Online retail and digital marketers are starting to understand the apprehensions of luxury brands about selling online. Luxury brand retailers put heavy emphasis on providing a luxury buying experience to clients, which is why multi-brand websites are seen as a threat to the prestigious brand image of luxury brands. Selling exclusively through their up-scale brick and mortar stores have allowed luxury brands to ensure that they deliver a premium experience to their affluent class buyers which includes first class customer services. This modus operandi has worked for luxury brands until now so why should they change this tried and tested way of distributing their goods?
The advent of the internet, the increasing popularity of online retailing and the future market trends are challenging the norms of luxury brands. Techniques that have worked until now may not work in the future and the time to change and take control online is here.
Luxury online retailers with many brands such as YOOX and Net-a-Porter, and the statistics of today are influencing luxury brands’ change of stance towards online retailing. In the year 2018, the UK witnessed a record increase in propositions in online spending, according to the ONS. Furthermore, one of every five pounds is spent on online buying, and this amount is growing. Luxury brands, however, are lagging with only 9% sales through an online platform. Nonetheless, global trends suggest that luxury retailers are adopting online retailing, but the pace is slow, and they are missing out on the moneymaking potential.
So which demographic is the most lucrative for the online luxury brands?
Surprisingly, Generation Z and the Millennials constitute a substantial portion of the market that is eager to buy luxury items . To appeal to the mindset of the younger target market luxury brands have to switch things up. They must cater to their tech-savvy, diverse and contemporary sensibilities while maintaining the high standards of first class customer service experience that buyers are accustomed to from the upscale brands.
Luxury e-commerce website have been an excellent way for many luxury brands to test the online waters and dip their toes in the uncharted territory of online retailing for luxury items. The favourable response from such websites has encouraged luxury brands to start thinking about online retailing. Conversely, by choosing to distribute their products by third-party e-retailers, luxury brands began to realise that they were not able to maintain the highest standard of customer services. The growth in popularity of such platform also affected the quality of customer service. To address these issues, many luxury brands are deciding to establish their independent online retailing platforms, which will give, brands the power to maintain a specific standard of customer experience.
Personal luxury goods are back in popular demand due to sustained growth and improving economic conditions. Revenue in the Luxury Goods market amounts to £15,725m in 2019. The market is expected to grow annually by 2.2% 
So how can luxury retailers effectively grow and sell luxury goods online?
The major shift towards e-commerce of up-scale brands means there is increasing competition and brands will have to fight for the attention of the target market. Luxury businesses are collaborating up with digital marketing agencies to help them navigate the unique challenges of e-commerce and online marketing.
Hiring the right digital marketing agency will play an integral role in the success of the venture. Therefore, luxury brands will benefit from being precise and selective. The upmarket nature of this segment requires nothing but the best because a wrong agency might harm the prestigious image and standing of the brand, which should be avoided at all costs. So what should a luxury brand look for in a digital agency? The following considerations will help you in finding a digital agency suitable for your luxury brand.
Big VS. Boutique
Big digital agencies cater to massive campaigns, big brands, and bigger companies, their service, although expensive, include many digital marketing subspecialties and they have more abundant resources and the skill set that allows them to handle the demands of big brands. In contrast, boutique digital marketing agencies serve smaller, more specialised work that targets a niche. Their services are usually more affordable, and they are experienced in meeting the demands of a specific segment.
Skills and Past Experience
When considering a luxury digital agency for a high end brand, it is essential to look at their skills, services and experience. An agency that has previously worked with up-scale brands would know the target market a lot better than an agency that has not catered to the market before and has a generalised outlook. Experienced agencies would have honed their skills to match the requirements of an upscale clientele and design their services accordingly.
Allum & Sidaway are an excellent example of a luxury retail brand going digital. Their focus has always been and will always be on excellent customer service creating a memorable experience, however in the current digital climate it is imperative they make themselves available to a broader audience. We tailor made a bespoke e-commerce website that kept the spirit of customer service and exceptional experience at its heart. Ultimately aiming to continue to provide the truly memorable, inspirational and stress-free experience that in-store customers get.
Read the Allum & Sidaway case study to see how we helped them transform their online presence
The Process for Growth
A competent digital marketing agency could have established their process for growth and will be crystal clear about their methodology for achieving results that you are looking for. Their method will be more precise with plenty of room for adjustments, which will allow them to make changes according to the luxury brand’s goals and growth objectives. From luxury web design to online luxury branding their view will be clear, and they will be confident about what they can deliver. If they seem unsure, it is time to look for another digital agency that knows what they need to do to help an online luxury store grow in a hyper-competitive e-commerce environment online.
In the light of the current trends and a promising outlook for upscale online retailing, luxury brands need to make a move and integrate an online presence along with their brick and mortar luxury retail store model to capitalise on a lucrative yet tech-savvy younger market. They must develop strategic partnerships with competent digital agencies that will help them complement their high standard of customer service in the online world without replacing it.
1 - Luxury Goods Worldwide Market Study. Millennial state of mind: the tailwind behind consumer behaviours and winning strategies, Claudia d’Arpizio and Federica Levato, Bain & Company, October 2017.
2 - Luxury Goods UK Statista