E-commerce presents a momentous opportunity for high-end brands. It has broken down geographical barriers for brands, made it possible for stores to remain open 24/7, and instigated the evolution of retail

Owing to the immense benefits of selling online, it’s easy to assume that most luxury brands have been quick in adopting online retail. The inverse is actually true. Most heritage brands were very reluctant in adopting e-retail. 

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In recent years, the majority of high-end brands have developed an e-commerce strategy, although a few are still holding out. 

Arguments against High-end E-commerce.

Some of the reasons that have contributed to hesitation in embracing luxury e-commerce include;

  • The fear that e-retail would dilute the brand’s elite and exclusive status. High-end brands thrive off of being selective and exclusive. Online retail makes these brands more accessible.
  • Inability to replicate the high-end retail experience online. Luxury brands go a long way to create the perfect shopping experience for their customers. Every little detail, including the scents, textures, the music playing, product displays, and the store design, has been well-thought-out and contributes to the experience of the shopper. Going the e-commerce route brings a challenge since it is highly impersonal.

Arguments for High-end E-commerce. 

While there are challenges that may make a brand shy away from luxury e-retail, there are many reasons supporting selling online.

  • According to Statista, the percentage of luxury goods sales made online is projected to increase from 9% in 2017 to 25% by 2025. This significant growth means that ignoring e-commerce is no longer an option for high-end brands. 
  • The next generation of high-end shoppers grew up and thrives online. Francois-Henri Pinault, CEO of Kering (Gucci’s parent company), told CNBC that 50% of Gucci’s sales were made to millennials and Gen Z. With such numbers, it’s imperative that luxury brands take steps to accommodate their future shoppers. 
  • Shopping at a high-end store can be an intimidating experience for some. It is much easier to shop online for fashion.
  • Affluent shoppers are not opposed to buying high-end goods online. According to the State of the luxury Industry 2020 report, 62% of affluent consumers preferred purchasing luxury goods at a brick-and-mortar location, 14% favoured online purchasing, while 24% of the respondents had no preference. In the UK, 20% of affluent consumers favoured buying high-end goods online. 

In recent years, we have seen luxury brands make moves towards embracing high-end e-commerce. 

LVMH Launches 24S

In June 2017, LVMH, the parent company of Louis Vuitton, launched a multi-brand e-commerce platform 24S, which was initially named 24Sèvres. The 24S website carries products from their own brands and, surprisingly, those of their competitors. They deliver to more than 100 countries.

24S aims to employ technology to create a personalized shopping experience for their customers. If you wish to, you can consult via video with one of their Parisian fashion experts. You also get access to a “Style Bot” on Messenger.

Burberry Flourishes on Live Streams.

Burberry has seen great success by live-streaming events on e-commerce platforms such as Tmall. Their most recent live-streamed event was the Burberry Spring/Summer 2021 show which saw them partner with twitch. The show was immensely successful with a record-breaking 28 million views on Tmall in China. 

With such numbers, the products showcased are bound to sell out quickly. KOL Yvonne Ching also partnered with the brand and live-streamed a visit to a Burberry store in Shanghai on Tmall. The livestream attracted 1.4 million viewers and most of the items showcased sold out in less than an hour.

Luxury Soho.

In April 2020, Tmall launched an online luxury outlet, Luxury Soho. Luxury Soho helps high-end brands to sell their excess inventory and off-season products online. The products on this platform are discounted and the targeted buyers are younger consumers. 

Luxury Soho provides an excellent platform to acquaint younger consumers with luxury goods. Several high-end brands are working with this platform including Coach, Moschino, Calvin Klein, Emporio Armani, Versace, Diesel, La Perla, and Hugo Boss AG. 

Chanel holds out.

Celine and French luxury house Chanel were some of the high-end brands that were more reluctant to embrace e-commerce. Celine, however, made the move to sell their products on LVMH’s 24S. 

Chanel still resists e-commerce. In 2019, the brand announced that they would be partnering with Farfetch, a luxury e-commerce platform, in an effort to innovate and make its physical premises more appealing to younger clients. Chanel clarified that they would not be selling on Farfetch.

Farfetch works with a multitude of other high-end brands including Gucci, Chloe, Dolce & Gabbana, Fendi, Burberry and Givenchy. Recently, Farfetch has benefited in spite of the pandemic. Alibaba and Richemont invested $1.1bn into the company to fund an expansion into China. 

Brick-and-mortar stores will always have a place in the world of high-end fashion. However, luxury e-commerce is also here to stay and most high-end brands have embraced it. Despite the initial hesitations, luxury brands have profited off of selling online and managed to keep their brand images intact.

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