Digital Transformation for Fashion and Luxury Brands

Fashion and luxury customers alike expect seamless and personalised shopping experiences, particularly Millennials and Generation Z consumers who begin their journey with a brand online. The fashion industry has changed social trends, people’s identities and lifestyles, and encouraged experimental experiences. Since its development, artificial intelligence (AI) has increased customer service and delivery standards through big data management and provided new experiences, such as virtual try-on applications. Today, AI is more than just another tool to increase online traffic and customer engagement; it is a strategy for long-term survival and innovation. This chapter traces the role of AI across numerous fields, including chatbots, track and trace, predicting trends and virtual influencers, and highlights the implications for the fashion industry.

The use of digital technology in the apparel industry has changed massively in recent years and given the growing social awareness of the public, much of this technology is being applied to support sustainability practices. In this chapter, we look at the challenges faced by industries and how they can be supported by the application of blockchain technology. In particular, as far as fashion industries are concerned, it is mainly used to demonstrate the environmental quality of fashion products to consumers, protect brand image, and secure digital identities. Furthermore, as in several other business areas that we will briefly discuss, blockchain can solve data protection problems, reduce information asymmetry, and avoid fraud, including in payments. Finally, we present some cases, including Aura, the consortium launched by LVMH, through which some luxury brands have overcome individualism to develop a blockchain-based platform.

As digital spaces mature over time, the interaction between fashion and luxury brands and their customers will transition from linear and transactional to multidimensional, collaborative and experiential. This chapter focuses on the ways artificial intelligence tools, such as chatbots, augment the way brands engage with their customers, recommend products, complete transactions and provide post-purchase customer service. Chatbots have provided brands with a new communication channel for customers who are looking for personalised interaction, speed of response and 24/7 availability. Customers benefit by gaining instant access to the brand; brands benefit by handling a larger volume of customers at a reduced cost. Chatbots and their integration with other tools, such as virtual reality, in the new ecosystem of the metaverse are also explored in relation to luxury brand experiences.

As Internet use increases and lifestyles begin to transform in various ways, consumers have become more aware of luxury hospitality, which was originally only accessible to high aristocracy. This has led to a unique form of brand worship, increasing gravitas through digital marketing. However, luxury hospitality businesses face problems and challenges when absorbing digital marketing innovation. As such, capability factors and luxury hospitality digital marketing innovation is a hot topic worthy of repeated discussion and analysis. In the European market, digital marketing has impacted upon consumer culture in many ways. Luxury hospitality marketing strategies adapt in line with technical progress, digital platforms, and customer growth. This study extends academic literature on this subject by introducing absorptive capacity as a factor enabling the successful implementation of digital marketing innovation. The objective of this chapter is to explore the importance of absorptive capacity, marketing capability, and disruptive innovation as elements integral to the life cycle of digital marketing innovation.

The adoption of augmented reality (AR) represents an extraordinary opportunity to enrich the value of the customer brand relationship, especially in fashion retail. Many firms utilise AR technology to enhance the consumer online shopping experience. In the retail industry, AR is gaining increasing traction as a means of improving the customer experience overall. Considering the varied value luxury fashion consumer holds, the purpose of this chapter is to contribute to existing literature and provide insight into the extent to which AR has proliferated in luxury fashion retail.

Video-based content is one of the most common marketing tactics that has successfully attracted viewers to engage online through various platforms, including YouTube, Instagram and TikTok. With consumers taking more actions to prevent adverts from interrupting their online viewing, marketers and influencers alike are having to reconsider their advertising strategies in an effort to appeal to consumers with an increasingly shorter attention span. Short video adverts offer creative and interactive features to enable brands to forward push notifications to online users who generate content, resulting in increased engagement between consumers and various marketing campaigns. The features and systems of short video adverts can influence consumers’ perceptions of adverts and favourable outcomes of online advertising.

Fashion brands have to date largely invested in developing offline and online touchpoints to create an Omnichannel Experience for their customers. However, the availability of a variety of services and technologies is not enough without integration among them. This chapter will discuss the role of touchpoints in offline-to-online and online-to-offline channel integration strategies, identifying those that create major value for fashion consumers. The proposed approach combines both customer and company perspectives in evaluating touchpoints in order to discuss and give insights into the roles of touchpoints from a strategic point of view.

