Magazine article Marketing

Andrew Walmsley on Digital: Web Should Be in the Lap of Luxury

Magazine article Marketing

Andrew Walmsley on Digital: Web Should Be in the Lap of Luxury

Article excerpt

Although only 16% of the world connects to the internet via broadband, this small group represents 78% of the world's earnings.

This single fact lies behind the extraordinary growth in online retail over the past 10 years. In 2006, total online retail spend grew by 33.4%, 13 times faster than the retail sector, and online clothing sales alone expanded over 40% in that year. According to the Office for National Statistics, by 2007, 70% of UK web users had bought online.

But as the market has changed beyond recognition for books, music, consumer electronics and insurance, one group of brands has lagged behind, resisting the trend to sell direct, and often discouraging the listing of its products with online retailers.

Concerned that the web didn't offer the quality environment they required to sustain their premium positioning, many luxury brands have steered clear of selling online - some electing instead to have 'brand experience' sites only. Despite this, according to the Luxury Institute, most luxury brand websites are poorly designed, with MyDeco's founder Brent Hoberman pointing to their widespread use of Flash animation, making them all but invisible to search engines.

Journalist Tyler Brule did the rounds of super-premium brands for his Monocle magazine and website, expecting dazzling sites and web-savvy marketing directors. 'How wrong I was,' he told Luxury Briefing.

More than 9.5m people worldwide have assets of over dollars 1m, and the luxury goods market is outperforming many - growing at more than 20% a year in the UK. Since these people are much more likely to be heavy web users, it's not surprising that the online luxury goods market is expected to double in the next three years.

In Japan, Ledbury Research reports that 39% of high earners have purchased an item for more than pounds 1000 online, with 28% in the US and 26% in the UK also having done so.

Web magazine Net-a-Porter.com has been mining this seam for the past eight years, successfully creating a market for high fashion online. The site cleverly reinvents the experiences of boutique shopping through the quality of its editorial - a Vogue where you can buy the clothes. Its same-day delivery and beautiful packaging have helped to make shopping online exciting.

Sites such as Net-a-Porter, Myprestigium, CoutureLab and UK start-up iconicchic.com are filling the void left by the big brands' reluctance to engage in the online space and competing with high-street retailers as they develop their online offering too. …

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