Prada has been transforming its e-commerce business and prioritizes the digital customer experience.

This Italian family luxury brand has installed artificial intelligence chatbots to quickly solve customer problems.

Prada uses virtual reality to introduce and engage consumers with exciting experiences.

Prada seems to be everywhere recently. In October, the Italian luxury brand opened a vegetable market in Shanghai. Later, it launched the Prada On Ice series at SKP Atrium in Beijing. Then it announced the opening of new physical stores in Austin, Texas and Baltimore-DC, both of which attract a large number of Asian shoppers.

Prada exclusively launched the "Prada On Ice" series in the Beijing SKP Atrium before the 2022 Beijing Winter Olympics. Photo: Courtesy of Prada

However, if Prada does not find the right balance between digital and physical contact, this marketing mix may bring the danger of "overexistence". This is especially true today, the Italian brand is transforming its e-commerce business and prioritizing the digital customer experience.

In November last year, Reuters announced that Prada is expected to participate in discussions between Cartier owner Richemont and online retailer Farfetch on the launch of a joint e-commerce platform. The acquisition of a minority stake in Yoox Net-a-Porter (YNAP) will optimize Prada's digital footprint. In addition, it can help Prada achieve its mid-term sales growth target of US$5.1 billion (4.5 billion euros). At the investor introduction meeting, Prada also stated that its goal is to double its total digital sales within this period of time, reaching 15% of retail revenue.

At the same time, Prada's digital retail footprint has been growing organically. According to the company's 2020 fiscal year report, Prada's e-commerce sales increased by 200% last year. This positive momentum continues even in the first half of 2021, when digital sales grew 100% year-on-year, and the industry currently accounts for 7% of retail revenue.

According to the Fashion Law, the COVID-19 pandemic has triggered a shift to digital shopping, forcing Prada to strengthen its omni-channel strategy. This new approach has helped luxury brands to withstand competition from digital-first retailers and domestic luxury companies that are more likely to interact with Chinese consumers.

Prada emphasized the importance of digital channels in China because it pointed out that its Weibo hashtag #PradaSS21 will have 170 million views in a single day in 2020. In addition, Prada is very popular on the user-generated content platform Xiaohongshu, and the Italian brand “is one of the most mentioned brands on the platform.” So, how does Prada increase its e-commerce sales? ?

In 2019, Prada opened digital stores in luxury e-commerce Secoo and Chinese e-commerce giant JD.com. A year later, it opened Prada and Miu Miu flagship stores on Tmall.

The Italian luxury brand has accelerated consumer participation by launching products and capsule collections and prioritizing personalized brand experiences. For example, it launched the Timecapsule series, showcasing limited edition products, such as wool sweaters that are only available 24 hours a day.

In addition, Prada has just launched the official account of Xiaohongshu, allowing the brand to appear on a series of Chinese social platforms, including Weibo, WeChat and Douyin. In addition, it will upgrade its WeChat pop-up store to a long-term electronic store with enhanced online services on December 16. On December 18th, Prada will launch PradaBucketChallenge on # Douyin with its pop-up store. This challenge invites users to wear Prada hats, especially its iconic black Re-Nylon bucket hat, and share how it "shaken" their emotions. Many celebrities and top influencers are expected to accept this challenge.

Prada Timecapsule launches an exclusive product on prada.com on the first Thursday of every month for a limited time of 24 hours. Photo: Prada

Prada has overcome supply chain risks by integrating JD’s inventory and Prada’s internal inventory. This model promoted the retail sales of Prada and Miu Miu, bringing in more than 47,000 US dollars (300,000 RMB) in revenue between July 29 and August 13.

"Due to inventory consolidation, consumers who shop online at Prada and Miu Miu flagship stores on JD.com will also get a wider range of products," JD.com press release said.

AI-driven chatbots and automated customer service 

Nowadays, consumers demand 24/7 attention and immediate response to their inquiries. Fortunately, AI-driven solutions can enrich the customer experience and quickly respond to changing consumer needs.

Recommended reading How luxury brands use technology to win customers Adina-Laura Achim

Engati said that the main reason for shopping cart abandonment is unanswered questions. According to Forrester, 53% of online shoppers may abandon their shopping cart if they don't get an instant response.

Prada has installed artificial intelligence-based chatbots on their website, which are programmed to solve customer issues related to purchases, deliveries, and returns. If the question is too complex or too specific to be answered by the robot, the customer support agent will take over and assist in the inquiry.

VR, 3D and AR marketing campaigns

Prada also uses virtual reality technology to introduce and attract exciting experiences to consumers. Through VR headsets, shoppers can "dynamically touch and explore branded products."

Prada uses VR technology to let consumers get a closer look at its latest series. Photo: Prada

In addition, its AR and 3D technologies have been integrated into the brand's sales and marketing strategies. During the Lunar New Year, Prada launched the Enter 2021. New Possibilities event, inviting fans of the brand to open the door to the New Year and share their determination in the coming months. The event invited singer Cai Xukun and actress Chun Xia and other celebrities to shoot, starting a symbolic journey in 2021.

Daxue Consulting stated that shoppers can write down New Year's wishes by using the Prada applet, and activate multiple AR filters on Douyin to share with friends, thereby making their New Year's wishes more real.

AR/VR, e-commerce, JD, prada, supply chain, Tmall, yoox net-a-porter

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