Hugo Boss teams with Uber for VIP omni-channel push

SUMMARY:

Hugo Boss is working with Uber to create a digitally-enabled omni-channel VIP experience for high end clients. But will this halt its online decline?

hugo bossWith planned store closures now a reality,  German fashion label Hugo Boss is making an interesting move to side with the sharing economy through a tie-up with Uber.

Working with the transportation firm, the high end fashion retailer has launched Boss On Demand, a multi-channel shopping offering. Boss on Demand consists of three core services:

  • Effortless Shopping – a partnership with UberCentral, which lets businesses pay for customers’ rides, provides a car to pick up clients and deliver them to the store appointment, where Uber will facilitate a hands-free shopping experience. UberRush will also deliver packages to customers’ homes, offices or hotel rooms.
  • Impeccable Service – Clients are able to book appointments with Boss stylists and associates, from wedding experts to private sales associates.
  • Inside Access – a customer loyalty scheme to incentivise and reward long-time and high-spending clients. Inside Access also provides opportunity to test drive new luxury cars and to golf at world-renowned events.

CEO Mark Langer says that such VIP omni-channel experiences are essential to offset slower business in stores:

In order to turn around visitor numbers, the expansion of omni-channel and other service offerings will be key. That is why we have made click-and-collect available in all freestanding stores in the US now, and a few days ago we launched Boss On Demand, offering customers a free pickup by Uber wherever they may be.

In the same way, we have Uber deliver package to customer homes, offices or hotel rooms. Other services include express deliveries out of our new store in the [mall] close to Wall Street, in-store stylist counseling and a program offering our most valued customers access to many events and gifts money cannot buy.

This highlights the importance to improve our digital proposition to make sure we effectively lead customers into our stores.

Expansion of the click-and-collect offering is also a top priority, he adds:

In the US, we made a lot of progress in this regard by completing the rollout of click and collect in all freestanding stores. In Europe, we launched the same service in September, starting with selected stores in Germany, Austria and the UK. In 2017, click-and-collect order from store and the convenient handling of returns across channels will be introduced in all European online markets.

Decline

But for all this, the underlying reality is that Hugo Boss online performance has been on the decline. One reason for this was the distraction resulting from the insourcing of the firm’s order handling process. These had been outsourced and managed by Arvato until the start of May. But bringing this in-house meant, according to Langer, that:

There was not enough management attention and time spent on further improving the online store. The upcoming relaunch of the site in October will address the number of weaknesses we are currently suffering from.

On the one hand we were quite successful in insourcing, however we have not upgraded our site in terms of functionality and other services as this is happening right now in a fast moving competitive environment.

Langer also cites an unexpected factor in the firm’s online issues:

From a more structural point of view we will also have to find an answer to the challenges posed by the growing importance of mobile.

The dramatic increase of the share of traffic coming from mobile devices has started to have a meaningful negative impact on our online conversion rate, meaning that sales are down currently despite ongoing traffic increases.

He adds:

One of the challenges that where we have to find the right answers that increasing the traffic or site is not coming from desktop anymore but mobile devices, smartphones, tablets. And here our site is not operating with the same converted rate.

We need to improve our conversion rate when it comes to visitors that come to our store via mobile devices. This has become the prime channel of visitors to our site and we are not yet at the same conversion rates for these visitors compare to people who hit more historic years come to our site by desktop solution.

What’s needed is an omni-channel strategy that accomodates new channels, but still drives high-end clients to the offline stores. This is taking shape, insists Langer:

Of course, online is of importance, but we think it’s a combination. It’s not a separate faced channel. We are in a very good position to benefit from the changes in consumer behavior when it comes to exploring brands and also to purchase from them. It’s not either or, it’s a combination of integrating omni-channel services into our store network but also referring to us around physical stores via the internet.

My take

Former CFO Langer has his work cut out for him in his new role as CEO. His predecessor left in February after a second profits warning. According to the Internet Retailer 2015 Top 500 Guide, Hugo Boss ranks at a lowly 304th place. The high-end nature of the Hugo Boss brand is one based on the in-store experience, making the development of a viable e-commerce strategy a challenge.

Image credit - Hugo Boss