Luxury Fashion Brands in the E-Commerce Competitive Landscape

Luxury fashion brands that have traditionally heavily relied on fancy flagship stores and distribution through department stores are shifting their competitive landscapes. It’s no surprise that many notable brands like LVMH and Hugo Boss are actively developing their own e-commerce platforms now that it is evident that shopping behaviours are migrating online and the growth in the Chinese luxury retail market is slowing. The result is a new competition ground between these brands’ own e-commerce sites and the department store e-commerce sites that they typically sell through. 

I personally found it very interesting to see such a big move for luxury to e-commerce, given the fact that luxury fashion is a high-effort purchase that normally involves more in-person engagement with the product prior to purchasing. However, it is definitely worth nothing that it is predicted that the “web sales of luxury goods will grow at more than twice the pace of the overall luxury market, to 27 billion euros ($30 billion) through 2019”. It seems likely that luxury brands will increasingly utilize the “showroom” strategy whereby using their existing stores and outlets as a means for consumers to interact with the products but aiming to drive conversions and repeat sales through e-commerce. 

I believe it’s important to note that moving the luxury fashion market online doesn’t just provide brands with another channel to sell through. With the various metrics and data collection mediums available, there is a vast amount of customer data that these brands can collect through consumers’ e-commerce and mobile behaviour to better understand how to adapt their online strategies. There’s also much experimenting to be done to see whether brands should focus on selling through their own e-commerce sites or work closely with their department store distributors to build a stronger presence on their websites. As the luxury retail online continues to grow in the near future, it's interesting to consider whether an e-commerce storefront can ever render the luxury storefront obsolete.

Article inspiration source: http://www.businessoffashion.com/articles/news-analysis/luxury-web-battle-looms-as-lvmh-hugo-boss-develop-e-commerce