Posted in new media thoughts

New philosophy of online luxury retailing, how to be the winner?

Will you spend a thousand dollar on a website, buy a luxury good without even touch it, then wait for a week for delivery?

Bruno Pavlovsky, the fashion president at Chanel, said “no” a few years ago, for he believed fashion should be touched, understood and experienced. However, when luxury goods meet with technology, the philosophy of selling and buying has already changed.

2015 has witnessed a series of big events in online luxury retail. Yoox and Net-a-porter, two major players in global market have decided to merge. Traditional luxury brands such as Fendi and Chanel, who were always reluctant to launch online selling, have announced to step into e-commerce by 2016. In China, e-commerce platforms like Tmall and JD have extended their cooperation with global luxury brands, along with multiple small and medium-sized companies constantly entering the market.

New philosophy of luxury purchasing

The traditional way of selling luxury goods is tightly related to enhancing social status and self-realization. In this case, service, as well as the offline shopping experience is of great importance in addition to luxury goods themselves.

By contrast, in terms of purchasing experience, online platforms make luxury brands much resemble ordinary brands. In other word, for customers, online retail has reduced their gratification of enjoying high-end service and acquisition of status. For brands themselves, they are concerning about the risk of degrading brand image, due to counterfeit products or extremely sharp discounts provided by third-party platforms online.

Meanwhile, the promising part is that, with a reasonable discount and rich choices of products online, the whole supply chain will be much healthier and profitable. Take online third-party retail platform as an example, customers can certainly to pay less and choose wisely. Suppliers, say both brands and distributors, can get more products sold, especially towards those countries with huge potential markets like India and Brics.

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Furthermore, the new philosophy of online luxury retail is shifting the emphasis from in-shop experience to gratification after purchase, starting from the moment a consumer opens the express package.

To be specific, it is about-

  • the quality of product (whether it is genuine or fake)
  • the category of product (whether it is the latest collection around the world)
  • the emotional satisfactions (whether it matches the brand, and the class of people it represent for)

Embrace the supplier, improve the service

In the long run, the relationship among suppliers, e-commerce platforms and consumers should be settled in a healthy ecology, meaning that every part can get benefit through the whole chain. To reach this equilibrium and survive, new philosophy should be wisely utilised.

The quality of product is the most essential but hard to control part, particularly for third-party platforms, regardless B2C or C2C. As shown in the graph, the majority of counterfeit foods in western countries come from watches, jewellery, handbags and wallets etc. Sources even mentioned that a large part of Chinese online retailers sell fake products, which has already been an unspoken rule in industry.


To solve this problem, a normalised process of brand authorisation is urgently required. Not only could consumers buy reliable goods, but also the brands will be less likely to face with risk of fake or unauthorised products sold by online retailers.

What’s more, a good relationship with suppliers will also improve the categories of products the online retailer get. That is to say, if retailers want to sell the latest collection of a luxury brand, they have to cooperate with the brand formally or indirectly, meaning the cooperation with distributors or offline retailers, instead of the brands directly. So far, the later solution has been more practical for those smaller and newly established platforms.

As to emotional satisfactory, it should never be overlooked. Although online shopping has substituted offline service to some extent, mental gratification is always one of the essences to brands and luxury industry. As mentioned above, the healthy collaboration with suppliers can contribute to product quality and categories, by which can further meet the emotional demands. In addition, service provided online is also a critical contributor, including packaging, delivery, after-sale service, consulting and membership, just name a few. Naturally, good reviews to the e-commerce platform will inversely attracting more brands seeking collaboration and confer authority.

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To sum up, from traditional offline luxury retailing to online, focuses have along shifted from in-shop service to after-purchase gratification. To improve the quality and category of products sold online, third-party platforms need to consolidate the cooperation with suppliers, either brands or distributors. Normalised authorization is extremely significant. Meanwhile, service provided online throughout visiting and purchasing should be carefully dealt with, considered as eternal truth in luxury industry.


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