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Palexy's latest product aims to usher in a whole new ballgame for luxury retailers

by Anh H. Nguyen

Last weekend, I went shopping at an upscale boutique as a (very) occasional treat. For the sake of anonymity, let's call it C. Once I had picked out a beautiful and utterly frivolous necklace, the sales assistant asked me if I had ever been here before. In the past, I had bought from C. from time to time: a pair of shoes here, some sunglasses and a bag there. As a matter of fact, the people working there already have me on their mailing list, regularly sending me Christmas cards, invitations to their private shows, and tantalizing previews of upcoming collections. And when I go abroad, I usually make a point to visit C's overseas stores for a broader selection of goods and better pricing. This brand already possesses a good deal of my personal information except for a crucial one: who I actually am.

In 99.9% of cases, this would be a non-issue, or an exceedingly first world's problem at the very least. In 99.9% of cases, only extremely spoiled, entitled customers would demand the employees to recognize them as return shoppers, much less greet them by name or know their preferences. Many people who go shopping actually want the bare minimum amount of interaction with store employees, preferring to browse alone and only involve the staff at the last stage, checkout. But this firmly belongs in the 0.1% of situations. This brand is the epitome of luxury retail, the definitive French fashion house. C. is among the handfuls of establishments that still produce haute couture, the ultra high-class type of clothing tailor-made for an extremely selective group of women: it is estimated that there are no more than 4000 haute couture clients in the world. C.'s boutiques occupy the most desirable locations on the planet: Champs-Élysées, Bond Street, Ginza, Wangfujing, or in this case, Dong Khoi Street. Their prices are exorbitant: a small bifold wallet may cost upward of 1000$ USD, while a leather bag will set you back thousands of dollars.

This leads to my other point: the above scenario is by no means ideal, from both the customer's and the brand's viewpoints. Luxury retail is a different beast from other types of retail and has its own set of rules. Customers who shop at C. and other prestigious fashion houses, either regularly or as a once-in-a-while indulgence, do it for reasons beyond the utilitarian. Certainly no one has ever truly needed a brand name scarf - a normal one keeps you just as warm. People buy luxury apparels and accessories for a multitude of motivations: trends, bragging rights, status. And with the second-hand luxury market thriving, many still buy high-end fashion for the in-store experience. Luxury goods demand luxury services to match, and customers revel in the dedicated attention as much as the products themselves. In other words, customers go to luxury boutiques not only to dress their bodies but also to soothe their souls and forget about the mundane world for a while.

And brands, high-end brands at least, strive to scratch that itch. In the olden times, esteemed customers would arrive at the atelier to view the clothes on live models and get fitted individually with the newest styles. Luxury brands nowadays try to replicate the exclusive experience as much as they could by seating customers on plush sofas, serving them mineral water and champagne, and putting beautiful touches on the packaging. Luxury shopping as an activity could be intensely enjoyable and entertaining: the stores themselves are often designed to perfection, the displays flawless, the sales assistants invariably accommodating and polite. But customer services are not truly luxurious unless they are personalized.

A private viewing room inside a high-end boutique, reserved only for high-profile clients.

All luxury boutiques have it: a roster of the most loyal customers whom the sales assistants know by sight, whose likes and dislikes are memorized, who could order special items ahead of time, and countless other intimate instances that elevate them from mere shoppers to a kind of royalty, if not by blood, at least by means of money. Sales assistants often are trained particularly for this: to cultivate long-term relationships with customers through handwritten letters and texts and emails, with birthday cards and even presents, to make them feel important and happy and pampered. Many luxury sales jobs are commission-based, which gives sales assistants the proper incentive to be relentless in this art. The networking goes both ways: while sales assistants have their treasured golden geese whom they guard jealously, many customers also have favorites and specifically request their assistance every time. Of course the stores benefit from and take great care to encourage this mutual rapport; it is a win-win-win structure all around.

But it is a precarious system. A sales assistant could accumulate many prolific contacts through years of experience, but this knowledge mainly lies with him and may easily get lost if he has a few days off or quits for good. In that case the customers with whom he was so chummy would practically become strangers to the brand. While their data still exist in the store system, their faces would be unfamiliar to other store employees and the level of services they get would be disappointing compared to what they have come to expect. And the brand will most likely experience sales losses as a result.

Palexy has the answer in the form of an alternate process. By using the ubiquitous in-store cameras combined with facial recognition softwares, this setup, named Store Wizard, could instantly identify return customers along with their past shopping history and preferences without relying on human memory, and notify the sales assistants as soon as they walk in. This would benefit customers tremendously by ensuring a more uniform level of services and be a godsend for store employees. Not only could they give return shoppers a warm welcome despite never having laid eyes on them before, they could look at past purchases and inquiries to make appropriate recommendations. "Lady K. asked about that pair of nude slippers last time - let's give her the good news that they are back in stock! And I see that lady J. bought a bunch of pearl jewelries already, perhaps she would like some pearl-encrusted bags and shoes to go with them." This concept is known as Omotenashi, a kind of elevated, mind-reading customer care reserved for the highest echelon of the service industry.

As for the luxury brands themselves, this setup would allow them to maximize both sales and customer satisfaction at each store. Furthermore, by installing it on a wider scale, brands could connect customer profiles across stores, cities, even nations. With the help of AI facial recognition technology, a store employee in Paris could serve illustrious customers from China with the same zeal and professionalism he shows his local ones. Multi-brand groups could capitalize on this further still by seamlessly cross selling between brands, giving shopping sprees a whole new meaning. A customer could buy a miniskirt from brand D., then walk in P. a few doors down and be offered a matching jacket without missing a beat. And once brands start connecting the physical stores to the online world, the beneficial implications of such a setup would be truly endless.

Not long ago, venerable fashion houses were reluctant to embrace technology for fear of forfeiting their time-honored values: outstanding quality, classy impression, and impeccable services. However, once it became apparent that technology advances only serve to highlight and enhance these qualities, luxury brands started rapidly changing to get with the times. This newly developed AI technology with its most promising prospects for luxury retail shows all the signs of becoming a game changer.



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