Luxury brands are starting to embrace the world of e-commerce. In fact, when it comes shopping online, they may be one of the last ones to get onboard.

Chanel, known for their attractive clothes and purses, only offers their beauty products and fragrances online for purchase. You won’t find an available Birkin handbag anywhere online from Hermes or an expensive Celine purse on the brand’s website for sale or on any other online site either.

 

 

The luxury brands that do opt to sell their exclusive products online are often wary about aggressively advertising their brand online including social media. Instead, they tend to feel more secure just letting their window displays in Knightsbridge do the talking for them, or perhaps their traditional marketing found on the pages of Elle and Vogue.

 

 

This overcautious mindset about moving their brand into the realm of digital, many experts claim, is very much deliberate. Why? It’s partly due to maintaining a sense of exclusivity by making sure their products aren’t easily obtained by just anyone. It’s also likely they want to establish a clear line between their genuine goods and the countless knock-offs that have proliferated in many online marketplaces today.

Could it be a mistake for a luxury brand to shy away from the online marketplace, since it’s such a huge opportunity to exponentially increase sales as well as influence brick-and-mortar purchases as well.

In 2014, virtually all growth in the luxury goods market worldwide came from purchases that were made online. Although online purchases only constituted 2 percent of luxury goods sales from 2009, those figures have increased as much as 6 percent since then. Furthermore, observing and studying the decision-making shopping journeys of close to 7,000 luxury shoppers throughout the world, revealed that nearly 75 percent of all luxury purchases are currently influenced by interactions online, including browsing on social media and online searches.

 

 

 

Luxury brands tentative steps into the online sales market:

 

• According to research, online sales have increased from 2 percent regarding all 2009 luxury purchases to 6 percent in 2014, which is a substantial growth overall.

 

• Based on the latest findings from Keenpac., high profile luxury brands haven’t dabbled too much in e-commerce. However, more of them are starting to do so based on customer demand, which poses a few logistical type of challenges for upscale retailers.

 

• Experts predict that by the year 2025, luxury sales could contribute as much as 18 percent of all e-commerce sales due to brands like Chanel, Louis Vuitton, and Fendi launching e-commerce sites.

 

Luxury brands may be less focused on e-commerce sales and their online presence in general because they’re more inclined to target their already established, loyal customer base. However, studies show that among luxury buyers in general, baby boomers spend virtually just as much spare time browsing online as today’s millennials do and also own and use just as many electronic devices as well.

In other words, rich and wealthy baby boomers are every bit as ripe and ready to buy upscale merchandise online as their somewhat younger well-to-do counterparts.

What’s the one thing that’s radically triggered a shift in general shopping behaviour today? The smartphone, of course.

Research reveals that for every image that a luxury brand posts on its account on Instagram or other type of social media channels, there are as many as 10,000 posts on average from consumers who are responding to and engaging with their brand overall. In an effort to manage and protect their brand images, several luxury retailers have been very quiet about their presence online. Research also shows that this may not be a wise choice since it’s not actually helping them gain control, but rather diminishing their influence concerning their brand by choosing to not share the story of their brand with others.

If luxury brands do finally make the leap into sales online, they’ll need to deal with key challenges that are unique to them and not essentially shared by their marketing contemporaries. Because luxury brands generate high value products in relatively less quantities, it poses a real challenge in terms of meeting supply and demand online. In other words, it simply isn’t practical to have numerous distribution centers around the globe when there are not enough goods to fill the space.

Luxury retailers will need to be strategically minded about logistically getting their goods into the online shopping carts of online shoppers.

 

 

E-Commerce and Security

 

Security is on the mind of every luxury retailer. Luxury brands have a strong fear that by enabling customers to have free access to their high-end goods online, they’re also facilitating counterfeiters as well. Overall, theft is a real concern when high value inventory is at stake and transported from place to place.

The necessary changes required for doing business online can be particularly painful for brands that usually allocate most of their general spending dollars on building physical stores that also serve as showrooms to market their goods.

In the end, because luxury brands have much higher margins to play with and thus more flexibility to experiment with, they can potentially have an easier time developing new and better ways to deliver their products.