Luxury brands embrace bloggers and the internet

Exclusive and luxury labels are finally catching up with the rest of the world and are now beginning to embrace the internet.

Although online sales of luxury goods still only account for 2.6% of a market worth 172 billion euros, they are growing at a rate of 20% per year, according to what Italy luxury foundation Altagamma said in its “Digital Luxury Experience” report.

It was reported late last week that fashion bloggers will help propel online sales of designer clothes, jewels and luxury cars to more than 11 billion euros in 2015.

Brands such as Burberry, Tiffany and Gucci are increasing exposure to social media to connect with a new generation born when mobiles and Internet were already there. And these brands are doing a great job of it so far. Burberry is widely renowned for their extremely successful Facebook page that boasts over 14 million likes.

With such a strong following, it is no surprise that blogs and social media are beginning to be the ones setting trends more than fashion critics, with one out of two customers turning to Facebook or Twitter for advice before buying, the study said. Fashion bloggers are now the ones that get the front row invitations to fashion shows and are asked to host special events and nights. Take Vogue’s most recent Fashion Night Out in London when Jimmy Choo turned to a host of bloggers to take the floor for the evening.

“Fashion bloggers are more and more powerful, especially in emerging markets like China,” Altagamma’s research head Francesco Di Lauro said.

It was also reported that luxury spending on the web also increases in times of austerity, as wealthy customers prefer to buy from the intimacy of their homes rather than in lavish stores. Another reason the top-floor luxury brands need to continue to explore the online space. With endless creative opportunities combined with digital capabilities and leveraging the huge audience that online can bring with it, we think exclusive brands should be focusing on this area right now.

Curated shopping. More than a flash idea

When we started plans for LuxDeco, flash deals were hot and success stories of businesses following this model were appearing everywhere. In our space OneKingsLane, Fab and Gilt Home were the global leaders that made big waves. There was also some competition in the UK but not on scale with the US companies.

With our existing experience in full-price, luxury, online retail, flash deals seemed a good option for our next venture. The impulse surrounding sales, limited availability and, of course, competitive pricing has proven appeal. We know we could target this to our niche and build a good business. But we’ve decided not to. We want to build a company for the future not just for today, so we made the decision to look forward. Watching how the web has been changing, we realised early on that flash deals are dying. Even Gilt, the leader in flash deals, has moved into full-price offerings.

Flash deals came about during the recession. During this time companies were caught off guard, leaving them with mountains of inventory. As a result brands were happy to sell this stock at a discount, even at a loss in some cases. But a few years down the line and the brands and manufacturers have adapted. There is now less stock being created. In some cases, top brands have also had to work at rebuilding the credibility they lost when they slashed their prices by up to 70%.

For this reason we wanted to take a different approach and built our business model around two ideas: discovery and curation. Rather than offering old-season stock, we wanted to be a destination to discover luxury, the latest trends and most sought-after pieces from the world’s best designers.

When it comes to affluent consumers, there are times when last-season products are just not good enough. For big spenders, price is not always an important factor, rather consumers want the best of what’s available and top quality at a reasonable price.

Since its early days, the web has been a great place to buy but not a great place to shop. And there is a difference. When you know what you are looking for buying is easy – you can find what you want on the internet within a few clicks. But what if you don’t?Where can you replicate the experience of seeing a product on display in a department store with all the trimmings a luxury store provides? Or where can you discover new brands that you may have never heard of before? In fashion this is possible online, for luxury homeware the choices have been limited. Without turning to a magazine or an interior designer who can tell you the best brand of glassware to go with your new dining table, it is more difficult to find about new collections, designers and  brands.

What we have learned from the flash deals is that time-limited availability and regular shopping events work well and thus these aspects have been incorporated into the core of our model. Other than that, we feel flash sales are becoming less and less popular. Rather we see the future of luxury e-commerce being centered around curated, online retail offerings.

The A Team

As we move closer to launch, now is a good time to look back on our first few months and reflect on some of the challenges Start Ups are commonly faced with.

Most entrepreneurs will say that raising money is the hardest part, but I disagree. Don’t get me wrong, it is a difficult, stressful and time-consuming process, and, if you’re scared of rejection then it’s certainly not going to be enjoyable task. But for me, the most important part of any Start Up is the team. Recruiting for a new venture is not easy  and finding a passionate and talented team that believe in the concept can mean the difference between success and failure.

Furthermore, I’m in a unique situation compared to most in that I have no co-founders, it’s just me and that in itself can be a challenge. With no one else to share the load and the stress, you have to turn to your team, this makes selecting a team even more important.

