CASE STUDY — El Palacio de Hierro

Redefining Luxury for the Digital Generation

To attract younger consumers, Mexican department store El Palacio de Hierro retooled its online presence, adding personalization, tailored experiences, and social feeds.

303% Overall ecommerce revenue increased
374% increase in revenue from mobile devices
57% Overall conversion
rate improved
107% Desktop devices’
conversion rate improved

Business Environment

Once the ne plus ultra of shopping, luxury brick-and-mortar department stores have been adapting to changing times as of late—even before the COVID-19 pandemic resulted in stay-at-home orders worldwide. While consumers of a certain age are attracted to the spectacle and concierge-level service of these meccas, younger generations opt for cost, choice, and convenience—the hallmarks of online shopping. In Mexico—where the average age is 28, and 40 percent of the population has a cell phone—these traditional stores must develop an ecommerce presence to match their customer’s needs.

Challenge

With a flagship store in Mexico City and more than a dozen outlets throughout the country, El Palacio de Hierro (EPdH) is the biggest player in the Mexican luxury market, selling everything from handbags and home goods to spa services and gourmet food. EPdH enjoys great brand recognition, but research showed that most Mexicans view the company as relevant only to older, high-income individuals. The imagery and haute couture emphasis on its ecommerce site reinforced this perception, and company leaders were aware that the user experience needed to evolve in other ways as well. Astound Commerce’s challenge was to digitally transform EPdH’s ecommerce presence—and by extension, its business—so that it appealed to a wider, more youthful range of customers yet maintained the brand’s luxury reputation.

Strategy

We realized that to achieve this aim, we needed to update the technical capabilities of EPdH’s website and, on a broader scale, redefine what modern luxury is. Most pressing was the website’s legacy systems, which were cumbersome to manage. Lacking automation, the site did not support omnichannel features, raising challenges for marketing campaigns, and order fulfillment. Site navigation was confusing, and the rigid system of content modules offered little opportunity for visual variety or editorial context.

Execution

Reimagining the site’s customer service and back-end capabilities, our strategists, architects, and designers added features that would allow EPdH to emotionally connect with its customers across all touchpoints. Our research concluded that personalization and choice were key to a younger demographic, so we focused website content and messaging on relevance and convenience rather than price or brand. Replatforming the site using Salesforce Commerce Cloud, we integrated a new order management system (OMS) that improves inventory accuracy, product delivery, and the ability to run promotions. We utilized Salesforce Page Designer to create a suite of crisp, modular page layouts for slideshows and features, with content and images easily switched in and out.

Results

Not only did the new platform stabilize the site’s back end, but it also standardized systems, expanded functionality, and turbocharged efficiency. Customers now enjoy highly visual site journeys, with features encouraging repeat visits. Media-rich pages convey a sense of luxury, while a mobile-friendly design courts the Instagram demographic. Multichannel experiences based on campaigns, sale periods, and entry points romance customers, improving retention, lowering customer acquisition costs, and providing valuable user insights. (Data collection will become even more robust in the next phase when we integrate the Salesforce Einstein artificial intelligence platform.) With the new system, EPdH has more freedom to create content and establish itself as a fashion authority across a wider range of styles and price points. In subsequent development phases, we will help EPdH entwine digital experiences with in-store ones to continue to remake luxury for older and younger customers alike. We also will be integrating EPdH’s sister businesses, including its furnishings subsidiary Casa Palacio and gift registry Celebra, into the site. In the two weeks since the Phase 1 launch:

  • Overall ecommerce revenue increased 303% versus the same period last year
  • There was a 374% increase in revenue from mobile devices
  • The overall conversion rate improved by 57% versus the same period last year
  • Desktop devices’ conversion rate improved 107% versus the same period last year
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