LUXE E-TAILERS SEEN WASTING MILLIONS

Byline: Valerie Seckler

NEW YORK — Virtual baubles appear to be leaving the online luxury customer blase.
E-tailers aiming at affluent cybershoppers, or those with liquid assets of $1 million or more, had best not pin their hopes on the offer of exclusive designer fashions or extravagant jewels, let alone Flash-animation features or whiz-bang multimedia extravaganzas, according to a report released last Wednesday by Internet consultant Forrester Research Inc.
“These affluent people have specific demands when they shop online that are different from what they are looking for when they shop offline,” advised Ekaterina O. Walsh, a senior analyst at Cambridge, Mass.-based Forrester, in an interview Wednesday. “Upscale e-tailers are wasting millions of dollars. They’re all focused on the things that don’t work: exclusivity, extravagance, completely unusable Web site features.”
What is working at Web sites appealing to cybershoppers with wide-ranging income levels, Forrester found, is simple: convenience, control and confidence.
“Affluent shoppers are a critical consumer segment because they set the pace for e-commerce adoption,” Walsh noted. “They have been buying online longer, feel more comfortable doing so, buy more frequently, and, of course, spend more online than anyone else. At the same time, they buy online for the same reasons as all online shoppers do; they care about price and positive experiences as much as the less-wealthy.”
“Despite their readiness to purchase everything from prestigious cosmetics to designer clothes,” Walsh added, “the affluent have held back from buying luxury goods online because they are not getting what they want. Sites like armaniexchange.com, eLuxury.com and Boo.com are all focused on things that don’t work.”
Informed of Forrester’s findings, the chief executives of both Boo.com and eLuxury.com agreed that it’s vital to make their Web sites easy to use — and contended they have done so and are continuing to refine those efforts. (Armaniexchange.com officials did not return calls for comment). At eLuxury, for example, a number of changes have recently been made, or are soon upcoming on the site (see related story).
“Particularly for luxury sites — but for any Web site — you need to make them easy to use,” offered Barbara Wambach, chief executive officer of eLuxury.com, the San Francisco-based joint venture between LVMH and Europatweb, the Internet development vehicle of LVMH chairman and ceo Bernard Arnault. “The luxury customer is more demanding than others. Speeding page-load times and making navigation easier are things we’ve been working on.
“It’s a challenge to sell at high price points online,” Wambach acknowledged. “You want to show the product clearly, but you don’t want to overwhelm the [technology]. Most people in the U.S. are still using 56K modems.”
Ben Narasin, chief executive officer of Fashionmall.com Inc., the portal that acquired various assets of Boo.com last May, said of the Forrester advisory: “I think it’s dead-on right, but she’s referring to the old Boo.
“The original Boo.com was a whiz-bang techno site with all-out Flash, and some extreme exclusives, like Jil Sander Pumas. We’ve made some fundamental changes at Boo, broadening the merchandise focus from so much footwear, especially athletics. We’ve added and expanded a lot of categories,” he noted, citing apparel, accessories, home goods, and style-driven gifts. “We’ve hired style scouts to try to identify what products people want.”
However, neither Wambach nor Narasin necessarily agreed with the word from Forrester that designer exclusives and extravagant merchandise are not tasty lures for the luxe crowd online.
“Some of the things our users want are very pricy,” Narasin said. “At Boo.com, for $27,000, you can buy a floating home for six, to be used outside a lake house. You can also buy everything from a modestly priced MP3 player to a Ducati. What our users want is something different. And the something different isn’t price.”
Offered eLuxury’s Wambach: “I would just disagree with [the notion] that designer exclusives and extravagant merchandise do not appeal to the luxury customer online. It is normal for retailers to differentiate with various labels, whether it’s Target’s proprietary brands or exclusives on designer goods, like Louis Vuitton and Christian Dior handbags, which can be found at eLuxury.”
Nonetheless, the picture surfacing from Forrester’s research, Walsh insisted, is one of an Internet where luxury merchants are engaged in a misguided, futile attempt to recreate the world of offline luxury shopping on the Web.
“Online purveyors of luxury goods should quit trying to recreate an offline shopping experience,” Walsh counseled. “Channels aren’t different funnels through which identical experiences can be poured.”
Making matters worse, most Web sites appealing to luxury customers, Walsh said, are unwittingly erecting technical barriers to convenient shopping, like bandwidth-intensive interfaces; links that are broken; features that require plug-in devices, and “error” messages, which can be confusing.
“By understanding and responding to the demands of affluent online shoppers,” Walsh concluded, “retailers will be poised to fulfill expectations of non-affluent customers, who are right behind them.”