E-commerce retail platforms have evolved from experimental websites to slick brand storytelling platforms. Innovation in e-commerce strategies is now ubiquitous; a finely tuned combination of product discovery, service and omni-channel experience.
Slower to start, luxury brands are now catching up with leading multi-brand retailers such as Amazon and ASOS and deploying their own smart services that combine the best of online and offline shopping.
Why the hesitation?
Part of luxury’s e-commerce lag is due to brands’ reticence to take their name online, for fear of compromising exclusivity or diluting brand DNA. Many luxury brands have been carefully building an edited e-commerce offering, with latecomers such as Celine and Chanel only launching online sales in 2018.
Fuelling this reserve, Bain reports that only 10% of luxury sales are made online, while McKinsey research found that in-store experiences are a deciding factor for 9 out of 10 luxury purchases by Chinese shoppers.
What’s at stake?
According to Statista’s Luxury Goods Report, online luxury sales are “projected to grow at twice the market rate and capture 18% of all sales revenue by 2023.”
While e-commerce platforms are still a fledgling sales channel, they also serve an important role in product discovery and brand engagement. As McKinsey noted, “the typical luxury shopper now follows a mixed online/offline journey” and according to the BCG x Tencent 2019 Luxury Study, 82% of luxury purchase journeys are Research Online, Purchase Offline (ROPO), much higher than the global average.
Indeed the domination of the KOL and social networks endure – McKinsey China reports that Chinese consumers require up to eight touchpoints before they buy, with online inspiration and approval proving an integral part of the process.
There’s a complex interplay between brands’ different channels, and the most successful strategies unite the best of all worlds – the inspiration and excitement of social media, the immediacy and brand immersion of physical stores, and the broad scope of online shopping.
Know how to do it real and right
With omnichannel key to e-commerce strategy, luxury brands are starting to set the bar. New layers of service to the online shopping experience mirror the feeling of delight and support customers receive in-store, while digital channels are also being used tactically to complement the bricks and mortar experience:
Personalised product recommendations are becoming more common, taking the experience of shopping in store into the online environment. Italian e-tailer Luisa Via Roma offers personalised search results, based on customers’ purchase history, helping them to focus on products in their price bracket. The personalised functionality has increased average spend by +15% per customer.
Luxury department store Saks Fifth Avenue has used its online platform to give customers the option to browse through a curated array of products after taking a quiz about their style, silhouette and colour preferences. Shoppers can then aggregate their recommendations on a list to share online.
Click-and-collect has become a valuable tool in bridging off- and on-line experiences. At its New York flagship, luxury department store Nordstrom has allocated some of its most productive first-floor retail space to express online collections, returns and alterations for online orders. Meanwhile, Louis Vuitton’s complimentary service now enables online shoppers to collect or return items in-store, while Burberry’s click-and-collect is said to account for 15% of its online sales.
– Premium delivery
Fast shipping and easy returns are offered by e-tailing giants from ASOS to Amazon, and luxury consumers expect nothing less. In China, online orders are becoming more premium, with China’s luxury portal Toplife offering “white-glove” delivery from handsome and well-educated gentlemen. Meanwhile, Louis Vuitton’s complimentary delivery service offers a ribbon-wrapped, same day delivery by a driver in an electric vehicle, ‘dapperly’ turned out in a suit.
– VIP service
A premium service for high-value customers has come to be expected in the world of luxury shopping and now luxury brands are using digital insight to deliver customised experiences.
Clothing brand Frank and Oak’s loyalty program recognises when one of its high-ranking loyalty program members walks into the store; their mobile app activates a nearby Bluetooth beacon, alerting the store manager who will personally greet the customer. Mr. Porter, brother site of Net-A-Porter, offers premium multi-channel assistance in select cities to its high-spending VIPs, with at-home shopping consultations, and a wait and try delivery.
URL plus In Real Life
As e-commerce becomes a reality for more consumers, luxury brands need to ensure they are offering the best elements of online and offline channels in every retail experience and follow the path of the internet giants that consumers are used to. Convenience is becoming a more important part of the luxury shopping experience, and omnichannel strategies such as click-and-collect can help drive custom.
Meanwhile, the process of ordering online needs to incorporate the kind of expertise and personal service that shoppers gain in-store. As in other retail sectors, the “last mile” – the delivery from distribution hub into consumers’ hands – continues to be a key battleground. Offering a more luxurious and personalised delivery and after care experience could help digital retailers to offer real-world benefits.