Why some luxury brands still don't sell online
Believe it or not, in 2014, there are still fashion brands that don't sell their ready-to-wear - or, in some cases, accessories - anywhere online. Aside from cosmetics and fragrances, labels like Chanel, Céline, Hermes and Dior require that you physically go to a store to purchase most if not all of their clothes and handbags, just like you did 30 years ago. But why? When there's data proving that shoppers are increasingly choosing to spend their money online over brick-and-mortar stores, why eschew that potential opportunity?
Chanel has given canned answers to this question a couple of times. "Fashion is about clothing, and clothing you need to see, to feel, to understand," Bruno Pavlovsky, Chanel's president of global fashion, told Bloomberg last January, adding that the company's digital initiatives are designed "more to bring the customers to the boutique."
Just last week, Céline CEO Marco Gobbetti told WWD that the company prefers to engage with customers directly "in the way they like to be engaged" - that is, in the store.
And while, sure, exclusivity is a hallmark of each of these brands, there are likely other, more financially strategic reasons for their focus on brick-and-mortar retail. They're not forgoing sales just to play hard to get.
In the case of, say, Dior, "you have to look at their business model," says Katalina Sharkey de Solis, managing director at ad agency Moving Image and Content, who was, at one point in her career, a digital director at Chanel. "It's a diffusion business model, so the percentage of revenue that ready-to-wear actually represents is very, very small." Ready-to-wear, she says, is essentially a tool to market a label's other (often lucratively licensed) goods - i.e. handbags, sunglasses, makeup, skincare, fragrance, etc., much of which you can buy online from these brands.
Of course, that's not to say these brands aren't selling any clothes period - strategically, they just might be better off selling those clothes in an exclusive retail environment that draws their best shoppers into stores. Were the labels to put those clothes for sale online, brands could be "cannibalizing in-store traffic," says Sharkey de Solis.
Of course, there is the argument that brands, in a desire to keep their goods "exclusive," could be missing revenue opportunities online, says Sucharita Mulpuru-Kodali, vice president and principal analyst at Forrester. "Yes, maybe they could increase sales [by doing e-commerce]." But, she continued, "a brand's goals aren't always to increase sales. It may be to preserve the quality of the brand so that it stays in business for another 100 years."
There's a compelling argument, then, for certain luxury fashion brands to keep their clothes offline - why, then, do Louis Vuitton, Givenchy, Burberry and Saint Laurent, to name a few, sell their ready-to wear online? That's because it makes sense for their respective business models. Of course, Givenchy isn't selling its couture dresses online, but it does sell oodles of t-shirts and sweatshirts. Saint Laurent tapped Hedi Slimane specifically to ramp up the label's ready-to-wear business, and it's worked. In addition tohot-selling shoes and handbags, Barneys and Net-a-Porter can't keep many of the brand's dresses and sweaters in stock online (though it's possible that the inventory was purposely kept small). That the brand puts celebrities in suits that are similar if not identical to those available to buy at any given time is another sign it is pushing ready-to-wear.
A brand's decision to sell product online may also have to do with who owns it. "If you're a public company, you have to err on the side of making yourself more available," Sharkey de Solis, citing Burberry as an example. "They have their diffusion lines with different prices that are critical to that strategy."
Even department stores like Bergdorf's, Saks and Barneys can offer more exclusivity than an online environment because sales associates there can control who gets their hands on the best product. "It's not a democratic process," says Sharkey de Solis. "The best merchandise often goes to pre-existing clients, people who have longstanding relationships with those department stores. [Brands are] counting on those sales associates to vet who should have the product and who shouldn't."
Those personal relationships shared between the wealthy and their sales associates also mean that certain shoppers may not even have to drag their
lazy busy asses to actual stores to get what they want. "If somebody really wants that item, there are plenty of ways [to get it]," says Mulpuru-Kodali. "A salesperson would probably be happy to send it." Indeed, I've heard of high-end New York department store sales associates texting their customers who live in different cities when new items arrive.
If one of these brands ever did decide to do e-commerce, it would most likely be in a very specific, controlled way. Sharkey de Solis could see a brand doing a short-term "e-commerce stunt," more for publicity and brand perception than to drive sales. She says a brand like Dior could also potentially work with a site like Net-a-Porter to make its clothes available only to its top-spending clients. (Net-a-Porter has a VIP program for its best customers, who are able to buy products before they go on sale publicly.) Mulpuru-Kodali agrees that these brands would need a "gated entryway" to sell online.
But will they even need to? Chanel, Hermes and Céline have all done exceptionally well over the past few years - better than many other luxury brands - despite their reluctance to sell online. Céline's success is particularly impressive given that it does not offer products in many categories, letting its always-coveted "It" bags pay the bills. "There's no real reason until that market changes, for those brands to put ready-to-wear items online," says Sharkey de Solis.
So if you want to get your hands on some Céline furry sandals or a Chanel boucle jacket in the foreseeable future, you're going to have to go to one of their stores. We recommended against wearing sweatpants if you do.
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Photo Credit: Chanel