Drapers asks why it has taken so long for the world of luxury to go digital and how brands are standing apart from fast fashion online natives.
“Fashion is about clothing, and with clothing you need to see, to feel and to understand,” Bruno Pavlovsky, Chanel’s president of fashion told Bloomberg back in 2013, by way of explanation of the French luxury giant’s rigid – and ongoing – resistance to selling online.
At the time, it was a position most other luxury houses held, and the tide has turned surprisingly slowly in the intervening years, as many brands have been hesitant to join the ecommerce revolution.
Now, however, the industry appears to have reached a tipping point, as technology and consumer expectations evolve to a level that luxury brands can no longer ignore. In December 2017, Céline announced its debut transactional website, and earlier this month Prada relaunched its shopping website with an enhanced design for desktop and mobile.
Helen Brocklebank, CEO of luxury retail group Walpole, explains why brands have previously been wary of digital: “Two of the basic pillars of luxury brands, until now, have been selective distribution and managed scarcity. The online world has always threatened to challenge both these pillars. It’s not that these are impossible in the online world, but the challenge is clear and present.”
The shift stems from the boom in demand for luxury goods online. Management consultancy firm Bain & Co reports that online sales of luxury goods worldwide jumped 24% in 2017, accounting for €23bn (£20.4bn) and made up 9% of the overall luxury market. By 2025, Bain estimates online will make up 25% of all luxury purchases.
Control of the brand environment is a luxury fundamental – this applies to all platforms
Helen Brocklebank, CEO of Walpole
“Those brands without an online presence risk losing out if they fail to adapt,” explains Alvaro Morilla, senior analyst at Kantar Consulting. “Even if the conversion finally happens in store, not being online makes brands invisible in the eyes of an increasing number of shoppers.
“Consumer expectations are rising, and luxury consumers are becoming even more demanding. Brands that fail to keep up with this will lose competitive advantage and concede market share.”
Another driver to online is the digital orientation of the Chinese and Middle Eastern markets. Chinese consumers accounted for 32% of global luxury purchases by value in 2016, and Asia made up 28% of all online luxury sales in 2017. Gucci recorded triple-digit growth in online sales for the third quarter of 2017, fuelled by the July 2017 launch of an ecommerce site in mainland China. Prada also decided to launch its redeisgned website in mainland China, geared to the mobile-centric population of luxury-hungry shoppers.
The timing for the shift to online also reflects a tipping point in tech, as brands are now able to create a bespoke luxury experience online, both in terms of customer service and brand identity.
“Control of the brand environment is a luxury fundamental – this applies to all platforms,” explains Brocklebank. “Luxury brands invest huge sums in creating a standout customer experience in store and those customers expect the digital experience to reflect that.”
With technology such as augmented reality (AR), artificial intelligence (AI) and video, brands can now craft this luxury experience more effectively online, keeping customers happy and the brand kudos intact.
“Technology has improved to be able to showcase and accurately depict the feeling of a luxury item,” explains Adriana Goldenberg, marketing strategist at digital creative studio Holition, which has worked on AR tech projects with brands such as Louis Vuitton and Hermès. “The cost of these technologies has reduced, and that means more luxury brands are being experimental in the marketplace.”
Goldenberg highlights that tech such as AI and chatbots, which are built around the consumer, as those that are best suited to recreating a luxury customer experience online, as they act as a virtual shop assistant. Prada, for example, has introduced a “personalised concierge” to its relaunched Chinese website in the form of a chatbot.
Technology has improved to be able to showcase and accurately depict the feeling of a luxury item
Adriana Goldenberg, marketing strategist at digital creative studio Holition
Brocklebank notes that smart use of customer data is key to differentiating luxury online, as it enables the creation of a level of experience customers expect.
“Exclusivity and making the customer feel incredible is all about how well you know and understand your customers as individuals. Data and machine-learning offer immense possibilities here,” she says, highlighting Yoox-Net-a-Porter Group (YNAP) and its use of data as “game changing”.
