Monthly Archives: September 2020

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The Relationship Between Luxury Fashion Brands and Online Retailers

Since the turn of the millennium, which ushered in the advent of real-time online interactions and eCommerce, several business outfits across the world have keyed into the oil wells of the internet. The onus behind most innovative products of this age is the convenience of use, which is precisely what most fashion retail stores have done for their customers – providing online services that give the customers ease of access. For the sake of clarification, online retailers are tech companies that serve as portals for the sales of products (and in some cases, services) on the internet.

It was easy for us, and coming fashion brands to catch on in the trend of providing online services by providing opportunities to place orders, make payments, offer feedback on a purchased item, or even return unsatisfactory products for replacement or refund. The luxury brands were, however, slow in adjusting to the new normal of the internet age. Until recently, brands like Givenchy, Balenciaga, Gucci, Zara, Dolce and Gabbana, Versace, Louis Vuitton did not provide platforms of online shopping for their customers.

However, collaborations with online fashion retailers like Net-a-Porter, Farfetch, Gilt Groupe, Mytheresa, Moda Operandi, Ssense, Luisa Via Roma, to mention a few, have made several luxury products available for online purchase. With lockdown restrictions during the COVID-19 pandemic preventing customers from visiting physical stores of luxury brands, and the impending realities of shop foreclosures caused by dwindling market shares; going online and improving online presence became an imperative for most luxury brands.

Online retailer Ssense, which grew from a computer engineer’s undergraduate project, today commands respect in the online fashion retail ecosystem. Similarly, Farfetch is another example of a tech company that has invested in the fashion industry. After acquiring the Browns retail store chains of London, Farfetch started providing online services that allow customers to surf through a multi-brand online boutique for luxury products.

Reasons for luxury brands

After reluctantly allowing the sales of their products on select online retail stores, many of the luxury brands could not help but notice the increase in their sales figures. Markets that these exclusive luxury brands had limited access to before now have been thrown open; this is an indication that the shopping method of always having to visit a stone and mortar shopping space was a restraint on maximizing the market shares of these brands. With the availability of package delivery services like Amazon, any person that has the financial wherewithal from any corner of the globe can easily place an order.

Sales from physical stores of luxury brands still hold a large percentage of their overall sales. However, we can boldly make the deduction that the recent climb in the figures of online purchases and the synergy between online retail stores and luxury brands have a visible link. The worst that could happen to this cooperation, of luxury brands and online retailers, is if luxury brands were to decide in favor of ditching their accredited online retail partners to provide customized retail services for their customers only on their domain websites. The online traffic, social media presence, and following enjoyed by some of the online retailers will likely make such an extreme compromise improbable.