With the news that luxury lifestyle brand Chanel has made the decision to start selling its products directly to consumers via its website, and that Selfridges is soon to launch a transactional website, one could ask if this signifies an online migration for the elite ones, and in short, yes it does.
I believe that 2010 will be the year that the majority of these brands jump on the e-Commerce bandwagon. The majority have been holding out, in the belief that e-Commerce cheapens their brand and lessens their offering, but the recession has meant that people haven’t been shopping in their stores or outlets. In order to reach this niche group, they have no choice now but to reach out via the digital medium.
As usual, with many luxury brands, they’ve been waiting for one major player to start doing this before they take the leap. Burberry has been one of the main trailblazers for this, now with Chanel increasing its online presence it’s going to open the floodgates for others to do the same. Initial responses will see most luxury brands doing the same as Chanel, selling only a select amount of the range until they get a feel for etailing, and really it can’t happen soon enough. The luxury market is considerably behind other e-Commerce players, but what will make the difference is that they have cash and bigger budgets to spend than the high street retailers. What we’re likely to see is these premier brands coming on board and being innovative from the offset.
There are elite brands, which have already embraced digital – bespoke Saville Row tailor Gieves and Hawkes relaunced its new e-Commerce site last year to great success, citing a 350% uplift when comparing December 08 to December 09. As has designer Matthew Williamson, which has gone on to roll out its transactional site to the rest of Europe and the US. The challenge for digital agencies is to reassure brands that they can create and develop digital counterparts to their stores, and that traditional channels such as print, have limitations, which can be overcome online.
To date, although we’re seeing a change of attitudes toward online marketing techniques from these brands, the budgets have been slow to move inline with that. Many have not allocated the same time, resource and budgets to digital projects. Open any fashion magazine and compare the print ads with the brand’s latest email campaign for example, and the evidence is there in front of you. Digital is often seen as a cheap channel, and in particular email-marketing campaigns really suffer as a result of this misconception. Mainstream brands aren’t necessarily doing this better, but luxury brands certainly should be.
Social media is another stumbling block for many of them, possibly due to the ‘throw away’ nature of some social strategies – for many luxury powerhouses, the glossy print or broadcast campaign, and indeed, the product itself is where the creativity happens. It hasn’t, until now, been a matter of course to extend this attitude to online.
Now there’s a real chance for these brands to embrace digital, channels such as social media will probably play a part, but luxury brands will have to start finding their own methods of digital communication. As Burberry did during London Fashion Week, where they live streamed their catwalk show and asked visitors to interact and leave comments. This has set a precedent – by next London Fashion Week in September they will all be doing it.
By the end of this year I predict that the majority of these luxury brands will be selling online – how much of their range will be featured remains to be seen, but at the very least they will have an e-Commerce offering. By 2011 most will have dipped their toe in the water and we may see many pressing ahead and displaying full ranges online and embarking on serious digital campaigns.
This is great news for the consumer – providing that is, they have access to visit these sites. Some brands are protective of who can visit them online, only allowing for a select consumer to enter their website. Faberge relaunched its brand online in 2009, with a site designed to emulate the consumer experience of a Bond-street shop – anyone can view the site’s ‘shop window’, but to enter the website the user must first submit a phone number, and after a telephone consultation with a sales consultant, only then can they have access. Whilst they have created an admirable online service, with real time customer service round the clock, this login process is undoubtedly designed to weed out any illegitimate users. Sure it’s absolutely right that luxury brands maintain their exclusivity, and there’s lots of ways brands can make their online offering more limited in this way should they wish to, but it would be better for them to open it up. The more people who have access to the brand the better, and creating hurdles for people to visit your online shop, could be counter productive. Online allows for brands to have a virtual flagship store in every city in every country in the world, and it ought to be treated as such.
Many have the opportunity to go straight in at the top of digital innovation and if they don’t they’re missing a real opportunity to push ahead of their competitors. Luxury brands are special and therefore they can’t just replicate what’s gone before, they have to do something specialised and inventive, because that is exactly what defines and separates them from others.
The more luxury brands start doing this, the more consumers will be looking for them online, leading to a wider acceptance of shopping online for premier products and a larger audience. This will inevitably result in more luxury goods sales, but more than this, an online push for these brands will mean more competition in the digital market and more innovation; the bar is being set higher, and all retail brands must then move to meet it, creating a stronger e-Commerce industry for all of us.
Fadi Shuman
Co-Founder of Pod1
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