Source: 24sevres.com
Presented here for discussion is a summary of a current article published with permission from Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania.
Luxury fashion houses, once fearful that the internet’s mass access would damage their exclusivity, are now racing to embrace digital, whether by partnering with multi-brand websites, developing their own platforms or both.
Online sales are expected to make up 25 percent of luxury’s sales by 2025, up from an estimated nine percent last year, according to a 2017 report from Bain & Co.
A primary reason: “Millennials are maturing into their prime earning years and becoming the focal luxury consumer,” said Keith Niedermeier, Wharton adjunct marketing professor. Millennials now account for 13 percent of high-net-worth households, he said, and they grew up shopping online.
Luxury brands also became comfortable with multi-brand portals such as Yoox Net-A-Porter, MatchesFashion and Farfetch — as opposed to eBay or Amazon, for example — because these e-tailers are careful to maintain an upscale image.
Net-a-Porter, for example, offers two-hour delivery windows, fashion consultants available 24/7 and a new premier service in select areas for its “Extremely Important People” or EIPs. “You Try, We Wait” customers can get an item they ordered delivered on the same day, and the e-tailer’s agent will wait for them to try it on to see if they like it.
Content on the luxury e-tail sites replicates the feel of a posh fashion magazine.
On their own, Louis Vuitton parent LVMH last summer launched 24 Sevres, a shopping site that offers not only its own brands but also those of competitors.
Gucci has streamed fashion shows on Facebook Live, revamped its website to offer more attractive visuals, and posts content on social media constantly to keep fans engaged. By churning out videos on YouTube and Facebook, Channel leads the industry with more than 57 million social media followers.
Luxury brands are seeing that it is an omnichannel world and adjustments are required to reach Millennials.
“Millennials and Gen Zs who purchase luxury want much more than just a brand name and a status symbol,” said Ludovica Cesareo, Wharton post-doctoral research fellow in marketing. “They want an experience, which for them has to encompass some form of digital interaction, [and] has to be inspirational.”