Close this search box.

GUEST COMMENT The growth of luxury online retailing

This is an archived article - we have removed images and other assets but have left the text unchanged for your reference

By Scott Allan

Online shopping is not something that has been associated with the luxury and the high end fashion market in the past, but last month the FT reported that Altagamma, the Italian luxury goods association, and consultancy McKinsey, are launching a report into the digital luxury experience that suggests that in fact digital is key to the luxury sector.

The study surveyed more than 300 luxury brands, including LVMH, PPR and Richemont, plus more than 700 websites and 2.5m online comments, including those from Twitter and Facebook. Researchers also undertook 2,500 interviews across the US, China, UK, France and Italy. Key findings include:

  • About 15 per cent of luxury sales directly driven by digital (€25bn)

  • As much as 20 per cent of in store sales directly influenced by digital (€34bn)

  • Luxury consumers visit more than four sites to help them make the right choice

With this in mind, it’s worth taking a look at working with luxury brands to drive sales online, and how the affiliate marketing channel can be aligned with this growing opportunity. As the report reveals, luxury consumers visit more than four sites to help them make the right choice, so ensuring your brand appears on a number of sites is crucial. The consumer buying cycle is complex, and brands must be in the right place at the right time to prompt a consumer to make a purchase. However, it’s worth noting, when working with luxury brands in any capacity, that they are fiercely protective of their image. Brands and retailers should look to form good relationships with publishers that consumers rely on, and that can also be trusted to adhere to strict brand compliance requirements. This will allow luxury retailers to reach the sales volumes they desire, while still maintaining their identity and status online.

Key drivers of luxury online retailing

Many factors affect and drive the growth of the luxury segment online. Below are five of the most important influences and some tips to help retailers, advertisers and publishers make a success of the luxury market, and so profit from its current expansion:

1. Consumer trust. Luxury consumers are used to the best products and the best service – after all, they do pay a premium for these things. Over time, luxury consumers have become more comfortable shopping online as the overall site experiences continue to improve, and the brands they know and love become available online. These consumers expect the luxury experience to translate from offline to online, and demand great customer service and flexible return policies.

2. The right product, at the right price, at the right time. Discounting, coupons, and deals are not normally the hallmark of luxury online retailing; brands do not want their name and products devalued, and luxury consumers do not scour the internet for discount codes. However, that’s not to say that luxury shoppers don’t want great value, because they do. For them, it’s about finding the right products, at the right price, at the right time. Retailers must work with publishers and partners that not only understand luxury trends, hot brands, and seasonal patterns, but also the online behaviour of these consumers (which is very different to offline).

3. The evolution of technology. Improvements in website design, graphics and the display of luxury products online allow consumers to quickly and easily search through hundreds of brands and zoom in with amazing clarity to see the specific features of a product, which is significant when you’re making expensive purchases. Devices such as tablets and smartphones are well suited to this rich media experience, which consumers can now enjoy more conveniently and in more comfort than just at a desktop computer.

4. Shopping anytime, anywhere. We cannot talk about the evolution of technology without acknowledging how tablets and smartphones have revolutionised the way we act and interact online. We are now online constantly – the on and offline worlds are becoming more integrated all the time. Consumers now expect to be able to connect with their favorite luxury brands wherever and whenever they want. Luxury retailers need to work to make sure the end-to-end shopping experience is optimised for conversion on desktop, iPad and smartphones. If you are not at least measuring the traffic from each of these devices, you are already behind the curve.

5. Luxury consumers are citizens of the world. When you consider the luxury audience, keep in mind that they live and travel all over the world. Luxury retailers should tap into resources that are set up to facilitate commerce in this complex global market, such as advertisers and publishers with advanced e-commerce capabilities to support multiple currencies and languages, combined with the most flexible shipping and customer service policies.

As online luxury grows and evolves there are tremendous opportunities for advertisers and publishers to reach their target audience and to find new customers. With the Christmas season on the horizon, keeping these trends in mind will help attract and keep online luxury shoppers.

Scott Allan is Rakuten LinkShare’s global senior vice president of marketing

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on