Omnichannel Digital Strategy for Luxury E-Commerce

Luxury brands need to prioritize e-commerce as a key element of their business strategy

Unfortunately, many luxury brands are falling behind in digitalization strategies. By establishing brand standards and creating digital touchpoints across all channels, luxury brands can integrate data and processes, gather feedback, and build a 360-degree view of their customers. An omnichannel digital strategy is crucial for personalization and delivering a positive customer experience.

E-commerce boom

The e-commerce market has been growing steadily for a decade now but, in the wake of the pandemic when the e-commerce market grew around fivefold in the UK, digital retail has cemented itself as just as, if not more important than traditional retail when it comes to B2C sales.

Though traditionally more centered around in-person luxury experiences, the luxury retail market has not been immune to the boom of e-commerce. For instance, several luxury brands, such as Gucci and Dior, have invested heavily in e-commerce strategy over the past few years in order to inspire, activate and engage customers across digital channels and platforms, even looking into metaverse opportunities in 2022. Forecasters expect one-fifth of personal luxury sales to take place online over the next couple of years and online sales of goods to more than triple from €20 billion in 2009 to €74 billion in 2025, without accounting for the role of online browsing in purchase decision-making.

With this in mind, it is abundantly clear that luxury brands can no longer treat digital presence as an added part of the sales experience, but must integrate e-commerce initiatives as a priority element of overall business strategy.

Luxury e-commerce is falling behind

Unfortunately, despite the digital retail trend, the majority of luxury brands are falling behind when it comes to digitalization strategies. Though online presence is nothing new for luxury brands, legacy brands in particular are only just now jumping on the digital strategy trend and investing significant financial capital into their digital marketing.

This may have something to do with the renaissance of in-store shopping in the post-pandemic luxury sector. It remains true that the majority of luxury shopping still happens in person as customers continue to enjoy the experience of going to a luxury store, inspecting and choosing high-value goods to walk away with. Unlike the classic retail shopping trip that often involves traipsing around the shops with fellow consumers and picking up items from vast shelves of available goods, the in-store visit is a luxury experience in itself for legacy brands.

Nevertheless, this does not negate the role of strong digital marketing for luxury brands as a significant enough portion of sales does happen online and, perhaps more significantly than this, in-store purchase decisions tend now to be informed by online research. Known as the ‘‘ROPO (research online, purchase offline) effect” modern customers considering high-value purchases feel more engaged with a brand and comfortable with completing in-store purchasing choices after first researching options online to consider the information they need about the brand and products. By 2025, 80% of all seller and buyer interactions will be influenced by online channels. Recognizing this vital stage and successfully embedding it into a digital strategy is consequently essential for luxury brands to remain competitive with their peers and effectively engage with their customer bases online.

Interested in learning how advanced digitalization strategies can accelerate your company’s growth? Contact our authors today to discuss how we can help.