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 Top brands such as Prada and LVMH's Christian Dior still baulk at
the idea of selling clothing online as well as through their plush
boutiques.
"Considering the level of sophistication and image of our
ready-to-wear, we feel the shopping experience has to remain
immaculate and in-store," says Stefano Cantino, head of marketing
and commercial development at Prada.
"You need the physical environment to try the product on and you
need an exclusive service which you can only get in a boutique."
But as more people choose to buy through a website instead of going
Rue St Honore or New Bond Street, that position looks increasingly
untenable. Brands whose goods are not available online risk losing
customers to rivals.
Luxury executives understand the Internet will be vital for future
sales, particularly to so-called Millennials -- web-savvy customers
born between 1980 and 2000.
Yet top brands such as LVMH's Louis Vuitton, Hermes, Prada and
Chanel have been slow to invest in e-commerce as other retail
sectors have done in the last decade.
Some have focused as much on the shopping experience as on the
products themselves, spending heavily on worldwide expansion and
revamping stores with help from famous designers.
"Many luxury brands have not figured out yet how to be innovative
and creative online," said Anant Sharma of consultancy Matter of
Form. "It looks like they are scared to try things out."
Sharma said many brands' websites mimicked the appearance of
Net-a-Porter's black-and-white portal. "If they had the same
approach to physical retail, we'd all be shopping in whitewashed
rooms with clothes lined up against the four walls."
Immediately after the Yoox/NAP deal was unveiled last month, Chanel
said it would start retailing online next year. This month, it is
selling a new jewelry line exclusively through Net-a-Porter (NAP)
for just three weeks.
"The merger between Yoox and NAP sends the message that you need to
be online or you may be out of the game," Euromonitor luxury goods
analyst Fflur Roberts said.
Euromonitor expects 40 percent of all luxury goods sales will be
made via the Internet in less than five years.
Online annual luxury goods sales have been growing at 15-25 percent
while the industry's average growth rate has slumped to 5 percent
this year from above 10 percent four years ago as brands have
completed big global roll-outs.
Analysts estimate that 5-6 percent of luxury goods are purchased
online, although that jumps to around 8 percent for leather goods
such as shoes and handbags.
Designer websites vary in usability but few offer customers as much
help as sites like NAP, which shows clothes on models, gives details
of fit and sizing and carries styling tips.
Prada's e-commerce site carries no ready-to-wear, sticking to bags,
shoes and other accessories.
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Kering's Saint Laurent and Gucci have slicker sites, offering a wide
range of clothing and proposing complete looks. Saint Laurent also
features designer Hedi Slimane's black and white photographs of
musicians such as Marilyn Manson and Marianne Faithful.
But Hermes's iconic 8,000 euro Birkin or Kelly bags still cannot be
bought online -- and may take more than year to arrive after being
ordered from a store.
DEPARTMENT STORES PUSH
While many big luxury brands are still figuring out an Internet
strategy, high-end department stores already sell their products
online.
The Neiman Marcus chain, which includes New York's Bergdorf Goodman,
does 24 percent of its business online, up from 15 percent five or
six years ago. Last year, it acquired German fashion online retailer
My Theresa, aiming to better serve customers outside the United
States.
London's Harrods, whose website gets 3 million visitors a month and
sells brands such as Valentino and LVMH's Givenchy, is also stepping
up online investment.
"Our customer demands an omni-channel shopping experience, and to
remain at the forefront of luxury retail we need to respond to
this," Harrods managing director Michael Ward said.
Chief Executive Bernard Arnault said at LVMH's annual general
meeting last week that "more and more products would be sold online"
and the group was "currently adapting to this situation".
LVMH labels such as Fendi, Kenzo and Emilio Pucci already offer many
products online -- Fendi sells 750 euro baguette bags and 6,180 euro
blue feathered dresses -- but Louis Vuitton sells only accessories,
pens, watches and jewelry.
Richemont's Cartier brand has sold jewelry online in the United
States since 2010 and its online store now ranks third behind its
two main flagships in terms of sales.
Privately owned Patek Philippe, does not sell any of its 10,000 euro
plus timepieces on the Internet, however, and told Reuters last
month it has no intention of doing so.
(Editing by Catherine Evans)
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