The way people shop has changed. Technology has made it in such a way that you can shop windows through your phone and make a purchase comfortably from your home.

According to statistics, global retail e-commerce sales will rise to $ 4.13 billion in 2020 and by 2040, around 95% of purchases will be on e-commerce. This may be true for cheaper retail items, but luxury items seem to be a bit further behind. 

You can say that people will still love to come to stores to purchase high-end products. But what amount of truth lies under this assumption? Let’s find out. 

eCommerce Platforms at our Fingertips

This claim about online commerce has been based on the assumption that wealthy consumers would not be willing to pay premium fees for high-end products over the Internet and that such high-value transactions are best conducted in person. Some luxury brands felt that selling expensive items on multi-brand retail websites would be contrary to the brand image of premium products in the minds of their customers, so they believe that in this retail climate, it is best for fashion firms to stay on the mark.

Some were concerned that luxury brand buyers might not be able to get personalized service that is impossible to replicate digitally. However, these days, the rules have changed, and those old assumptions have been challenged time and time again. In addition to the fact that the average lifestyle is very busy, with little space to shop, technology has become indispensable, and buying things online is a new lifestyle.

Luxury Brands are Leaning Towards eCommerce

E-commerce did not exclude luxury goods but offered an opportunity for high-end brands to serve their wealthy and busy customers. E-commerce sites for fashion designer brands, Net-A-Porter, Farfetch, and many others have shown that there is a market for luxury goods online and that wealthy customers don’t mind paying premium rates without personalized attention. This shows that digital is a medium through which luxury brands can expand to occupy a share of the market.

Digital Transformation in a Luxury Retail Market

According to McKinsey, by 2025, online luxury sales to the global high-end market will triple to reach $ 91 billion. That is, 20% of luxury sales will be made through the Internet. However, this would have been impossible had it not been for technological advances, one of which is mobile inclusion.

Mobile Phones have been a Game Changer

Marketers know that the penetration of mobile phones has made it easier for more people to access the Internet. The Internet is and will continue to be one of the main means through which people are introduced to the existence of a luxury item for the first time.

Janel Tanna, an award-winning independent film actress, producer, and fashion model who is also a medical doctor, has a similar line of thought. As an artist and caregiver working on the front line during the COVID pandemic as a resident psychiatrist, she says that “the value of human interaction cannot be underestimated.”

However, she believes that “technology across the board, as well as fashion and art, has allowed more opportunities around the traditional gatekeepers of the industry to allow unique individuals and companies to create their own niche and reach markets. That they probably would not have reached before.

Luxury Brands are Going Online

Most, if not all, luxury brands sport their own websites today. Your website is a platform from which your high-profile target audience can learn more about them. Luxury brands that take advantage of this could make it easier for their buyers to purchase one of their high-end collections if they have online shopping capabilities.

Louis Vuitton, a luxury fashion brand, realized the growing importance of e-commerce early on, so they embarked on a wave of e-commerce launches. They now have e-commerce platforms for their various outlets around the world, including the US, Sweden, Singapore, and New Zealand.

Luxury makeup brand Sephora took the excellent customer experience to another level by introducing Augmented Reality. Now, customers can go to your website and see your products in greater detail through as if they were in the physical store. Their website provides 3D images of the products, so you don’t have to leave your home.

As online markets are making big waves in the retail market, Janel recommends that all luxury brand owners start looking at their website as a possible extension of their online brand. Also, they start integrating Fintech systems to facilitate transactions. According to her, “financial technology could allow for more fluid transactions and interaction than previously seen.”

Technology that Makes Payment Much Easier

Financial technology, commonly known as Fintech, is the practice of applying technology to financial services. Fintech has contributed enormously to the growth of the Internet.  The creation of comprehensive and secure systems that help facilitate and improve online payment helps them through this growth.

Fintech for the Win

Since the Internet opens the market to customers from all over the world, there may be customers who do not have credit or debit cards or even a bank account to make payments over the Internet. This is where Fintech companies come in. They create technological innovations that provide alternative payment methods for such customers.

L3COS

One of those innovations is L3COS. L3COS is the world’s first regulated blockchain platform that offers individual authorities the opportunity to regulate digital economies in a verifiable and legal way. By doing so, it makes fraud, money laundering, or any other black market financing impossible. The platform will provide a central bank digital currency that could be used by households and businesses to make payments.

Its unique triple-layer consensus technology is transformative for the global economy, empowering governments and corporations. This has happened for the first time to regulate digital economies while providing security and legitimacy to transactions. L3COS is a perfect platform to build a Much-needed global supply chain and marketplace. It helps eliminate counterfeiting and the black market for much-needed goods.

Mobile Payment Apps

These of Fintech have given rise to payment platforms like Stripe that can be integrated with any online platform. The same goes for Fintech payment platforms like PayPal, Apple Pay, and Google Wallet.

Some Fintech companies have banking functionalities that can function as standalone solutions for their platform. And the major luxury brands are already embracing these digital characteristics.

Curbie, a Canadian auto platform, is a good example. By embracing FinTech, Curbie has created a direct-to-consumer market in the second-hand car sales business. This way, it cuts out the middlemen to help its buyers save on costs.

“Curbie uses state-of-the-art technology to more accurately price our used vehicle fleet. By automating and simplifying car buying online, we reduce the overhead costs typical dealers have, such as pushy salespeople, sales commissions, expensive showrooms, and expensive land leases. Curbie is able to offer a great value while offering our customers an easy, convenient, and stress-free online car buying experience, ”says Brent Gudelot, Curbie’s Chief Operating Officer and Co-Founder.

Payment Through Cryptocurrencies

By improving online transaction platforms, Fintech has helped open doors to customers who have peculiar preferences for certain types of denominations. Through Fintech, digital stores can allow customers to transact using cryptocurrencies as a medium of exchange for purchased items. Doing this could help win the hearts of wealthy customers who have a penchant for new-age digital currencies.

On the client side, blockchain-based Fintech company Crypterium is empowering digital currency holders with an all-in-one wallet and card that allows them to make purchases online and in physical stores. The goal is to make similar payment models available to their blockchain-based counterparts.

Speaking about this, Caroline Matusso, CMO of Crypterium, said: “As of 2020, there are more than 1.7 billion adults around the world without access to financial services. In most cases, they need to walk miles to get to the nearest bank branch or exchange office. However, two-thirds of them own mobile phones.

Conclusion

An online platform will in no way reduce the perceived value of a luxury item; it will only make it more accessible to the customer. As long as the products are in stock, the luxury brand store will always have the lights on.

And since the prevailing disruptions caused by the coronavirus pandemic have “forced” consumers to buy products online from the safety of their homes, the pandemic could be the only thing that will give luxury brands a much-needed boost to embrace it. Digitization.