At its London tech hub, for example, YNAP is using customer data to develop AI-driven stylists that can suggest outfit options based on calendar information and customer details.
In addition to this tech focus, what sets luxury websites apart is quality of content.
“A web platform offers such a great opportunity to highlight the craftsmanship, heritage and philosophy behind a luxury product,” notes Roger Tredre, acting head of retail at research agency Stylus.
Henrietta Rix, co-founder of premium womenswear brand Rixo, agrees, adding that creating impeccable content and imagery were a key focus when she set up its website: “As high streets adhere to the ‘fast fashion’ cycle, they have to churn our new content and imagery weekly or daily, so the story behind it isn’t as authentic, as it will have a much shorter coverage time.
“Luxury brands tend to create more of a story or spectacle behind campaigns and product launches, and the longevity and quality behind it reflects the qualities of the product being sold.”
Brands such as Prada and Gucci use artistic fashion videos on their websites. In the past, for example, Prada has collaborated with BAFTA award-winning director Wes Anderson on its films.
“Prada’s enthusiasm for film perfectly suits its ecommerce evolution,” says Tredre. “Film is still an under-explored medium for many mass-market etailers.”
No longer shunning digital, luxury brands are beginning to innovate in the creation of luxury online experiences, to maintain their relevance in the modern shopping age. The sector is taking the lead with the online manifestation of brand identity, and the use of data to facilitate alternatives to the shop assistant. But as the levels of service offered in luxury trickle down to the high street and ecommerce becomes ever more personalised, all eyes will be on this sector of the market to see how it develops online to retain its exclusive edge.
Brand insight: Neil Bridgeman, brand communications director at Mr Porter
How does the Mr Porter site create a luxury shopping experience online?
Since Mr Porter’s launch in 2011, we have witnessed a change in the definition of luxury shopping. For our customer now, luxury means serving them with the best edit of menswear and allowing them to shop it fast and on-the-go. In many ways, the biggest luxury we give our customers is time. The entire customer experience is centred on blending content and commerce.
We extend this with same-day delivery in London and New York and for select customers who we know well, we offer a “You try, we wait’ service, making returns as simple as possible. That said, old-fashioned service still goes a long way and our personal shopping team work closely with our top-spending customers through new mediums of communication – WhatsApp is becoming increasingly popular.
What kind of features elevate the site above high street sites?
Our eclectic product mix at Mr Porter is a key feature that elevates our brand. We understand how our customer shops and we are in the unique position to display anything from a £3,700 Brunello Cucinelli suede jacket alongside a pair of £60 Converse sneakers to a £18,500 Jaeger-LeCoultre watch. We also work on exclusive collections with the world’s most renowned luxury brands from Gucci to most recently Balenciaga.
In November, we added to our exclusive product offering by launching our own label Mr P., which is borne out of the data, insight and feedback we have received from our customers.
Our award-winning editorial, including weekly magazine The Journal, bit-sized news source The Daily and bi-monthly Mr Porter Post, provides unmatched content from style advice and “how to” guides to interviews with celebrities.
Our Style Council, an ambassador-driven digital travel and city guide resource is a further extension and elevation of the Mr Porter lifestyle, enabling our customers to discover the world’s best bars, restaurants and hotels recommended from a handpicked group of stylish men.
How important is content in creating a luxury experience online?
Content is extremely important in creating a luxury experience for our customers online – it allows us to not only contextualise our unique product edit, but also cover thought-provoking and current editorial features across areas that interest our customers. Moreover, content is one of the main sales drivers to Mr Porter’s retail space,as visitors who arrive via the newsletters and social channels spend 40% longer browsing on site than those that don’t.
Why do some luxury brands opt to only sell online through third-party sites such as Mr Porter?
For many brands the attraction selling is that there is no barrier to entering the global market. A brand can launch on Mr Porter and immediately have access to the world – to instantly reach customers in more than 170 countries and be exposed to our large audience – all set within a luxury online experience that supports their brand and positioning.