How 3 high-end brands balance luxury with e-commerce

On April 1, super-luxury brand Chanel announced that it would be opening an e-commerce store this fall. It wasn’t an April Fool’s joke, and legions of fashion-forward Frenchwomen would have been forgiven for gasping in shock, since it was only in 2013 that Chanel’s global director of fashion Bruno Pavlovsky said that “fashion is about clothing, and clothing you need to see, to feel, to understand.”

Luxury e-commerce is increasing its presence across the board: Fendi announced in January that they would have e-commerce offerings by spring this year, and Tom Ford announced last year that it would start selling its $2,000 bags online. Business of Fashion reported in October that by 2020, online is expected to drive 40 percent of sales growth for luxury brands.

Even though Chanel and Fendi caved, only 40 percent of luxury retailers sell online, according to Lucie Greene, worldwide director of JWT Intelligence. “E-commerce has been described as the ‘next China’ for luxury in terms of opportunity,” she said.

According to Sucharita Mulpuru-Kodali, an analyst at Forrester, luxury brands initially hesitated to go online because they were more interested in preserving the in-store experience than making sales.

“A lot of the luxury brands have held back on online sales because they weren’t always chasing dollars,” she said. “But the likelihood of [customers] having a physical experience with an environment is as likely as ever before. You’re just enabling them to purchase more if you give them an online opportunity, and I think brands realize that.”

And even Chanel’s big step is more like a faltering tip-toe forward: While the exact format of that house’s online store is currently unknown, don’t expect to be able to send the design house’s couture into your digital shopping bag. Pavlovsky called it “more of an e-service than a pure e-commerce approach.”

While it remains to be seen how Chanel’s e-commerce offering will pan out, here’s how fellow luxury brands Burberry, Michael Kors and Hermès have managed to remain high-end while selling online.

Michael Kors
Michael Kors has embraced the online store, offering its clothing, bags, watches and shoes for purchase online. Last year, the luxury brand dedicated its own resources to the e-commerce storefront, bringing the technology in-house. Previously, the company’s website was powered by Neiman Marcus. According to an earnings call in February 2015, the company logged 73 percent growth in online sales in Q3.

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Michael Kors’ homepage

Michael Kors doesn’t break out its online sales, but CEO John Idol said during the call that overall e-commerce accounts for 7 percent of North American sales. Idol said that he expects that number to increase to 20 percent.

The brand isn’t shy about taking on new platforms, either. Michael Kors promotes its products on Instagram via InstaKors, an email newsletter that delivers product information to followers’ email if they’ve liked a Michael Kors Instagram tagged with #InstaKors. In February, it also joined Snapchat. However, Michael Kors’ lux image has slightly dulled — its ubiquity has led industry analysts to question whether its brand is being ruined by how available it is.

Burberry’s online store is the leading example of digital luxury, per a 2014 analysis report by financial services firm by Exane BNP Paribas that analyzed reach and customer experience. (LVMH-owned Céline was at the bottom of the digital pack, unsurprisingly; the brand’s creative director Phoebe Philo has been quoted as saying, “I’d rather walk down the street naked than join Facebook.”)

The brand doesn’t discriminate when it comes to its online offerings: Everything from sunglasses to its checked cape, a celebrity favorite, is available for purchase, but it has managed to translate a lux experience online. That’s not always easy for high-end brands, according to Hunter Tura, president and CEO of Bruce Mau Design.

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Burberry’s online coat store

“Luxury is always a challenging thing to pull off in a digital context. The keys to luxury are personalization, authenticity and the feel of materials,” things that are tricky to translate online, said Tura.

But Burberry’s homepage is a scroll of eye-catching imagery, model poses you’d see in a magazine spread, and upcoming fashion-show and event details — the combination of which makes for an “interesting creative platform,” according to Tura.

The brand’s dedication to its online storefront also puts it at an advantage for younger shoppers.

“Pulling digital all the way through a strategy for luxury retailers is a rarity and needs top-down vision,” said Amy Gale, associate planning director at Isobar US. “It’s sad that Burberry is one of the few that come to mind here. We see more success for mass-market luxury brands who have realized the importance of digital to engage with younger buyers.”

In an imitation of its overall brand, Hermès’ e-commerce strong suit is its scarves.

A special microsite called “House of Scarves” takes shoppers on scroll of scarf patterns depicted in a hand-drawn house, complete with moving graphics. The overall online store is also made up of hand-sketched illustrations (including the “models” that are depicted wearing products), but according to Tura, that approach doesn’t work across the entire online store.

“It’s a disappointing online presence because it doesn’t feel luxury,” said Tura of the main Hermès store. “I wish the rest of the site had the degree of energy and whimsy [of the House of Scarves].”

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Hermès’ House of Scarves

But it’s possible that Hermès could have gone far too overboard. Mulpuru-Kodali said that in order to differentiate themselves from mass retailers, luxury brands sometimes go too far in the other direction.

“They’ll over-correct and do something too elaborate that will crash Web browsers. So they don’t always have a great rep for executing that well digitally,” she said. “They have to hire people who know design and know how far they can push the design.”

But what’s most important, beyond user experience, is that luxury brands recognize that having an online store doesn’t “denigrate the brand.” “It’s so ubiquitous now that the online experience reinforces the physical experience,” said Mulpuru-Kodali. “There are ways to have a very high-class experience online.”

Homepage image via Burberry

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