With luxury online retailers closing down over the last couple of months, is this a sign that high spend buyers still prefer a face-to-face experience in retail stores?
Conde Nast has abandoned Style.com - which it had pumped more than $100 million into amid claims it ‘would revolutionise online fashion retail’ – in favour of a deal with Farfetch.
Now matchesfashion.com has announced it is exploring potential sale options.
I have to say there’s still something excessively satisfying in watching the sales assistant carefully gift wrap and place your purchase in a designer bag, before parading through the shopping mall on your purchase high.
So is there still a place for luxury retailers online?
The buzzword that drives retail today is "experience". And if luxury retail wants to survive it must capitalise on this to keep customer engaged.
Spending is shifting from traditional products to experiences. A Boston Consulting Group report found that of the $1.8 trillion spent on luxuries in 2013, almost 55% of that was luxury experiences.
A Bain & Company report reveals that although 70% of high-end purchases are influenced by online interactions, physical stores will continue to play a critical role as 75% of sales will still occur in a physical location by 2025.
Technologies in virtual reality (VR) and augmented reality (AR) have the potential to revolutionise luxury retail, blending online with real life.
VR immerses the consumer in a multi-sensory simulated world at the touch of a button, while AR has the ability to bring the virtual world into the real one.
Farfetch, a global digital platform for independent luxury boutiques, recently held an event to showcase The Store of the Future where it unveiled an array of new technologies to bridge the online and offline worlds.
Imagine, if you will, facial recognition which allows customised sales pitches according to a customer’s mood, or interactive holographic displaysFarfetch founder José Neves envisions the new retail era to be one of “augmented retail” where the consumer shifts seamlessly between the digital and physical realms.
It seems the human experience is still an important aspect in the sale of luxury goods. If brands want to be successful online, they will need to find ways to keep that experience alive.
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