Online luxury stores and their strategies
19 March, 2018
Actualizado el Friday, 12 July, 2019
E-commerce is eating ground to the traditional one. Even more so with the new technologies and the amount of resources that companies put at our disposal to see, ask, share and buy their products. But does that happen in all sectors? Today, in Multiplicalia, experts in online store design, we are going to talk about what happens in online luxury stores.
Advances in online luxury stores to keep pace
According to Bain, the luxury market grew by 5% last year. A total of 1.2 trillion euros, (euro up, euro down), with an increase in online sales of 24%. This increase is due, above all, to the Millennial generation, which has standardized online commerce. But you have to make a small difference:
- Hard luxury or timeless luxury, such as jewelery or watches, with a virtually indefinite lifespan and can be revalued over time.
- Soft luxury or temporary luxury, like fashion products, which have a relatively short lifespan.
The soft luxury does not experience great differences with the rest of the products that are commercialized: the Millennials know what they want and they trust that, although the products have a higher price, the brand gives enough confidence to buy those products as if from any another one will be That’s why we will focus on hard luxury.
How hard luxury companies try to win the trust of customers?
The rise of social networks and the widespread use of smartphones has been crucial for the growth of ecommerce, thus promoting the appearance of luxury online stores. If before they had only a catalog function and the sales were anecdotal, now they innovate to reverse that trend. So we can see in the following examples, with new elements to provide a better experience and increased sales.
Personal assistant always available
In these times, we have internalized the speed of using the internet. Chats, applications, social networks … Companies and individuals communicate immediately. The watch company Jaeger-Le Coultre has taken note. It has implemented the use of a bot with which to speak, consult and recommend products as the conversation progresses.
Basically, it is a personal assistant as if we were in the store watching watches, although in the comfort of our homes or elsewhere.
Something similar is being done by the IWC company, putting in all the products a section to get in touch with a counselor who can assist you and solve any doubts that may arise.
Obviously we do not feel as if we could touch the products but, in this way, we appreciate the interest of connecting with the customer.
The platforms are diversified
It is true that there are platforms where you can buy everything, like Amazon, AliExpress, etc … But the giant in this sector is called JD.com. It is the leading product sales platform in China, with that market accounting for 8% of all global online sales, due to the growth of the Chinese middle class.
That is why this platform has decided to opt for the sale of luxury goods. For this, last year launched its new section “Top Life”, one of the new online luxury stores where it makes available to users a selection of high-end products. The most significant example can be found in the agreement that came with Farfetch, the British luxury online fashion sales company.
With an investment of 397 million dollars, JD.com brings luxury brands to the Chinese market, making it much more accessible and surpassing its main competitor in the sector: Alibaba.
This new section also allows the delivery “JD Luxury Express“, a delivery system in less than 24 hours by drivers specialized in electric vehicles.
High vs. low: the price dilemma
It is a topic that most luxury brands do not agree with: do we lower prices in online sales? Do we keep it? Do we leave most of our products for offline sale? Do we do the opposite?
Everything depends on the philosophy of each company. Luxury is subjective. There are those who identify it with what is not accessible. Others, with what is expensive. That is why these new strategies appear, in which offline sales begin to be relegated to the background, and others in which it is intended to make them more affordable for those with less purchasing power.
This is the case of Thomas Sabo or Monica Vinader, companies with “affordable online luxury stores”. In spite of everything, it is worth considering that consumers may not be so polarized in terms of what they want from luxury brands, but with a channel that helps find the best option of all.
If you need to redesign your website, virtual store or boost your sales, do not hesitate to contact us, experts in online store design and web positioning.