Simon Hamblin’s Post

The era of "easy money" is over for luxury e-commerce sites. Luxury fashion has always been challenging in the e-commerce space, but COVID encouraged luxury shoppers to buy luxury goods online, and platforms selling multiple luxury brands flourished. Since the end of the pandemic, luxury e-commerce sites like Farfetch have struggled to stay afloat. Luxury is difficult to sell online, particularly on sites that sell multiple brands. Is e-commerce just not suited for the luxury sector? Or is the multi-brand platform the issue? https://lnkd.in/gSknZe3C

While once seen as the future, luxury ecommerce now faces a reckoning. The allure of online shopping has dimmed post-Covid, with consumers craving in-person experiences. Moreover, the clash between low-margin online retail and high-margin luxury brands has strained the model's viability, leading to a sector-wide slowdown. As the industry grapples with these issues, the survival of digital retailers hinges on adaptability. Those catering to wealthy consumers with curated experiences, like Mytheresa, stand a better chance. The future of luxury ecommerce lies in finding a sustainable formula that satisfies both brands and consumers alike, says an interesting article in the Financial Times... #retail #retailnews #ecommerce #luxury https://lnkd.in/eEw6G5Uv

It’s clear that large multi-brand online #retailers focusing on #luxury are struggling. But where does that leave the future of luxury #ecommerce? While there are still a few luxury online retailers that are doing well enough to stay afloat, namely Mytheresa and Moda Operandi, Inc, the most likely scenario is that luxury brands will continue to build out their own e-commerce stores while partnering with software-as-a-service companies like Shopify and Commerce Layer to handle the operations behind-the-scenes. In this piece by Danny Parisi, we speak to Cian Wright, and Harley Finkelstein.

📈 Last week, luxury e-commerce platform Mytheresa posted strong third-quarter growth at a time when many luxury retailers, both online and brick-and-mortar, are struggling to maintain stability let alone grow. 💬 “As the global luxury market gropes with an economically stressed aspirational consumer, stalled growth in China, and an eroding profit profile for e-commerce luxury players, Mytheresa’s recent fiscal third quarter results were a standout as customer count, average order value, business with top customers and reduced acquisition costs all exhibited gains during the quarter,” Marie Driscoll, CFA Driscoll, an expert on luxury retail and the founder and chief analyst at Driscoll Advisors, told Inside Retail US Retail. 🔎 Find out more about the luxury retailer's growth strategy in the link below! #insideretail #retail #retailnews #mytheresa #ecommerce #luxury #fashion #accessories #apparel #finejewelry #shopping #consumer #growthstrategy #linkedin #webcontent #editorial

"US consumer spending across online luxury sellers like Farfetch, Matches and Net-a-Porter suffered sustained declines throughout 2023. The question is whether the downturn is simply temporary or the luxury e-commerce model itself is broken.", BOF states. Ecomm and Wholesale still matter to Luxury Brands, but as consumers are overwhelmed with options, how do you make each one of them desirable: Curation?, VIP engagement?, Exclusive drops?.

THE IMPLOSION IN LUXURY E-COMMERCE Financial Times by Adrienne Klasa Luxury ecommerce has always had its sceptics. “A lot of online sites are losing money. We created a relatively small site called 24S, which unfortunately is no exception to the rule,” Bernard Arnault, LVMH chief executive, told investors in February 2020. That wariness among some luxury brands left an opening for businesses such as Farfetch, Matchesfashion and Net-a-Porter. Farfetch and Yoox also started to offer services and software to build and run ecommerce businesses for luxury brands and for department stores such as Harrods. Eventually some leading figures in the industry decided to get involved. Richemont and the family office of Kering’s François-Henri Pinault invested directly in some of these platforms including Farfetch, while also striking deals to use their technology to get their own brands online. Richemont bought Net-a-Porter in 2010 before merging it with Yoox five years later.   Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.comT&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found here. However as the platforms grew, cracks began to appear in the model. The number of platforms multiplied, increasing competition and reducing their differentiation, and the businesses struggled to become reliably profitable. While the pandemic drove some companies such as Farfetch to their highest valuations ever as investor optimism about the future of digital shopping peaked, it also pushed luxury brands to invest more in their own ecommerce and distribution capabilities.   explore more: https://lnkd.in/gecP4d5f #fashion #investment #crisis #ai #web3

