New Challenges for the Luxury Industry

While traditional channel marketing industry:  main sales in developed country, in traditional  store or department store space, is certainly not far from saturation, exacerbated by the economic crisis in major developed countries, companies have found a way to markets emerging and the use of new technologies.

Both options have advantages, first posed by the volume buyers of luxury goods in emerging countries, especially China. The new affluent classes of emerging countries have a greater degree of consumerism and greed of brands than their counterparts in more mature markets. Internet is also a key source of information for the middle and upper classes in these regions. Information they use in their trips to the West where tourists are becoming the most frequent buyers.

Emerging markets  and sales online issues.
The Asian giant must fight more against counterfeiting, which make much dent in the bottom line of luxury manufacturers. In addition, countries such as Russia and Brazil have seen their currencies have depreciated sharply, which has made many luxury goods are no longer accessible to a large part of its middle class.

An additional channel, such as online shopping, has advantages but also endanger characteristics that make them unique luxury items. One of the unique character of luxury goods, with the value of the experience of shopping for a luxury store, make the Internet a better place to communicate that to sell. We put such cases Burberry and Louis Vuitton.

Both with 17 million followers on Facebook. In both cases consumers consult, inform and share experiences, however Burberry sells a much larger percentage of the total online that Louis Vuitton. LV customers are much keener to attend its exclusive shops, receive a personalized and notice that they are buying as much a product of very high quality and living the experience of buying the product, which does not happen from the computer home. Actually, online sales seem to fit more premium products range, rather than luxury products with the highest range.

Large investments in Aizel.ru
Speaking of the emerging countries, we find an interesting platform Aizel.ru Russian Internet, which has signed cooperation contracts with brands like Gucci, Valentino and Moschino. Precisely one of the first brands that have accessed the online sale of their products to Russia, was Gucci. Now the boutique offers you the opportunity to pre-order  collection fall / winter 2015-2016. Another giant of fashion, Burberry, confirmed it is working on a similar scheme in the spring / summer 2016.

Due to the expansion of its brand portfolio Aizel.ru organized a photographic presentation of fashion in Milan, in close collaboration with Gucci, particularly in the Idroscalo park in Milan, on a Alain Isayeva stylist project and photographer Alan Gelati. A group of investors, headed by S. Kerimov, will invest more than EUR 14 million in the development of this online store.

The shareholding is made so far by the international Bonum Capital, a group that owns 41% shares, 41% of them belong to the founding company A. Trudely and 18% owned by Genome Ventures. Despite the difficult economic situation in Russia, investors are optimistic about the growth of Aizel.ru. Founded in 2011, in 2014 and despite the crisis that hit the Russian economy and the ruble, the sales growth of the company was more than 123%, and the average individual sale was of around 320 euros.

In the first quarter of this year the average check amount exceeded 400 euros. In late 2015, the boutique expects to have obtained 20,000 orders in more than 80 cities in Russia and countries of its orbit. The company plans to use the attraction of investments to improve technology, boost sales, expanding its portfolio of brands, to obtain an optimization of logistics and improve customer service.

Biyao.com, Chinese Internet platform avoiding intermediaries.
This Chinese virtual portal goes one step further in product strategy, as it allows the buyer of your online store get top brand products without intermediaries and without product logos. In this case a top quality product made (in China) is obtained by those marks, but without the corresponding company logo. Now it has suppliers for brands such as Burberry, Prada, Cartier, Nike and Under Armour among its  partners. The site expects to add men’s shoes, furniture and other categories of products in a few months. Guests can play with software-based settings to customize their purchases using 3-D models, a niche that has yet to take off in China.

So Bi Sheng sees it, its founder, is a businessman who wants to revolutionize e-commerce by reducing the excess inventory of manufacturers and intermediaries end the price leader. It should be noted that while additional revenue can be a luxury for traditional companies, away, as we have seen, the strategy of exclusivity, own brand awareness and personalized service of traditional luxury sector.

Talking about  virtual portals, TheLuxonomist.com our magazine is presented as an essential tool in the digital age to promote luxury brands and to guide the investor seeking attractive investing in shares of luxury companies.

Disclosure: Our magazine is not responsible for the views expressed in the article. The text was written freely expressing ideas, without receiving any compensation. The author has no business relationship with any of the companies whose shares are listed in this article.