates can increase revenue and, ideally, customer retention — an especially significant capability given that each additional purchase increases a customer’s lifetime value.
Data-driven dashboards: To maintain an edge in a competitive industry, luxury retailers must regularly re-evaluate product and sales associate performance to see which products and people are performing best and to create a plan of action to adapt to purchasing trends.
Luxury retail ERP systems present key data, including gross sales and profits, sales based on individual associate, and sales based on product name, in clean, easy-to-read dashboards. Retailers can use the information within these dashboards to identify top-performing products and people, make more informed purchasing decisions, and realize potential sales opportunities. Certain luxury retail ERP systems provide higher level, advanced price and inventory optimization analytics for even more granular insights. As its name implies, price optimization analytics helps retailers determine optimal pricing for specific products, seasons, and store by using data to analyze lost sales, inventory turn, selling patterns, and more. Inventory optimization analytics enables superior inventory management based on inventory data, demand data, and season.
As technology continues to evolve, luxury retailers will find innovative ways to use it to benefit both their customers and their bottom line.
The right luxury retail CRM and ERP systems, especially when used in combination, have the power to optimize business operations, increase customer loyalty, and improve employee performance. Microsoft Dynamics 365 for Luxury Goods combines the power of the Microsoft cloud, Power BI analytics, and Hitachi Solutions’ Commerce Suite to deliver real-time reporting, marketing campaign management, merchandising management, and more so that retailers can continue to innovate and grow their business for years to come.
To learn more about Dynamics 365 for Luxury Goods or Hitachi Solutions, reach out today — we’re happy to answer any questions and help you find ways to grow your luxury retail business with technology.