🌟 LUXURY E-COMMERCE / LOGISTICS and CONSUMER'S CHOICES 🛍 Challenges Ahead: Luxury E-Commerce Faces Tough Times Ahead US consumer spending at online luxury sellers such as Farfetch, Matches, and Net-a-Porter experienced sustained declines in 2023. The question now looms: Is this downturn a temporary setback, or does it signal deeper issues with the luxury e-commerce model? - Luxury e-commerce has seen remarkable growth, outpacing the overall luxury market according to data from Coresight Research. However, challenges persist for online luxury sellers like Farfetch, Matches, and Yoox Net-a-Porter, with sales declines and acquisitions shaking the industry. - Despite hurdles, players like Mytheresa have shown resilience, recording a 12% sales increase in the quarter ended September 30. Yet, operating costs remain high and competition from brands' direct-to-consumer sales looms large, threatening the relevance of multi-brand retailers. Without adaptation, luxury e-commerce companies risk becoming obsolete. - Analysts at Bernstein caution that without compelling personalization or differentiated customer propositions, luxury aggregators could face a fate similar to department stores. Let's stay tuned to see how the industry navigates these challenges! #LuxuryEcommerce #OnlineRetail #IndustryInsights #ecommerce #logisticssolutions #returnsmanagement #overproduction #overconsumption #sustainability #AdaptationIsRequired 🛍️📈 Source: https://lnkd.in/dRTwb52Q

💡 Surviving in Luxury E-commerce: Key Strategies for Success The luxury e-commerce landscape is evolving, and the brands that thrive are those that adapt and innovate. Key strategies for success include: - Target Millennials and Gen Z: Focus on younger consumers who are driving the market. By 2025, millennials are expected to make up 40% of the global luxury market. Tailor your offerings to their preferences and leverage social media to engage them effectively. - Compelling Storytelling: Brands with rich histories can captivate audiences by sharing their unique stories. Chanel’s “Inside Chanel” series and Burberry’s acoustic sessions are prime examples of how storytelling enhances brand connection and loyalty. - Seamless Shopping Experience: Fast, free shipping, and multiple delivery options are crucial. Luxury consumers expect convenience, and brands like Louis Vuitton are setting the standard with complimentary delivery and in-store pickup options. - Personalized Customer Experience: Personalization is key in luxury retail. Utilize AI and machine learning to offer tailored recommendations and VIP services, ensuring that customers feel valued and special. - Digital-First Approach: Embrace digital strategies while integrating physical retail touchpoints. Brands like Mr. Porter offer premium omnichannel experiences that cater to their top customers, combining the best of online and offline shopping. Stay ahead by implementing these strategies to meet the high expectations of luxury consumers and maintain a competitive edge in the market. #LuxuryEcommerce #DigitalTransformation #CustomerExperience #RetailInnovation

For Luxury E-Commerce, It’s Even Worse Than It Looks? Consumer’s behavior and shopping habits/ternds must be followed closer than ever, regardless of geographies. In the 2000, most #luxurybrands still viewed #onlineshopping with some distrust. But even if brands weren’t ready to open #ecommercebusiness themselves, enough were willing to give a shot to make Net-a-Porter (as the first big shopping destination for luxury online). Proved right, of course: Consumers were willing to buy luxury online. Eventually the brands came around, and they became their etailers’ biggest competition, as today is a fact. The question is whether the model itself is broken — in part because brands that once shied from selling online have now fully embraced it, or because the lack of reinvention of multi-brand #premium & #luxury etailers? But not all online luxury suffered equally. Total luxury e-commerce actually grew, and grew slightly faster than the overall luxury market, which had a slowdown in 2023. Shoppers keep buying fashion online, including high-end items. Constant reinvention is the business key factor of sucess, isn’t different for Premium-Luxury etailers. #smartbusiness #fashiontechnology #ecommercetrends #ecommercestrategy #reinvention. Article courtesy of: The Business of Fashion

A super interesting read from The Business of Fashion on the state of luxury e-commerce currently. We’ve seen recently that it has been a tough time for the big luxury e-tailers (FARFETCH, YOOX NET-A-PORTER, MATCHES) with lots of movement and volatility happening, however it will be very interesting to see if and how Coupang and Frasers Group can turn things around at Farfetch and MATCHES respectively. It’s not all doom and gloom though - luxury ecommerce sales are still growing YoY, just at a slower rate. And whilst this is predominantly driven by own brand’s sales, rather than with e-tailers, it does show that the appetite to shop luxury online is still there. E-tailers just need to find ways to differentiate their shopping experience to be enticing to their customers. #luxuryfashion #ecommerce #retail https://lnkd.in/eSuGhDi9