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GUEST COMMENT The luxury ecommerce conundrum

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 store, and if possible, the ability to buy or reserve online and then pick-up in store. Live chat or a ‘call back’ function with an experienced consultant is also vital, together with personalised offers post-purchase such as invitation-only customer events.

Secondly, brands must design packaging that not only protects a product but also maintains a brand’s identity and creates a luxury experience at home. Luxury products deserve luxury packaging. Indeed, Robert Emmett, the founder of Emmett Shirts, a bespoke shirt maker with stores on the Kings Road in Chelsea, Jermyn Street in Piccadilly and online, believes that “at home is the new changing room.”

Luxury brands need to provide their customers with a beautiful in-home experience as they open their package and discover their purchases for the first time. By thinking carefully about the packaging design, brands can ensure the product is delivered in an innovative, high-quality package that functions perfectly by opening easily and protecting the item on route, but also enhances the brand’s reputation through post-purchase engagement. As packaging specialists, we work closely with our customers, considering the best shape, colour, prints and material to use which will reflect the uniqueness of a product and provide it with its exclusive character. We also have a broad range of printing and finishing techniques that create stand out from the crowd.

We are increasingly recommending customisation to our customers as these tools can really help brands engage with their customers post-purchase and add to the ‘home theatre’. Increasingly, marketers are choosing to brand the inside of the pack as a way to add that bit of magic at the moment of truth and further engage with consumers post purchase.

One example of a business developing bespoke packaging to support their ecommerce offering is Aquascutum, the designer of the iconic trench coat and a luxury retailer since 1851. Famed for its fine craftsmanship and technical innovation, Aquascutum recently approached DS Smith to come up with a new look pack, which could be used for home deliveries and in stores. Aquascutum’s packaging design needed to evoke the same reaction as its clothing and luxury goods and make an impression in the home to match the experience of visiting the flagship store in London. The end result was a sleek, elegant design which reflected the brand’s long heritage of quality craftsmanship, but the pack also addressed the realities of the contemporary supply chain.

Aquascutum was delighted with the new packaging and, what’s more, the new boxes have proved popular, with customers requesting extra boxes because they are so pleased with them. Crucially, we worked closely with Aquascutum from the earliest stages of development, meaning the pack delivered a range of benefits, including using fewer materials which resulted in significant cost reductions as well as being more environmentally friendly.

This brings me to my closing thought. A beautiful unwrapping experience doesn’t have to be environmentally damaging. Cleverly designed corrugated packaging which optimises the materials used and is itself 100% recyclable will enable high-end retailers to achieve packaging luxury and delight for increasingly sustainably-minded customers, without compromising on the high quality look that is synonymous with their brand.

Rob Carle is an ecommerce specialist, at DS Smith, UK Packaging

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  • DS Smith