How Does Luxury Translate Online?

Tuesday, April 20, 2010 | 9:28 AM

Labels: ,

Photo courtesy of

If every woman could buy a Chanel dress online in a few simple clicks, would that Chanel dress still be as desirable? Some might say that the limited number of women able to afford the dress secures its exclusivity; others that the sudden ease of access to the product negates its uniqueness. If you can walk into Burberry on New Bond Street and purchase a bag, is barring that same action online a necessary protective measure against the dilution of that brand’s exclusivity, or just plain inconvenient for the regular Burberry shopper who would like to be able to purchase through any and all available channels?

Luxury retailers remain undecided. At one end of the scale, Burberry now sells a wide range of its products directly online throughout Europe and the US.

More cautiously, Louis Vuitton, Gucci and Christian Dior have opened limited online boutiques in France and Germany, and brands like D&G, Calvin Klein and Donna Karan sell a variety of goods - mainly accessories and nightwear - through catalogue and high street retailers like John Lewis, Littlewoods Shop Direct Group and

In contrast, Chanel sells nothing at all on its site and is one of a cartel of luxury retailers who argue that customer service online cannot compare to that found in a boutique, and shopping over the Web negatively affects brand perception.

What is clear to see is a growing market for luxury apparel online. A 2008 report from Google and US research firm Unity Marketing which surveyed 1,000 people with a net worth of $1 million or more-and a yearly income of $175,000 or more- noted that designer clothing was respondents' favorite online purchase, followed by jewelry and accessories. In terms of their total expenditure on luxury, the Internet ultra-affluents spend three times more overall on luxury goods than the retail shopping ultra-affluents ($61,325 as compared with $20,411)[1].

The US leads the field in this respect and has done so for the last two or three years. However, in the UK too, shoppers seem to be happy spending more. The current online luxury market is estimated to be worth at 3.6 billion-euro ($4.9 billion), which Bain & Co. estimates grew by 20 percent in 2009 [2].A recent Online Trends 2010 Research Report sponsored by Kelkoo, found that the average price per item was also growing, with the proportion of shoppers prepared to spend £1,000 or more for a single product online increased in the UK from 12% in 2008 to 25% in 2009 [3]. One theory is that the very wealthy, who were not hugely affected by the recession were cautious all the same from 2008-09 in line with market fears, are now starting to spend again with more confidence.

Net-a-Porter is a luxury apparel online success story. Unique in its class in the UK, it has gained the confidence of both its customers and the brands that feed into its ever growing range. More than 2.5 million women view its pages each month, and the company has taken more than 1 million orders with sales of 120 million pounds in the year ending January 31 [4]. The recent acquisition of a 67 percent stake in the company by Cie. Financier Richemant SA, the world’s largest jeweler, valued the 10-year-old company at £350 million ($533 million). Aside from its attractive business proposition (great range, easy site navigation, extensive shipping parameters and free returns), Net-a-Porter also nurtures its customer base through creative interactions via newsletters, Facebook, Twitter and You Tube.

Whether all the big fashion houses are ready to start selling all their products to an online market or not, there is a concerted move towards interacting with online customers. With more and more shoppers subscribing to the ROPO (Research Online Purchase Offline) phenomenon, no retailer can afford to ignore the opportunity to engage with their customers on the Web. Key results from a recent study with Auchan in France showed that ROPO is responsible for 13% of offline sales and each euro invested in paid search delivers more than €20 offline in-store [5].

The 2008 Google and Unity Marketing webinar noted that nearly 80% of “affluent luxury consumers” belong to a social network [6] (a number that is likely to have risen by 2010), so it is no surprise that the likes of Burberry has its own Facebook page with over 900,000 followers and Gucci, Louis Vuitton, Chloe and more have newsletter sign up pages to inform fans of the brand of their latest news and trends. Chanel even broadcasts a podcast and has a downloadable iPhone app, to keep in touch with its customers about breaking trends and direct them to store.

For those already serving their customers directly online, or considering doing so, various steps can be taken to ensure their advertising on Google targets the right users:
  • Concentrate on your brand name and combine it with all the products you sell. Remember that some of your customers will be browsing while some will already have a good idea of what they are looking, so include keywords from the very vague (e.g. “Burberry mac”) to the highly specific (“Burberry raglan swing trench”).
  • Experiment with generic terms: a bit of a hot potato, with some high-end retailers refusing to accept the value of mainstream traffic terms, and others insisting on their importance in a wider picture which sees them assisting sales. Test them for yourself.
  • Include Designer Generic terms. If the value of straight generics (“dress shopping”, “leather handbag”, etc.) isn’t convincing, don’t forget to include the queries which are generic yet luxury-minded: “designer bag”, “designer brand dresses”, “shop designer clothes”, etc.
  • Consider targeting catwalk, fashion week or ad commercial searches with text or display ads or both. Keywords like “London fashion week”, “new Gucci tv ad”, “Chanel runway”, “Gucci s/s show 2010” are rising searches on both the Search Network and on You Tube.
  • Include negatives to prevent your ad showing when people search for your brand in a less desirable way (e.g. “wholesale”, “free”, “second hand”, “used”, “eBay”, etc.
  • Don’t forget, you can also drive traffic to your site by including campaigns for non-brand searches that still relate to your brand, e.g. “Rolex downloads”, “Chloe news”, “Louboutin email sign up”. Direct these users to the correct part of the website with your landing page.
  • Be clear in your ads that you are the official site and/or include the ™ sign by your brand name, to let your customers know they are visiting the authentic site. Although others may bid on your brand, only you may use this symbol.
  • Use the Google Keyword Tool to identify additional or new ideas for keywords based upon internal Google data. The tool indicates how competitive terms are as well as search volumes for those keywords, giving a good idea of the likely keyword opportunities and costs involved. It can also identify new ways to target your customers. For example, if there are increasing searches for “Valentino a/w 09 catwalk” maybe you should think about uploading videos of this show onto YouTube, your website or both and using Google’s search and content networks to direct your customers to them.
  • Combine your search campaign with GCN and YouTube targeting. Compelling banners and videos are a great way to engage with your luxury audience and can be used to reinforce core brand values. Upload catwalk shows complete with soundtracks, and use Google’s Promoted Video ads to direct your customers to these.
[1] "The Luxury Report 2008: Who Buys Luxury, What They Buy and Why They Buy", Unity Marketing
[3] Kelkoo Press Release Center: eretail-to-buck-trend-in-2010.html
“Net-a-Porter founder poised to bag £50m” by Elizabeth Riby and Hannah Kuchler,
[5] Google /Auchan Study 2009
Google Ultra-Luxury Consumer Study 2008