Ecommerce continues to present a conundrum to luxury brands. How can they harness the potential of online shopping and continue to support brand value outside of the controlled bricks and mortar environment? Luxury brands traditionally succeed on the basis of their exclusivity, something that internet shopping removes. After all, there is nothing exclusive about the web – anyone, anywhere can visit an online store. But, the global scale of online shopping is something that is becoming too big to ignore.
According to Technavio, the global luxury ecommerce market was valued at $21.43 billion in 2014 and it projects it will reach $41.76 billion by 2019. In the UK, ecommerce still only accounts for a small share of luxury revenues with a report by McKinsey & Company indicating that it made up 5-10% of overall revenue. Interestingly, this is the highest penetration of online luxury sales in the world, equalling the online reach of France and Italy combined. However, there is clearly so much more room to grow in this area and brands are starting to realise this – when asked by McKinsey about mistakes they had made over the last five years, 57% of luxury brands felt they had underinvested in ecommerce.
This past reticence is understandable. So much of what ecommerce represents – unbeatable prices, speedy turnaround, and accessibility to all – is the complete antithesis of a luxury brand strategy. Luxury brands have typically built their brand and desirability through creating opulent in-store experiences where every moment of the customer journey and brand image is tightly managed. A glass of champagne is handed to the prospective customer as they enter the beautifully lit store; a warm and knowledgeable salesperson guides the shopper around, making small talk and little observations. The shopping encounter ultimately ends with the customer parting with thousands of pounds and a warm glow! So how can luxury brands remain relevant in the modern retail environment, decrease their reliance on in-store experiences and communicate their unique offering online?
First and foremost, luxury brands must guarantee a superior experience online, including seamless customer service, free shipping, free returns either by post or in…