Five Ways to Optimize Luxury Online Sales Channels

The big numbers at luxury retailers typically appear on price tags, but here's one to which they should pay close attention: 204.

That would be $204 billion, the forecast for overall e-commerce revenues for 2008—a projected jump of 17% over 2007. And if history is any indication, you can expect the luxury market to keep pace. Upscale apparel alone accounted for $1 billion in online sales in 2007, according to Forrester Research.

Considering the stakes, it's no surprise that the online sales channel is becoming increasingly important to the bottom line of top-shelf brands as consumers of luxury products and services continue to demonstrate their willingness to spend as much through commerce-enabled Web sites as they do in stores.

Despite this trend, many luxury brands continue to separate their online and mainline marketing efforts, confusing customers with disconnected messaging and missing golden opportunities to cross-support expensive marketing initiatives.

What few realize is that the best experience—the experience that the customer wants—results when all channels work together and complement each other.

Here are five guiding principles to help brands achieve this goal:

1. Web sites are the perfect venues for impulse purchasers and those who want to do deep research on your product or service

Optimize your Web site to capture those impulse and research opportunities. For example, brands can take advantage of customers' desire for immediate gratification by making all merchandise available online, no matter how expensive. Even if it's a bespoke item with a flexible price, take a deposit and give your customer the chance to commit.

Web sites also allow your clients to shop in privacy: on their own terms and on their own turf. Customers who don't have access to or want to try on the brand before shopping in person can be encouraged to become part of an online community via a blog, discussion forum or email.

Consider luxury timepiece maker Jaeger-LeCoultre, which has created a successful blog called "Le Club," where watch aficionados congregate to discuss all things luxe and horological.

2. Understand the strengths of email and use it to its fullest potential

Give customers a sneak peek at new products or services, making them the first to know. Segment emails on a one-to-one basis, something luxury customers love. For example, luxury apparel and accessories online retailer Net-a-Porter.com recently implemented a sophisticated email marketing tool that sends customers an email twice weekly. Each email message is built dynamically based on a customer's preferences and past shopping history

Finally, do not use email to sell to luxury consumers. Use it to drive traffic to your Web site, which should be geared toward pulling people into the purchase.

3. Lean into social media applications, where appropriate

To build brand equity with the younger demographic especially, luxury brands should consider establishing a presence and developing useful widgets for sites like ASmallWorld and Facebook. Social media sites feed back very rich data—much richer than do online ads.

Also consider starting dialogues with key bloggers—just don't try to own the conversation. A great example of the right way to handle it: Chanel recently flew about a dozen bloggers to Paris to tour Chanel's apartment and then cut them loose to report on the experience as each saw fit.

4. Optimize the in-store experience to be highly experiential (and then push out information about what happens there in email and on the Web site)

Attend to all sensory aspects of brick-and-mortar stores, from touch to sight to smell. Items should be carefully merchandised to guide customers on a journey, not overwhelm them with choices.

And hire sales people who have a heart for service, encouraging them to create personal and emotional peak experiences for each customer.

In-store events can also be created, promoted through email and on the Web site to better leverage those channels to support the overall brand.

5. Do whatever is needed to ensure the online and in-person experiences complement rather than oppose each other

The e-commerce Web site should be "the store that follows you home." Consider your core customer who has purchased from you many times. She should be able to go online and have a similar experience that reflects all the knowledge gathered by the brand about her—what she's bought, for whom, how often—as if she had been with a sales associate in store.

Similarly, the sophisticated advice dispensed by your knowledgeable staff should be mirrored online. Of all online luxury retailers, Diane von Furstenberg DVF.com does the best job of translating trends from runway to reality, helping clients connect what goes on there to what is going on in their closets.

* * *

As the luxury market continues to expand, customers' expectations and craving for a seamless luxury experience with your brand are growing along with it. Consumers may not be actively aware of the disconnections right now, but their technological acumen and awareness have been known to mature overnight.

Smart brands are already facilitating channel integration. They know they can't afford to wait.

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ABOUT THE AUTHOR

Suzanne Hader is principal of 400twin (www.400twin.com), a New York City-based consulting firm that provides research and strategic direction for luxury brands. She can be reached at shader@400twin.com.

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