3 Myths about Fashion and Luxury e-commerce
One of the quintessential constituents of any purchase decision apart from the obvious necessity is appeal – a positive outlook towards the buyer. How rewarding is a reinforcing acknowledgement vindicating your decision to spend on that Rolex? How deeply satisfying is it, when you are complimented by your colleague for sporting those Louis Vuitton shoes? When it comes to Fashion and Luxury, appeal is the ultimate necessity! Download the eBook to know more.
MYTH vs. FACT
Myth 1: Fashion and luxury are women exclusive
When we think about fashion and luxury or when thinking about these terms together at least, it is easy to visualize women walking the ramp rather than men, for most of us. It is true that in the beginning, during the nascent formative years, this industry had more affinity to feminine fashion and this was when Men's glamour and fashion was almost unheard of. This image has stuck with the public and the truth is so far from the assumption, it is almost surprising that the number of men shopping fashion and luxury products almost equals that of women.
According to Internet Retailer, women online shoppers make up only 55% of the entire luxury e-retail industry!
Myth 2: Online luxury market is very small
There is a raging debate on how important "look and feel" is for this industry and whether an online fashion store is a moot point. There are concerns about perceived lack of personalization and "in the flesh" experiences. Let's back up a bit. Where is this coming from? Is this the opinion of every single buyer or aspirant or just a few elitist groups amidst the famously snobby fashionistas?
Well, this is what Miuccia Prada had to say about selling Prada clothing via ecommerce in 2013:- "We don't like it. My husband hates it and we think that, for luxury, it's not right. It's good in countries that don't have the shop nearby. [Otherwise] the choosing and sending home is too complicated. Personally, I'm not interested."
Despite Mrs. Prada's admissions about her reservation, the brand has been selling everything except clothing via their e-commerce store for close to six years now. Luxury juggernauts like Prada can afford to take such a stance and not fully utilize the cash cow which is e-commerce but there are many smaller and independent retailers who cannot afford such a snub. The industry on the whole is going through a change in mentality. This new change is being brought about by exclusively online luxury stores which are creating a wave of unprecedented top line growth, the kinds of which the industry has not seen yet. According to research conducted by McKinsey in collaboration with Altagamma Foundation it was found that in 2013, online luxury sales increased by 20% to $10 billion even though there was just a 2% overall growth in the industry. Experts believe this growth will continue and more than double in the next five years.
Myth 3: Fashion and luxury needs no social media marketing
In the early years of Internet, luxury brands were hesitant to use social media since the internet is intrinsically a classless mass-media which contradicts the exclusivity and uniqueness of luxury brands.
These days the perception about social media has changed and it is no longer seen as an isolated system when it comes to e-retail; It can be used in integration with and enhance marketing, communication, sales, PR, and social CRM. It is an ideal platform for building consumer trust and loyalty. Social media has the power to enhance a luxury brand's reputation, improve customer relations and stimulate desire for luxury among the masses; while still maintaining a fine balance between the luxury brand's desirability and accessibility.
Social media brings scale to marketing; Before the likes of facebook and twitter emerged on the internet, a celebrity was seen with her new bag by maybe a few hundred people in the street, and tens of thousands of people in magazines. Now, we are talking about millions of people if it is on facebook, Twitter, pinterest, or Youtube.
Fact 1: Luxury e-commerce sites drive global e-commerce growth
In 2009, Luxury buying constituted just 2 percent of the total e-Commerce sector; This year (2015) it has grown to 6%. According to some recent studies, it is seen that 98% of affluent consumers are making online purchases; this is important to eCommerce companies because these are the consumers who make high-value / large-basket purchases thereby rocketing up the AOVs.
Fact 2: China and Latin America are the next hot spots of luxury e-commerce
In China, it's not just the super-rich who buy luxury goods; It is seen that more than half of the luxury purchases are made by lower and middle income consumers. China's online buyers possess well developed brand awareness and trust in the big-name brands. This is why China has maintained the #1 or #2 spots in overall luxury purchases globally in the past few years.
Latin American countries like Brazil and Mexico have some of the world's most connected populations and a vast majority of them make online purchases. Since most of the online purchases in these countries are made in the large cities, there is still room for growth when the rest of the population warms up to online shopping.
Fact 3: Designer apparels are most frequently purchased on the web
According to Internet Retailer, Designer Apparel is the fastest growing and best selling segment of luxury E-Commerce and it also commands a market share that is five times Apparel's share of the total e-commerce market. This goes counter-intuitive to the notion that when it comes to designer apparel, customers would want to touch and feel the fabric, see the colors, and also try out the clothes to check the fit.
Epilogue Now that we've demystified the myths and established the facts that E-Commerce in Fashion and Luxury is a large segment that is growing fast, It is imperative for companies in this segment to further augment their product showcasing capabilities to keep up with or surpass the competition.