The online retailer has spent nearly $300 million acquiring three shipping software vendors over the past nine months.
Many have been slow to offer the white-glove treatment their upscale customers expect.
Although wealthy consumers are among the most active online shoppers, most luxury brands have been slow to offer the special treatment expected by their upscale customers, according to a new report from eMarketer Digital Intelligence. The result is that lesser-known retailers, flash sale sites and mass merchandisers are moving in to take market share.
“Many luxury brands, slow to translate store success to e-commerce, are banking too much on their reputation,” says Jeffrey Grau, eMarketer senior analyst and author of the report. “Affluent customers expect luxury retailers’ web sites to replicate the same shopping experience they offer in their stores.”
Many luxury retailers have been slow to launch fully transactional web sites, eMarketer found. That leaves them at a disadvantage compared with other online retailers vying for affluent consumers, including online boutiques, online mass merchants not normally associated with selling luxury goods, such as Costco Wholesale Corp., No. 15 in the Internet Retailer Top 500 Guide, and flash sale sites like Gilt Groupe, No. 140.
“These alternative destinations are making inroads with the new breed of luxury shoppers who make purchase decisions based on value and information, rather than brand image,” Grau says.
A good model for an online luxury retail site is Net-a-Porter LLC, No. 83 in the Top 500 Guide, Grau says. The site generates 2.5 million to 3 million visitors a month, the report says.
“Net-a-Porter makes its largely affluent customer base feel pampered by offering white-glove service in which items arrive in the retailer’s sturdy black box with a matching ribbon,” he says. “And it offers wedding packaging, an option dubbed ‘discreet’, as well as basic, gift, and shoe packaging.”
The retailer also offers same-day delivery service in Manhattan and London, and free returns within 14 days of receiving an order.
The Net-A-Porter site allows customers to shop the site using the clothing, bags, shoes and accessories links, browsing the magazine section, or by designer. Shoppers can zoom in from every angle on trims, textures and seams, and determine if a size or color is available. The retailer also offers an app for customers who prefer to shop via their iPad, from Apple Inc., No. 4.
“Wealthy consumers are among a new breed of online shoppers who are not easily swayed by marketing hype,” Grau says. “They feel empowered by the Internet and diligently research online to find good deals and assess product quality. And they feel entitled to a superior online shopping experience with rich visual content and high-class treatment.”