With bricks-and-mortar stores closed for almost a year, research reveals that more than three-quarters (78%) of UK and US consumers would not have been able to indulge their love of luxury without online shopping.
Wunderman Thompson Commerce’s Living in the Lap of Luxury report – which surveyed more than 3,000 consumers in the eCommerce-savvy markets of the UK, US and China, on what drives their luxury purchase behaviour – found that close to half of UK and US consumers (44%) and Chinese consumers (46%) expect to spend more online in future when it comes to purchasing luxury goods.
Not only that, but entry level shoppers in the UK are already happy to spend an average of £477 online on a single luxury product, rising to £7,742 for mid-level shoppers and a huge £181,000 for the highest spenders.
For more on the luxury sector and how it has evolved, check out RetailX’s Luxury Sector Report 2021 here.
Amazon could yet emerge as a major player. Two-fifths (40%) of luxury shoppers in the UK and US have already shopped for luxury items on the eCommerce site and, in light of new initiatives such as the launch of its Luxury Stores mobile app to eligible Prime members, that number will only grow further still as the online retail revolution continues unabated. Currently, Apple remains the highest rated site for luxury shoppers in both the US and the UK.
In fact, despite more than half (55%) of UK and US consumers purchasing fewer luxury items altogether because of the COVID-19 outbreak, on average luxury spend online across all three markets climbed by 7% in 2020.
According to Hugh Fletcher, global head of consultancy and innovation, Wunderman Thompson Commerce: “Luxury shoppers expect a superior level of customer experience and exclusivity that, traditionally, has been difficult to replicate online. While they’ve arguably been the most shielded from the last year’s economic ups-and-downs, the desire to splurge has still been hampered by the need to stay indoors. With fashion accounting for a significant chunk of luxury spend, consumers have increasingly found themselves all dressed up with nowhere to go and with little reason to shop.”
Fletcher adds: “In the UK and US, Amazon’s role in luxury shopping is growing – from inspiration, to search, to purchase. And, as social distancing rules relax and lockdowns end, we can expect an uptick in luxury spending across the board that – for the very first time – will be facilitated by online channels as much as it will by the in-store experience. Ultimately, the research is clear that luxury spending online is a permanent change, not a COVID-related blip. What remains to be seen is whether eCommerce giants such as Amazon can extend their offering to meet this rise in demand, or whether luxury brands will move online in time to cash in on the change.”
Notably, physical stores still play a vital role in the customer journey for luxury shoppers. Almost half (47%) of US and UK luxury shoppers buy their products in luxury brand stores, rising to two-thirds (67%) in China. And it seems the product shoppers buy dictates which channel they use to do so – reiterating that an omnichannel offering is the most powerful of all.
High-end shoppers are most likely to buy fashion (82%) or technology (82%) online, closely followed by luxury holidays (81%), luxury experiences (80%) and luxury watches (79%), suggesting clothes stores and travel agents look to gain the most by digitally transforming their offering. At the opposite end of the scale, the same shoppers are least likely to buy jewellery (21%), home interiors or furnishings (22%), or luxury food and alcohol (21%) via digital channels.
Another step-change for the luxury sector has been the importance of sustainability to consumers in the “new normal”. Where once the sector was underpinned by contentious practices, a huge (84%) of UK luxury shoppers said sustainability was important to them when shopping, climbing to 96% for consumers in China and the US.