Ecommerce Imperative for Today's Luxury Brands - eMarketer

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Ecommerce Imperative for Today's Luxury Brands

April 27, 2016

Maria del Carmen Fernández González
Infinitum Ecommerce

Infinitum Ecommerce is a marketing and ecommerce agency based in Pontevedra, Spain. Maria del Carmen Fernández González, Infinitum’s CEO, is an international ecommerce consultant specializing in luxury brands, and contributes to a variety of magazines devoted to the fashion and luxury industries. eMarketer’s Karin von Abrams spoke to her about how luxury brands can meet the challenges of the digital age and use new technologies to enhance customer experience and loyalty.

eMarketer: What are the biggest challenges for luxury brands looking to develop a presence online?

Maria del Carmen Fernández González: The biggest challenges are having a great brand, connecting with the target audience, being innovative and different, and having enough experience in online marketing.

Specifically, a luxury brand must have a DNA different from that of other brands. Consumers must be able to recognize a brand and its values just by looking at a product, even without seeing its logo. Otherwise the brand won’t stand out and it won’t grow.

You must know your customers very well, including their preferences and values. You must create content that interests them, and make buying online as easy as possible.

“Consumers must be able to recognize a [luxury] brand and its values just by looking at a product, even without seeing its logo.”

You also need great brand visibility that ensures a dominant presence on social networks like Facebook, Instagram, Pinterest and so on. Many of these networks have enabled brands to grow their sales dramatically. Of course, for brands selling globally, the communications and social networks will be different. For example, in China if a brand is not on Weibo, it doesn’t exist. However, in the UK, Facebook is more powerful than any other social network.

eMarketer: Which luxury brands have done the best job of presenting their brand and products online?

Fernández: The best luxury digital brands are Burberry, Dolce & Gabbana, Hermes, Moschino, Cartier, Boucheron, Chanel and Armani.

eMarketer: How can luxury brands encourage engagement and loyalty among online consumers?

Fernández: The online luxury consumer wants to be treated as they are treated offline. To build loyalty and commitment between a brand and luxury consumers, it’s important to keep these priorities in mind: exclusive content; specific promotions, such as Gold or VIP cards; and customer service in social networks. In China, for example, it’s essential to offer customer assistance via WeChat.

“The new rich are from countries such as Russia, China and Dubai, and have an average age of only 34.”

Other priorities include innovations that create unique experiences for digital shoppers and buyers; adapting brand content and features to mobile devices; providing all the content a potential buyer needs to make a decision; a quick and easy payment process; using neuromarketing strategies to better connect with customers; and listening to customers—this assures consumers that the brand is interested in what customers think.

One successful example is the luxury brand Rebecca Minkoff, which has created a specific forum for customers to suggest changes to products.

eMarketer: How important is it for luxury brands to sell online? Does this vary by product category?

Fernández: I predict little future for any luxury brand that isn’t on the web. Don’t bet on finding another way to do business in the online world—in the long run, you’ll find it’s a huge mistake not to be there.

If it’s true that your audience simply wants to see, experience and buy in physical stores, why did Valentino sell 11,500 coats within a few weeks on the multibrand site Net-a-Porter? It’s incomprehensible to reject this sales channel, especially as many luxury brands are going through bad times because of the high cost of having physical stores. Being online allows them to sell worldwide at a much more affordable cost.

“The key to the online sales boom is that luxury brands finally understand that their customers want what they want when they want it.”

We must realize that, until recently, the rich were people with an average age of 48. It’s true that this type of consumer, typically Western, liked to purchase luxury goods in person. But increasingly, the new rich are from countries such as Russia, China and Dubai, and have an average age of only 34. These people with high purchasing power love technology, they’re all connected thanks to their iPhones and tablets. They love finding information and purchasing products online.

The key to the online sales boom is that luxury brands finally understand that their customers want what they want when they want it. Previously, many people thought that the luxury buyer has all the time in the world to shop—that’s not true anymore.

In fact, the product category doesn’t affect whether a luxury product is easier or harder to sell on the web. The Tiffany online store sold a piece of jewelry with diamonds valued at €250,000 ($277,368). Furniture, art, gourmet food and fashion are all sold on the internet. Every good, credible product is saleable online.

eMarketer: What do you think are the most exciting developments in the luxury industry with respect to digital?

Fernández: The most interesting current developments are personalized cross-selling based on the tastes of each client; interactive banners and cinemagraph images; augmented reality that helps consumers visualize the products; presenting products according to a client’s emotions; presenting products according to the weather where the client lives; buying online while watching a movie; and products marketed via spoken messages, enabled by RFID technology. An example [of the last development]: A woman with a mobile phone is walking down a street and sees another woman wearing a blue Dior suit. Suddenly, her mobile phone tells her that the same suit was worn by the Chinese actress Ni Ni at Fashion Week in Paris. This information helps to connect the brand with the consumer and spark emotions in that consumer.

Within a few years all aspects of a brand’s digital strategy will be fully customized to individuals. We all know that information is power. Thanks to predictive data programs, brands will know much more about what excites their customers and what actions boost sales.

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