Luxury brands used to consider e-commerce as a channel reserved for selling low to mid-range luxury goods. Selling online was indeed perceived as being inappropriate for a luxury company.

High-end items were thus reserved for the boutique stores. Luxury brands affirmed that affluent customers wouldn’t spend more than a certain amount for a luxury good online. Indeed, wouldn’t luxury shoppers always prefer a personalised customer service and tactile shopping experience?

That assumption is now being challenged.

By 2025, one-fifth of luxury sales will take place online

Net-A-Porter and Farfetch have successfully demonstrated that luxury consumers are willing to purchase high-end goods online at full retail price.

In parallel, digital is increasingly influencing how consumers make their purchase decisions. Research by McKinsey found that at least 40 percent of all luxury purchases are in some way influenced by a consumer online experience.

Millennials and Generation Z consumers drive 85% of luxury growth

The growing importance of digital for luxury is driven mostly by a generational shift,” explains Florine Eppe Beauloye, CEO of mOOnshot digital a marketing agency for premium and luxury brands. “While older shoppers have traditionally been the growth engine of luxury sales, affluent buyers born after 1980 – the Millennials and Generation Z consumers – are now making up over 30 percent of all luxury spending. More importantly, Millennials and Generation Z consumers generated 85 percent of the global luxury growth in 2017.

Luxury brands pivot their strategy to sell online

The Richemont group announced last month plans to purchase Yoox Net-A-Porter (YNAP) in 2018. YNAP is the largest digital pure-play luxury retailer. If the purchase goes through, Richemont would significantly strengthen its footing on online luxury retail.

After the launch of LVMH’s own multi-brand online retail last year, the competition to dominate high-end sales online is certainly heating up.

Retail Tech: How luxury brands tap into AI, AR, and Voice command

Beyond the retail strategy, technological innovations are also opening the door to new opportunities for luxury brands. Three major retail technology trends are particularly important for luxury leaders: augmented reality (AR), artificial intelligence (AI), and voice-controlled. Learning to master them will become increasingly critical for brands to gain market shares.

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Luxe Digital is the publication of reference for professionals of the luxury industry. A must-read among leaders of high-end brands and influencers responsible for shaping the future of luxury. We feature original content crafted with an informed and analytical point of view. Our goal is to connect and inspire the world’s leading luxury professionals with clarity and depth of understanding. Luxe Digital is brought to you by the senior leadership team of mOOnshot digital, a digital marketing agency for premium and luxury brands.