Driven by the various online channels, the way consumers obtain information has changed considerably in recent years. The number of communications channels ranging from websites to social media, plus the increasing shift of purchasing away from bricks and mortar to online stores, is presenting the luxury goods segment in Germany with major challenges.
Of the consumers surveyed, almost 70% stated that websites and online stores are the most important channels for getting information about luxury brands. However, many companies still underestimate the potential of websites as an additional sales channel and believe online advertising is the main benefit for their brands. These are the key findings of the "High-end online retailing in Germany" study conducted by the industry association MEISTERKREIS and Roland Berger Strategy Consultants
The "hybrid luxury goods customer"
Obtaining information through online channels such as websites or social media is becoming increasingly important for consumers – in the luxury goods segment too. Company websites and online stores in particular are important sources of information for 69% of the consumers surveyed, followed by bricks-and-mortar shops (57%) and dealer websites (54%).
"Many luxury goods are already being purchased online, especially perfume as well as fashion and accessories – and there is an upward trend," says Clemens Pflanz, CEO of the industry association MEISTERKREIS'. "However, there are only a few customers who buy exclusively online – most decide according to their current mood whether to shop in a bricks-and-mortar environment or enjoy the convenience of online shopping," according to Pflanz.
E-commerce becoming increasingly important for luxury goods
On average, e-commerce's revenue share is currently below 5%, but this is expected to rise to over 8% over the next five years. Thus, online selling is a key growth driver for the industry, although its potential has not yet been fully exhausted.
"Even though the share of e-commerce for luxury goods is rising, online sales don't have top priority among the majority of companies surveyed," says Philip Beil, Partner at Roland Berger Strategy Consultants. "Instead, they view their web presence more as a medium for showcasing their brand products and thereby underestimate consumers' purchasing desires." A professionally set-up website is just as important today for attracting customers as is a flagship store. Since most customers shop both online and offline, companies should make buying their brand a real experience both at bricks-and-mortar stores as well as via the Internet," advises Clemens Pflanz.
