Home Money The turning of the tide for luxury e-commerce? Shoppers now seeking personal in-store experiences

The turning of the tide for luxury e-commerce? Shoppers now seeking personal in-store experiences

by Elijah
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Teamwork: Kate Moss for Saint Lauren. High-end e-commerce fashion platforms like loss-making Yoox Net-A-Porter are struggling as shoppers demand personalized shopping experiences again

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There is great concern in the world of luxury fashion as attention shifts to which companies will win and lose in the coming years.

As the industry returns to pre-pandemic “normal,” top brands have made renewed efforts to forge deeper relationships with customers, both in-store and online.

High-end e-commerce fashion platforms like loss-making Yoox Net-A-Porter are struggling as shoppers demand personalized shopping experiences again.

Matchesfashion, initially a small boutique business in Wimbledon, has suffered a similar fate. It was valued at around £800m when it was acquired by Apex Partners in 2017 and fell into administration this month.

Matches, which sells items from designers like Balenciaga and Prada, was the latest messy reckoning for companies that sell luxury goods online.

Teamwork: Kate Moss for Saint Lauren. High-end e-commerce fashion platforms like loss-making Yoox Net-A-Porter are struggling as shoppers demand personalized shopping experiences again

Teamwork: Kate Moss for Saint Lauren. High-end e-commerce fashion platforms like loss-making Yoox Net-A-Porter are struggling as shoppers demand personalized shopping experiences again

Many are in a financial free fall.

Mamta Valechha, analyst at Quilter Cheviot, said: ‘Perhaps one way to look at this is to ask: why would you settle for ordering a luxury handbag online from a multi-brand retailer when you can’t access the luxury brand’s website? could visit? or go to the flagship store and be treated to a glass of champagne while you make your purchase?’

At LVMH there are exclusive suites, with fine art on the walls, for the highest level of shoppers. Others finding it tough include Kering, the luxury group controlled by Francois-Henri Pinault, who is married to actress Salma Hayek.

Two weeks ago it revealed a 20 percent drop in sales at Gucci, which accounts for 70 percent of Kering’s profits.

Gucci has been slow to roll out the simpler styles of its new designer Sabato De Sarno; his predecessor Alessandro Michele was known for his flamboyant creations.

Swetha Ramachandran, manager of Artemis Consumer Brands fund, said: “During the post-Covid revenge spending, all luxury names were decommissioned. But the environment is returning to pre-pandemic normal, where there will be winners and losers.”

Ramachandran adds that Asian consumers in particular are sensitive to “newness” and the lack of availability of De Sarno’s “quiet luxury” collection in stores has likely frustrated them.

Other Kering houses include Yves Saint Laurent and McQueen, a line favored by the Princess of Wales. A year ago, consultancy Bain predicted that the global luxury goods market will be worth as much as €580 billion (£496 billion) by 2030, up from €353 billion (£302 billion) in 2022.

But a hierarchy of brands will develop. Shares in Hermes, maker of Birkin bags, are still up 31 percent from a year ago.

Shares in Brunello Cucinelli, famous for its cashmere sweaters, have also risen by more than 20 percent in the same period.

This reflects the movement away from sportswear.

Valechha says “category leaders” such as LVMH and Richemont “have momentum and the power to protect margins.”

But there are significant challenges for the British house Burberry: its handbags are considered insufficiently exclusive. Valechha said: ‘These companies will find it difficult to strike a balance between driving revenue growth in a moderating environment, while trying to protect margins at a time when they have no choice but to invest to build their brands to take it to a higher level and redevelop it. communicate with consumers.’

Challenges also come from unexpected sources. Inditex, the Zara group, rose to fame through fast fashion and is now entering the elite with leather jackets from £569. At Reiss you’ll find Atelier, where blouses cost €245.

And the holder of a 72 percent stake in Reiss is Next, the consummate high street and online retailer that may have loftier ambitions.

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