TAGS: AI CX Merchandising Online Shopping Retail
Understand the secrets to success in this exciting arena.
There are plenty of ways that luxury brands differ from ‘regular’ fashion brands. Of course, price point and target audience are two very significant ways. Catalogue size and brand recognition/reputation are others. Sales objectives and brand strategy can be vastly different in these two markets. But there’s one sure thing that they have in common: an optimised eCommerce experience can make all the difference in conversion and customer experience.
While fashion brands typically rely on volume sales, premium brands – by their very nature – cannot. ‘Luxury brands focus on exclusivity and brand experience,’ explains Vincent Perrin, Digital Consultant at Attraqt Fredhopper. ‘Their target audience is much smaller, and has a very unique set of expectations. So it makes sense that luxury brands are more hesitant to enter into the eCommerce arena. And when they do, it is clear that their overall online strategy will be different than a fashion brand’s.’
Around 40% of luxury brands still don’t have an online shop. They primarily cite the desire to maintain exclusivity or protect their brand identity as the reasons why. But studies show that Millennials are a growing demographic for luxury products. ‘Millennials are the first generation of digital natives,’ Vincent says, ‘so it’s only logical that they would shop for their luxury goods the same way they shop for everything else – online and with their mobile phones.’ Luxury retailers who want to capture this lucrative young market will need to get on board with eCommerce.
It is estimated that only 5% of all luxury sales occurred online in 2014. But that number is expected to grow to 9% by 2019 – to an estimated €25.2 billion in sales volume. And that’s just the beginning. Within just eight years, online sales in luxury products has the potential to reach €70 billion or more. Reason enough to start to build an online presence now. ‘Another thing to consider is that studies show that the online experience influences up to 60% of luxury sales decisions,’ Vincent says. ‘So even if luxury customers are buying offline, their online experience most definitely has an impact.’
So how can luxury brands successfully navigate these complicated waters? How can they remain exclusive and safeguard their brand, while also taking advantage of the potential goldmine that eCommerce makes available? ‘The most important factor is to integrate eCommerce into the overall strategy,’ Vincent says. ‘The web shop shouldn’t be a separate element of marketing efforts, but rather an integral part of the overall picture.’ Luxury brands often know their products inside and out, and they typically have a very clear vision of how and where their products should be displayed. All that’s left is to translate that vision to the online environment. ‘Of course, there are also digital interaction opportunities available in the stores themselves,’ Vincent adds.
The question is no longer whether a luxury brand should start an online shop. It’s now merely a question of when and how.With the major influx of online sales that’s expected, time is of the essence. ‘And now more than ever, luxury brands need partners who truly understand their unique needs and expectations,’ Vincent says. ‘A great strategy includes choosing experienced partners with unique retail knowledge and a robust, flexible, scalable product that can help luxury brands translate their offline experience into their online shop.’
Learn more about how to optimise online luxury shopper journeys in Attraqt's Luxury Report.