Few luxury firms sell online, yet among those that do online retail is an important part of their business, accounting for 12 percent of revenues on average, according to a new survey.
Ninety-four percent of the 178 luxury brand executives surveyed by Forrester Research Inc. and the luxury association Walpole Committee said they have a brand Web site, but only 32 percent sell online. Of those who do, average online sales were $57 million.
It’s time for luxury firms to adjust their thinking on e-commerce, said lead author and Forrester analyst Victoria Bracewell Lewis. Eight out of 10 high-worth consumers use the Internet daily and regularly research and buy luxury goods and services online, the report said.
“Selling direct is not going to be appropriate for every brand, but it’s time for luxury firms to step up and be just as innovative in this channel as they have been with their goods,” she said. “We’ve admired luxury goods for their quality and their inventiveness, and I do think this is an opportunity that’s being missed by the luxury sector.”
The premium and luxury brands surveyed represented a range of industries, including fashion, media, retail, travel, members-only clubs and wealth management services. Fashion, footwear and accessories made up the largest category with 19 percent of firms in the survey. In addition to the survey, Forrester interviewed 20 companies, including Bang & Olufsen, Cool Diamonds, Emporio Armani, Fortnum & Mason and Louis Vuitton.
Twenty-two percent of the 117 companies without e-commerce said they plan to start selling online in the next year. Twenty-six percent said they do not sell online because they believe their customers would not buy their goods and services on the Web. Typically, they treat their Web sites as a glossy magazine ad.
When customers go online to buy something they may have seen in a magazine or elsewhere, then burrow down four or five layers only to find they can’t buy, it’s frustrating,” Bracewell Lewis said.
“You’ve just created a poor shopping experience for that exact same audience you were trying to attract in the first place and they can leave feeling negative toward that brand and the experience they’ve just had. Your competition is just a click away.”