When I began the recruitment process for LuxDeco I knew I needed a combination of experienced players and super-talented young and hungry types who ticked the following boxes:

  • Passionate about the concept
  • Team player
  • Hungry for the challenge

We are now a week away from launching with a 15-strong team that, I believe, is one of the strongest in the industry. Not just because of their CVs or their amazing talents, but because of their passion and commitment for what we are trying to achieve.

As well as producing some amazing work thus far, the team that I am part of work well into the night to help their colleagues, are as excited about LuxDeco as I am, come into the office at the weekends and take on any challenge, no matter how big or small, that’s thrown in their direction.

If you are starting a new business and have a strong team in behind you, then the other challenges, like raising funds, become that little bit easier. And, if you’re as lucky as me, you will feel as though you work with 14 co-founders.

Affluent iOS users shape our design

As we haven’t launched yet (not long now!) we are still in a unique position to understand the market landscape and ensure we create the most enjoyable user experience for our customers.

By studying the analytics of our pre launch landing pages we gleaned some valuable insight into our affluent audience.

iOS devices are responsible for over 20% of our traffic. This is a fairly obvious statistic as iPad & iPhone can be considered luxuries in their own right, but it meant that we had to take this into consideration with every decision we have made during the design process.

We are investing a lot of time into iPad and mobile versions of LuxDeco but making sure the main website works as well on an iPad as it does a desktop pc was a challenge that we had to take into account. Hopefully when you see the site in action on your iPad you will appreciate the careful thought that has gone into making our iOS apps a delightful user experience.

As the late great Eva Zeisel noted: ”The best design just gets out of the way.”

PPR invests in online makeover

PPR – the luxury and lifestyle goods group – is making ecommerce a major strategic priority. The group, with brands such as Alexander McQueen and Yves Saint Laurent in its stable, aims to reach €1bn in online sales by 2020.

To reach this goal they have entered into a joint venture with YOOX – a digital retail company specialising in luxury and fashion – to develop the ecommerce capabilities of several of their leading brands: Alexander McQueen, Yves Saint Laurent, Bottega Veneta, Balenciaga and Sergio Rossi.

Traditionally, online has been a difficult space for luxury brands to manage. After all, how does one successfully sell clothing in the £5,000 to £10,000 price range in an online space? Well, Net-A-Porter, and Mr. Porter, just to name a few, are doing so with flying colours.

What we are yet to see, though, is a succession of brands across the industry and luxury market making the transition online successfully and seamlessly.

“It’s not an option. It’s not about ‘Should we go online or not?’ This is completely meaningless,” Francois-Henri Pinault, PPR’s chief executive told the Business of Fashion. “We need to enter this new digital world with different practices.”

Furthermore, Pinault has also come out and said that 20% of the turnover recorded by the typical bricks and mortar store is now linked to the internet in some way – be it conducting product research or locating the nearest store.

What is certain is that there is simply no longer denying the increasing importance of the ecommerce platform. And this news has us very excited about the shape of things to come for online and offline stores and the strategies that brands will employ in order to successfully inhabit an online presence.

M-Commerce on the up

The powers that be are predicting that by 2017 one in four online shopping transactions will be done using a mobile device.

Spectacularly, in 2011 the m-commerce market doubled in size to £42 billion and if this research (that was released in a report from ABI research) is anything to go off, it is likely that things will continue to go from strength to strength in the days to come.

The rise in the number of people clicking “Buy” on their mobiles is said to be attributed to the fast rate at which platforms, apps and services are being enhanced, optimised and integrated.

This will come as yet another set back to physical retail shops that are already struggling in the current climate. It will be interesting to see what strategies they put in place next to try and combat more customers logging online to make their purchases.

Why shoppable videos are engaging a luxury audience

Burberry is the latest luxury brand to showcase their recent collections by incorporating shoppable videos. So why are they becoming so important to the luxury brand experience?

Authentic storytelling has always been a sure-fire way to engage consumers with the emotional values of a luxury brand and being able to transform that story into a sale is  rapidly becoming a solid ecommerce strategy.

It’s not just about storytelling, shoppable video provides a powerful way of seamlessly introducing related products and cross sell opportunities with a fluid and engaging experience.

While the technology is still new and may be intimidating to some consumers, the shoppable video trend growing fast with an increasing number of brands pushing their marketing efforts towards the technology.

With brands like Burberry & Ralph Lauren making their move early, I’m sure there will soon be a few to follow and it is definitely something that we are looking into at Luxdeco.

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