Luxury brands still reluctant to embrace e-commerce

(WCT) Many global high-end fashion brands are still hesitant to fully embrace e-commerce despite consumers all over the world showing interest in buying goods online, according to the website of Shanghai's China Business News.

Many global luxury brands believe that high-end fashion should have its own unique sales strategies and that embracing the e-commerce would disrupt industry marketing models, the report said.

Luxury brands consider that embracing e-commerce channels would unsettle production and sales schedules, said the report. Stocking online stores would would pressure on limited supplies and revenue cycles could become altered from the steady growth associated with these brands to more erratic patterns throughout the year.

Online shipping also posses security risks, as the products are vulnerable en route and could be swapped and sold illegally while customers end up with counterfeit merchandise, said the report.

Pricing will be difficult to control between exchange rates and tariffs. Luxury companies usually price products differently around the world, something less feasible with online stories, the report said.

Promotional sales have been the closest thing most luxury brands have come to selling online. Many global brands conduct flash sales on Amazon and other online retailers. This is a way for brands to clear out stock, an industry insider said.

Brands typically launch a product before the coming season and sell it at a price cut when during the season. For example, a pair of summer shoes will come on the market in March. There may be a 20% discount in July moving to 50% in August. The shoes subsequently end up in an outlet after the season is over. With flash sales, goods can sell out in a few days, eliminating the need for warehouse space.

Many of the big-name brands secure their merchandise by using their own logistics company. Chanel and Prada put the delivery company's name on the package instead of their own and wrap the product in three layers. Savvy consumers who purchase goods on the internet can choose a delivery company they trust if they are unsatisfied with an unknown logistics company.

Over the years, luxury brands have built their reputation as both high fashion and highly adaptable to new technology as a part of their retail strategy. E-commerce is no different: consumers can get cheaper products in a shorter amount of time and brands can draw off the work done by their competitors, amounting to substantial improvement in the sector, said GachouchaKretz, a luxury brands marketing professor at the Institut Superieur de Commerce de Paris.

Source: Want China Times