Luxury brands are the fastest growing section of the Global eCommerce market
Despite the exponential growth of online retail in recent years, the purchasing of luxury brands online lagged a little behind. That has changed. Luxury brands are currently seeing larger growth than any other area of online sales. Before 2015, luxury goods had trailed a little behind the general eCommerce market, but that’s quickly becoming old news. The figures are in, and over a quarter of consumers have bought a luxury item online in the past year.
The last year has seen four times more consumers make purchases from luxury brands, in comparison to the previous two years. Projections are even more promising, with online sales predicted to account for 40% of luxury purchases by 2020. By all accounts, the retail space for luxury brands is set for monumental growth over the next decade.
According to the Future of Retail report, key to this movement towards luxury brands will be the millennials. Those aged 18 to 25 are key industry drivers, with a third of consumers in this age bracket purchasing a luxury brand item in the past year. This would suggest that the massive growth predicted in the coming years will be largely led by the younger generation.
Catering to the millennials’ expectations will be an important part of the online retail strategy for luxury brands, but they’re not the only consumers with a taste for the finer things. Older generations are also open to acquiring luxury products online, and there are huge opportunities for any retailer hoping to make a splash with a more personalized online shopping experience.
Currently, those that buy luxury goods online tend to be frequent purchasers. This means they regularly shop online (often at least once a week), and are comfortable with the process. As general online retail grows, and over time the number of those classified as frequent shoppers increases, so too will the growth of luxury brands online. As consumer trust in eCommerce grows, so too will their comfort with luxury item purchasing.
Luxury brand shoppers have indicated that they expect a more personalized experience when dealing with luxury items. Online retailers should approach the opportunity carefully, and ensure they’ve created an online shopping experience which thoroughly reflects their brand standards. Those spending considerable amounts of money online will anticipate a seamless buyer’s experience from start to finish.
Despite this obvious wealth of opportunity, over 40% of luxury brands still haven’t entered the online retail space. Although, recent months have seen brands, that previously wouldn’t have considered online retail, shifting in attitude.
Luxury brands will need to capitalize on the opportunities presented by cross border eCommerce if they’re to truly tap into this growing market. With Millennials predicted to spend more on luxury brands in the coming years, and such a large section of the luxury brands market share set to lean toward the online retail space, it would be inadvisable to ignore online shoppers. As people grow more comfortable with the convenience of online shopping, they will spend more and more.
It is worth noting that online shoppers will expect the purchasing experience to reflect the luxury brand’s standards. This means presenting a personalized shopping experience that allows them to seamlessly buy whatever they’re looking for with ease. Whether luxury brands want to accept it or not, eCommerce is a big part of their future. Frequent shoppers will expect to be able to purchase luxury brands online, it’s the savvy retailer’s job to be ready and waiting when they come looking.