Luxury Goods and the World Wide Web

We've all walked by and marveled at the sleek, plush interiors of luxury stores like Chanel and Dior. Slightly intimidating and all around impressive you know that for the right price you'd be guaranteed a premier shopping experience. And as members of the digital age, it would make sense to expect this experience to be expertly translated to the brand's webpage as well, allowing for a different but equally interactive and engaging time. But as eCommerce continues to grow by double digits year after year, a striking percentage of luxury brands are noticeably absent. That's not to say these brands do not have websites, they certainly do, but their goal is to drive consumers to their brick and mortars, forcing them to make purchases in-store as if it were thirty years ago. With the internet offering broader distribution and instant access to a wider geographical market, why are so many luxury brands seemingly forfeiting their opportunity to expand sales?

Celine boutique in New York

In the late 2000s Oscar de la Renta made the leap into eCommerce with extremely low expectations. The company believed that online purchases would include only less expensive goods like accessories and beauty products. But when orders started rolling in they were shocked to see that not only was their core Ready to Wear moving but they were also seeing orders placed for top of the line items. “We could not have been more wrong in our expectations of the internet,” says Alex Bolen, the firm's chief executive. Internet sales are still a relatively small proportion of total sales -- in 2015 only 20% of luxury brand sales were made online -- but the sect is rapidly growing. And with the number of luxury consumers growing a staggering 300% in the past twenty years, from 95 million in 1995 to over 330 million in 2013, it would only make sense to address the needs of these big spenders from all angles. 

But there are many who believe that the added income from online sales would not outweigh the detriment. Jean-Noël Kapferer is a French branding expert who penned "The Luxury Strategy" in 2012 and firmly believes that eCommerce is a threat to luxury image. He argues that "a product sold online ceases to be a luxury item." Kapferer and his proponents find the internet to be far too impersonal for these high end goods that "require human touch." Similarly, Bruno Pavlovsky, Chanel President of Global Fashion, told Bloomberg, "fashion is about clothing and clothing you need to see, to feel, to understand." Others believe that they are simply operating in the way the customer desires -- Celine CEO Marco Gobbetti told WWD that they prefer to engage directly with their customers "in the way they like to be engaged." Aka in-store or bust. 

There is another side to all of this though, and that is the internet's long standing association with discount prices. And interestingly enough, this perception has been driven home by the luxury brands themselves as they dump their end of season goods at deep discounts to various websites. They will even go so far as to create exclusive pieces for sites like YOOX.com in order to get rid of excess fabric. Furthermore, by refusing to get with the program early on, the internet became saturated with counterfeiters happily answering the desires of luxury shoppers looking for a little convenience.

The whole issue of price is further complicated by the fact that high end brands want their customers to think of cost last, if ever. The in-store experience is awash with dazzling service and exquisite beauty (and hopefully a little champagne) which works to distract from the bottom line, and when it comes to the internet that price tag is front and center. However, even though luxury brands may see this as a major deterrent, many online shops have been able to overcome the issue by simply offering convenience. Net-a-Porter is the perfect example as this high end online boutique is not at all price conscious, instead focusing on getting luxury products to the consumers' door before they sell out for good. And beyond that, they have created a unique shopping experience with their interactive, shoppable magazine The Edit. Having succeeded online without a vast investment in retail space, Net-a-Porter proves that luxury can be web compatible without losing prestige. 

Net-a-Porter's THE EDIT, an interactive and shoppable online magazine

The question of prestige is an interesting one within this issue. Many brands will argue that the internet is simply too accessible. Exclusivity is sexy and opening up their product to just anyone is not a welcome concept. However, it seems that they are discounting the fact that their price point will remain extremely exclusive, online or not. Just because an $80,000 fur coat is available online doesn't mean that any Tom, Dick or Sally can purchase it. Truly, it seems that these brands refusing to join the internet age are missing their opportunity to reach the modern shopper. And beyond that, they are forfeiting their chance with the next generation luxury shopper who is more than certainly going to be using the web for everything they do. While we understand the idea of brand preservation and tradition, the old world idea of luxury does not compute within the new reality of the digital age. Yes, online sales could cannibalize in-store traffic, but as more of our world is managed digitally it seems what could be lost is nothing compared to what could be gained.