Online Selling Slowly Catching on among Luxury Brands

By November 27, 2012
Keywords : Smart city, luxury, Europe
Luxury 3.0

The internet should provide real opportunities for fashion and luxury brands, provided that they manage to effectively recreate the customer experience online. The rise of e-shopping is now pushing these brands to rethink their business model.

Fashion and luxury brands are now gradually positioning themselves on the internet and are making increasing use of e-commerce channels.  A report published by Enora Consulting on what the French business consultancy calls ‘Luxe 3.0’ reveals that online sales of luxury goods have been increasing by 25% year-on-year since 2008.  While annual online sales still amount to just €4.5 billion, a tiny 2.6% share of total luxury sector sales, Enora forecasts that by 2015 this will have risen to 20% of the market, bringing in €11 billion annually.  One reason why the online approach has been rather slow to take off in this sector is that management in the fashion and luxury business still generally do not have a profound grasp of digital methods. However, the size of the challenge is also clear: how can you recreate the magic of the in-store customer experience on an e-commerce site?  Nevertheless, nowadays these prestigious brands ought to be looking upon the online channel as an opportunity to be seized. 

A window of opportunity

In fact the market is in any case far from being saturated but the latest information and communication technologies provide an additional means for luxury brands to appeal to potential customers and create a buzz, as Mathieu Morgensztern, CEO of Digitas France, underlined in a recent interview with l’Atelier. The social networks have also become an important shop window, with fashion and luxury brands seeing the number of fans rising on average 136% per year.  And now the online shop should also be an essential part of the strategy, enabling the brand to reach a new type of potential customer, who is perfectly familiar with online shopping but might not wish to venture into a luxury goods store. Digital tools also enable interaction with the consumer and provide the means to develop business abroad. Still, the concept of the online boutique as a luxury consumer experience is struggling to take off. Recognising this, Enora suggests a number of ways in which the brand can try to recreate the magic of shopping at a luxury store.   

Recreating the ‘multi-sensory’ experience

Enora stresses that it is absolutely vital to create from start to finish an atmosphere, including decorative elements and music, in which the brand can really “tell its story” and highlight its telling features. Some aspects of customer experience (such as smell) cannot be transposed to the screen but web tools can help to create a rich universe around the brand. Panoramic 360º video enables the consumer to visualise the ‘object of desire’ up close “as if he or she were actually touching it”.  Moreover, an online site can also provide additional services that are quite unique, such as the opportunity to customise a product. Louis Vuitton for instance offers the option of placing a monogram on your luggage items, while Ralph Lauren lets the customer make his/her personal choice of colour and logo combinations on its shirts.

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