Luxury Law 2020 – Key Takeaways and Trends
Last month, members of our Retail and Consumer Markets (“RCM”) Group were in virtual attendance at the 2020 Luxury Law Summit (Europe) (“Luxury Law”). Luxury Law presents a unique opportunity for in-house counsel, external legal advisers, and brand leaders in the luxury space to exchange industry insights, discuss the opportunities and challenges specific to the luxury space, and network.
This year’s Luxury Law once again generated insightful conversations and productive dialogue – much of which is relevant not just for the luxury sector, but for the retail industry more broadly. We’ve highlighted below some of the most valuable take-aways arising out of Luxury Law for companies in the sector doing business in Canada.
- The Intersection of Luxury and (Online) Customer Experience
One of the themes to have emerged most consistently out of Luxury Law was the degree to which luxury, and the principal value offered by luxury brands, is based on delivering premium customer experience. Even prior to the global COVID-19 shutdowns and quarantines, the focus was increasingly shifting to the online customer experience, and was accelerated by the COVID-19 related retail closures. Online windows have increasingly become critical extensions of brand experience, as opposed to simply a supplementary sales channel or marketplace.
Brands and retailers are actively leveraging rich content online channels that open up new modalities of not only selling product, but also of connecting with customers and extending the opportunities to interact with them in a way that further solidifies customer experience. We can expect initiatives such as digital clientelling (i.e., understanding your customers’ needs and wants in the online world), the integration of virtual reality into e-commerce, and shoppable livestreams to be at the fore of this move towards rich content channels.
What the COVID-19 shutdowns have made clear is that brands and retailers who already had well-established online presences were more strategically positioned to weather the pandemic. That said, the consistent messages from brands and retailers at Luxury Law was that even as we emerge from global shutdowns, a doubling down on online presence as an integral extension of customer experience will be crucial.
- The Value of Data
Closely tied to the renewed and accelerated emphasis on deepening the online customer experience is the consequent data collection opportunities these online channels present. As articulated by one speaker at Luxury Law, “Next to your brand, your biggest asset is your data.”
Curated offerings, digital clientelling, and shoppable livestreams all create valuable opportunities for brands and retailers to gather information with respect to their customers’ preferences, habits and behaviours. Ultimately, this data can be integrated back into the feedback loop to provide customers with more effectively-tailored customer experience – all contributing to higher conversion rates at checkout and entrenched customer loyalty.
It goes without saying that with those data collection opportunities comes significant responsibility. For Canadian brands and retailers, the protection of data collected from consumers in compliance with applicable federal and provincial privacy legislation is paramount, as is ensuring that the requisite consents are in place prior to collection. Compliance with Canada’s Anti-Spam Legislation and provincial privacy laws must remain front of mind as the retail industry engages with new and increasingly personalized online shopping modalities.
- Verifiable Corporate Social Responsibility
Rather than relegating consumers’ concerns with respect to sustainability, transparency, diversity and inclusion, and social responsibility to the backseat, many of the brands participating in Luxury Law reported that in the midst of the COVID-19 pandemic - more than ever - consumers have adopted a more considered, deliberate, and thoughtful approach to their purchases. Discretionary spending has been targeted at brands that reflect consumers’ values and align with their principles.
This has in turn been accompanied by a demand for transparency and accountability in relation to the causes that brands and retailers align themselves with publicly. While brands have an opportunity to gain market share by adopting proactive positions in relation to ethical and societal issues, brands and retailers can expect increasing scrutiny from all stakeholders (shareholders, customers, regulators, and the public) of supply chains, practices, and the integrity of the ethical stances they take in public.
Stakeholders are demanding that brands and retailers produce data substantiating actual commitment and contribution to issues such as sustainability, diversity and inclusion and labour equity. Increasingly, relying solely on certifications by a third party may be insufficient. Instead, the use of blockchain as a means of tracing supply chains and sustainability initiatives is gaining traction in some quarters, as is the institution of key performance indicators to ensure brands and retailers are doing more than paying lip service to the causes they promote.
From a regulatory perspective, compliance with Canada’s proposed Modern Slavery Act will further feed into this trend, requiring that companies ensure the products they import into Canada have not been manufactured using child or forced labour. Specifically, the Modern Slavery Act would, if implemented, solidify Canada’s international commitment to combat modern slavery by imposing supply chain obligations on certain businesses that rely on human labour in the production of their goods. Similarly, institutional investors are employing increased scrutiny with respect to the environmental sustainability of the practices employed by prospective investments. Finally, the last several months have underscored the degree to which consumers and the public expect the brands and retailers they support to cohere with their values – both in terms of public messaging and the initiatives they implement in response.
McCarthy Tétrault was very pleased to be recognized as this year’s “Best New Luxury Law Firm Practice” at the Luxury Law Awards presented at Luxury Law.