Luxury Apparel Brands Embrace The Internet, But Are They Too Late To The Party?

Heavy internet users spend more on luxury, but luxury clothing brands have catching up to do

For over a decade, the web presence of a luxury clothing and apparel brand has been easy to predict -- a Flash-based catalog with beautiful images but no way to make a purchase.  These luxury brands have typically feared that selling online would dilute the experience of the brand, an experience they believed for too long that could only be had face-to-face in a department or luxury branded store.

However now, according to reporting from The New York Times (http://nyti.ms/9wANGu), luxury brands like Marc Jacobs, Jimmy Choo, and La Perla all are finally embracing e-commerce as a way to reach the highest-spending luxury consumer.  Their targeting is right, but they have lots of catching up to do.

"For too long, luxury apparel brands have ignored their best prospects online," Pam Danziger, president of Unity Marketing and lead researcher in the new study of internet shopping and social media use among 1,614 affluent luxury consumers (avg. income $239.3k.).

"A new survey among affluent shoppers found that those who spend the most time shopping online (what we identified as the 'heavy-user' segment) also spent twice as much buying luxuries through any venue -- online, instore or through direct mail -- as compared with those affluents who spent less time shopping on the internet."  The study, entitled How the Affluent Luxury Consumer Uses the Internet and Social Media: An In-Depth, found the typical luxury consumer averaged some 4.2 hours shopping online per week and spent about $5,000 on all fashion purchases, as compared with the heavy users who spent 9.5 hours on shopping-related activities weekly and averaged $9,600 on all fashion purchases in the three-month study period.

"Luxury clothing brands, seeing an exodus from traditional retail destinations like department stores, are right to turn to the internet to find the highest-spending luxury consumers.  However, the customer they find online may be different from the one that frequents the store, and these luxury brands need to be ready to respond," says Danziger.

Besides being highly active shopping online, these consumers share key demographics which help marketers identify their best potential customers.  The heavy-user is a woman under the age of 45 years, though nearly half of the heavy-users are men.  She is very affluent (with an average income of around $337,000.)  And, like many people with high incomes and demanding careers, she doesn't have a lot of extra time to go to the store.

"For the heavy-users who spend much more money buying luxury, the internet provides shopping experiences they value most:   Speed, convenience, and 24/7 access to brands and merchandise that no single store can match.   Further 55 percent of heavy users say they enjoy online shopping more than in store, as compared with 43 percent of affluents who are not classifed as 'heavy-users,'" Danziger explains.

"These high-value customers who prefer to shop online present a challenge for traditional-minded luxury brands that have been reluctant to embrace e-commerce as an acceptable shopping alternative to the bricks-and-mortar store.  But the message is clear.  These ultra-affluent young people are going to shop online, so luxury retailers must meet them there -- with the message, information, and options these shoppers most desire -- or they can let those dollars flow into another brand's pocket," Danziger says.  "Many luxury brands have a decade of catching up to do to learn how to effectively reach their online market, but those that do will find consumers willing to spend."