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The Last Bastion Of Retail Finally Heads Online

For retail brands, “luxury” used to mean “not available for sale online” … but that part of the definition is beginning to change.

Six percent of luxury good sales now take the form of eCommerce, compared to 2009 when the number was only 2 percent, reports The Wall Street Journal.

Nathalie Remy, head of McKinsey & Co.’s fashion and luxury practice, told WSJ that consumer demand has compelled the rise in luxury brands’ availability online. While high-end names had previously abstained from participating in eCommerce out of worry that it might create brand dilution — in addition to security concerns and the notion that desired customers perhaps were not, by and large, technologically savvy — that rationale has been overridden by the voice of the customer, and luxury brands are at last beginning to join the Internet Age.

Mentioning that brands such as Fendi and Chanel are trying their hands at selling online, Remy told WSJ that eCommerce is expected to make up 18 percent of luxury goods sales by 2025. That expansion, she added, will come in large part directly from the websites of the luxury brands themselves, as well as from department stores, which combined to comprise 44 percent of online luxury sales in 2014 (which grew from 36 percent in 2011).

“They started later, and they are catching up,” remarked Remy.

One of the very facets that defines a luxury brand — limited availability — could prove to be an obstacle as the companies move into the eCommerce realm. As the report points out, luxury retailers frequently ship in very small quantities and keep less inventory on-hand than do their mass-market competitors — and even that inventory is rarely kept in one place, instead being spread out in various showrooms worldwide.

To compensate for their minimal quantities available online, luxury brands may have to add a flourish to the offerings they do have, such as customized delivery options that play into the “VIP” nature of their reputation.

After all, as Remy put it to WSJ, the customers of luxury retailers have set “a very high bar in terms of experience — they want perfect things.”

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