Influencer marketing represents a strategy that companies increasingly use to communicate with their market and add value to their brands, mostly fashion brands. However, the literature needs to be more extensive and requires further effort to understand the relationship between social media influencers and consumer behaviours. To this end, this chapter first provides a theoretical overview of the phenomenon by analysing the role and characteristics of influencers and the marketing implications from the company’s point of view. Then, the chapter discusses the theories underpinning the effectiveness of influencers’ sponsored content on social media and consumers’ perceptions. Finally, the chapter briefly illustrates our empirical research aims of investigating the relationships between purchase behaviour and engagement of a sample of Italian Gen Y and Z consumers based on their ability to recognise sponsored content on the Instagram channel by fashion influencers. Finally, the chapter concludes with a brief discussion of the main findings and the managerial and theoretical implications that emerged.

Celebrity endorsement is one of the most commonly used marketing strategies in the fashion and luxury industry. In the process of digital transformation, brands are also exploring more effective ways to reach consumers. Social media platforms have attracted more and more web traffic over the past decade. Social media has changed the way fashion diffuses. Brands should not ignore the tremendous influence of social media in our daily lives. Web 2.0 has brought richer forms of Internet advertising through social media, and with the increasing popularity of short videos, microblogs and other forms of content, the definition of ‘celebrity’ has also been expanded. Non-traditional celebrities or social media influencers have become the most active group of people on social media apps and increasingly play the role of the reference group.

This chapter aims to conceptually examine how perceptions of a customer experience with service robots are formed in a fashion retail context. The theoretical backbone is the integration of managerial and marketing view of human-machine interaction through Variety Information Model (VIM) and a psychological approach to the user adoption of new technologies according to Cognitive-Affective-Conative (CAC) model. The existing body of knowledge on humans’ reactions to service robots in a fashion retail context is enriched by proposing a new and multidisciplinary framework in which information units are the antecedents of customers’ experiences; synthesis schemes affect the cognitive experience; general schemes impact the conative experience; and categorical values are linked to the affective experience. The factors, from the customer’s side, conditioning the customer experience with fashion sale robots are thereby highlighted.

The perfect combination of social media and business models has completely reshaped the traditional shopping experience of people for fashion and luxury brands. Social commerce has become a major driver for the digital transformation of brand marketing. To create a virtual reality and immersive shopping experience for increasingly young consumers, enterprises often make use of various social media communication platforms and continually release live short videos for product introduction and reviews online. By providing conceptual clarification and definitions of social media, social networking site, and enterprise social media (ESM), this chapter proposes a corporate managerial perspective of operating ESM tools based on the technical features. In addition, the benefits and risks of the strategic use of ESM platforms for marketing context are stated. For chief marketing officers, this research provides theoretical references and managerial suggestions on how to build close relationships with internal and external stakeholders within an ESM sphere, as well as improve innovative activities to deliver corporate culture and brand value of fashion industry.

In the age of integrated marketing communication the brand identity is managed by a multitude of specialist agencies necessary for complex omnichannel presence, and new independent content creators have unprecedented power through digital distribution. Online influencer marketing is now at the core of fashion and luxury brand management. Content creators have become autonomous channels of communication; they require freedom of expression to ensure authenticity while maintaining their own personal brand identity. This chapter explores the fluency and dynamics of these complex and interactive marketing communication relationships and how agile management might contribute to ensure a consistent creative brand image.

The disruption of supply chains by political, economic and black swan (unpredicted) events has put environmental issues into focus. One of the first industries to experience severe pressure is the fashion industry, which could be perceived as a want industry and not a need. This brings into question the size of the industry and the want for too many clothing items, which requires the industry to shrink to reduce consumption. The fashion industry could re-engineer its supply chain to make it sustainable (beyond corporate social responsibility) and move towards co-value that acknowledges not only the positives of the value chain but also the negatives (harmful activities). Congruency between the fashion brand and the influencer will garner positive outcomes for the brand image, but sustainability must be at the front and back of the brand to maximise the reputation of the brand, especially for future consumers such as Gen Z. However, there are implications for jobs in the global fashion economy. The industry needs to consider the 17 UN Sustainable Development Goals (SDGs) and understand how they can be more effectively applied to fashion. Furthermore, the fashion industry needs to look at implementation of SDGs, so they move beyond a marketing concept.

While developments in digital luxury brand communication have led to several studies about the motivation of digital users to engage with luxury brands and the effect of online communication on consumers, few researchers have addressed the role of heritage within the digital environment. This chapter therefore responds to the call for research studies on how the unique characteristics of luxury brands are communicated in social media by analyzing specifically how luxury brands communicate their heritage on social media. The research results in a framework that categorizes online communication about the heritage of luxury brands according to four dimensions: The founder and his or her family, the link with the past, the processing techniques of the past, and the people who made the brand famous.

