Study: Luxury Brands Embrace E-Commerce but a Decade Late?

In eCommerce, Industry News, What's New by Accessories StaffLeave a Comment

Stevens, PA—While some luxury apparel and accessories brands have recently begun e-commerce initiatives for the first time, a new study of affluent online shoppers found many luxury brands may have a lot of catching up to do.

Some luxury brands resisted online selling since they believed it would dilute the experience of face-to-face interaction in a department store or brand retail location, says Pam Danziger, president of Unity Marketing and lead researcher in the new study of internet shopping and social media use among 1,614 affluent luxury consumers (average household income: $239.300). As a result, many luxury brands only offered beautiful “informational” websites with no way to make a purchase.

Citing a recent The New York Times report that luxury brands such as Marc Jacobs, Jimmy Choo, and La Perla all are finally embracing e-commerce as a way to reach the highest-spending luxury consumer, Danziger say many of these potential consumers are already avid online shoppers.

“For too long, luxury brands have ignored their best prospects online,” Danziger says. “This survey found that those who spend the most time shopping online–what we identified as the ‘heavy-user’ segment–also spent twice as much buying luxuries through any venue–online, in-store or through direct mail–as compared with those affluents who spent less time shopping on the Internet.”

Unity’s study, entitled “How the Affluent Luxury Consumer Uses the Internet and Social Media: An In-Depth,” found the typical luxury consumer averaged some 4.2 hours shopping online per week and spent about $5,000 on all fashion purchases, as compared with the heavy users who spent 9.5 hours on shopping-related activities weekly and averaged $9,600 on all fashion purchases in the three-month study period.

“Luxury clothing brands, seeing an exodus from traditional retail destinations like department stores, are right to turn to the Internet to find the highest-spending luxury consumers.  However, the customer they find online may be different from the one that frequents the store, and these luxury brands need to be ready to respond,” says Danziger.

Profile of the Online Heavy User

These online consumers share key demographics which help marketers identify their best potential customers. The heavy-user is a woman under the age of 45 years, though nearly half of the heavy-users are men. She is very affluent with an average income of around $337,000.  And, like many people with high incomes and demanding careers, she doesn’t have a lot of extra time to go to the store.

“For the heavy-users who spend much more money buying luxury, the Internet provides shopping experiences they value most: speed, convenience, and 24/7 access to brands and merchandise that no single store can match. Further 55% of heavy users say they enjoy online shopping more than in store, as compared with 43% of affluents who are not classified as ‘heavy-users,'” Danziger explains.

“These high-value customers who prefer to shop online present a challenge for traditional-minded luxury brands that have been reluctant to embrace e-commerce as an acceptable shopping alternative to the bricks-and-mortar store. But the message is clear: These ultra-affluent young people are going to shop online, so luxury retailers must meet them there–with the message, information, and options these shoppers most desire–or they can let those dollars flow into another brand’s pocket,” Danziger says.  “Many luxury brands have a decade of catching up to do to learn how to effectively reach their online market, but those that do will find consumers willing to spend.”

The 59-page trend report surveyed affluent consumers with incomes of $100,000 or more and who bought luxury goods or services in the fourth quarter were surveyed from January 8 to 27.  The result of this survey are compared with findings from similar studies conducted in third quarter of 2007 and 2005, so that four years of trends in luxury consumers use of the Internet can be measured and tracked.

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