The internet has altered customer–brand interactions and service delivery. Online service failures are inevitable, but social media provides opportunities for efficient service recovery. In light of the lack of research on the drivers of customer satisfaction among luxury fashion customers, this chapter focuses on customer satisfaction in relation to luxury fashion brand customers and explores the motivations and barriers to satisfaction following a negative service experience. The chapter considers the range of recovery strategies that can be adopted and provides managerial and marketing insights for fashion and luxury managers seeking to improve customer satisfaction using various strategies.

The phenomenon of globalisation is an enhanced driver of fashion sales globally. Nevertheless, its continual growth will slow due to geopolitical factors. Globalisation has contributed to many successes in the fashion industry, but political opinion is slowing this process down. The question is whether globalisation becomes deglobalisation and how this will affect the fashion industry from supply chain, operations and marketing to logistics. The impact of deglobalisation on the value chain in the fashion industry will require a new perspective. Deglobalisation is about refining globalisation so that cultural and social issues feature more prominently in the globalisation construct; a fashion industry that reflects on this will help to resolve inequalities and improve the wages and rights of the people that work in developing countries. However, cultural change will require the fashion industry to accept the premises of deglobalisation and incorporate ethical leadership centralised on morality and fairness. Industry 4.0 has tools and applications that would help the industry on its journey so that all actors gain positive outcomes. With Gen Z and other consumers making purchase decisions influenced by the responsibility of the brand (suppliers, production and fashion retailers), there is momentum to move the dial on the fashion industry from sluggishness to change.

In the ethical consumption literature, the process of buying and selling luxury second-hand products on the online peer-to-peer platforms has recently captured the attention of scholars. The main motivations include empowering a financial transaction, the need to boost individual sustainable responsibility, and to be more authentic. In this research, we aim to better understand the consumer-seller “dual role”. We focus on the individual authentication process, which reveals the current “true-self” combining ethics with authenticity. In this study, we develop a conceptual model that is based on four constituent elements: integration, convergence, consolidation, and enhancing, through which consumption and ethical business converge in a perspective that is based on authenticity.

In different sectors, such as coffee, luxury consumption is growing worldwide. More common is affordable luxury coffee, but some products and brands can be considered high-luxury coffee. Which luxury dimensions do brands communicate? What about sustainable issues for high-coffee luxury communication? Indeed, sustainability is a crucial perspective for creating corporate value and reputation, most of all for new younger luxury consumers. However, more is needed to implement sustainability choices because it is necessary for stakeholders to perceive those choices as such. The role of digital communication has become essential. Focusing on the high-luxury coffee world, which is not well explored in the literature, this qualitative study aims to analyse how major high-luxury coffee brands communicate luxury and sustainability values. As a result, a comparative framework among different high-luxury coffees is proposed to understand the similarities and differences in sustainability communication dimensions.

The digital customer’s journey is characterised by many more ‘touchpoints’ (digital triggers and influences) than the conventional customer’s journey, for example, websites, chatbots, social media content and blogs, which help shape the shopper’s journey and inform their ultimate purchase decision. With increasingly widespread use of digital technologies, digital touchpoints extend beyond digital channels and ultimately influence purchase decisions before, during and after the shopping encounter. It is therefore imperative for marketers within the fashion industry to examine how the evolution of smartphones has influenced digital customer behaviours and choices in recent times. Mobile phone technology was initially used for communication purposes but has recently advanced to include additional features that have created a larger market, which has altered the purchase behaviours of customers. Smartphones to a large extent have redefined our identities and remodelled our perspectives on the online customer’s journey and shopping experience; hence, this chapter aims to provide insights for marketers and scholars in the development of marketing plans that consider digital customer interactivity with brands in a commercial and social context at each stage of the digital customer’s journey.

Over the years, gamification has found traction in the business world. Academic literature has described gamification as the use of game design elements to enhance non-game goods and services by increasing customer value and encouraging value-creating behaviors. Some examples of these behaviors are increased consumption, greater loyalty, engagement, and product advocacy. These goals can be achieved in particular by individuals belonging to generations Y and Z, who are at ease with the world of gaming. This chapter aims to illustrate the issue of gaming as it applies to the fashion industry and to consider specific cases of fashion brands that have invested in this innovative field.

This chapter examines the evolution of competences in the fashion industry in relation to digitalisation processes and the necessary support for knowledge and skills development. After a literature review of the transformation of competences in the fashion industry, the work investigates the level of digitalisation present in Italian fashion companies and the main types of support currently available in Italy, such as financial support, training, and public and private consultancy, that facilitate digitalisation. The study focuses on the territory of Prato, a historic industrial district of textile and clothing production, to understand the state of the art of the digitalisation of Prato’s fashion companies and their likelihood of developing the necessary skills in light of the public and private supports available. This work aims to verify the existence, adequacy, and shortcomings of tools that facilitate digitalisation and offer practical reflections on their use.