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The posh set may still lord their smart handbags, pricey silks, and Ibiza getaways over the masses in the offline world, but in digital it’s a different story.

Online, luxury retailers struggle to keep up with the Kmarts and J.Crews of the world. In fact, according to a recent study by L2, one in five luxury brands still lack ecommerce capability, and 30 percent of them have yet to incorporate basic site search. 

A Forrester survey found that approximatey 50 percent of luxury shoppers, who tend to be younger than the average online shopper, expect brands to have mobile sites and apps and (surprise, surprise) to be able to buy or access services from those sites.

“We should be good at this, right?” asked Caroline Rolfe, head of ecommerce at Labelux, owner of brands such as Jimmy Choo and Bally. “It’s ridiculous.”

Speaking at Econsultancy’s JUMP event last week, Rolfe chided the segment for its lollygagging and identified three key lessons luxury retailers must learn in 2013 to improve their performance against competitors.

1. Invest in brick-and-mortar

It sounds counterintuitive, but luxury retailers must invest in their physical locations. Here Rolfe called out Burberry, widely recognized in luxury commerce circles for its digital prowess. 

She pointed to the brand’s flagship Regent Street store in London, where, beyond the tasteful interior design and sumptuous goods, everything has a QR code and there are QR readers throughout the store that allow customers get information about each item.

Said Rolfe,

Luxury traditionally has been about experience. The experience in the shop of walking out with the bag with the logo and being proud of your purchase — it’s very different than if you go into Target or whichever retailer versus if you go to Louis Vuitton or Prada. You want to be proud of your experience.”

2. Have a solid infrastructure

Again focusing on the physical, Rolfe stressed the importance of options, such as delivery services, for the customer experience. “Multichannel is looking at everywhere that consumers are,” she said. “Consumers want to have things on their terms, so to have the infrastructure set up to deal with that is really, really key.”

At the same time, Rolfe warned against moving too quickly. “Don’t try to do it overnight,” she said. “Get the foundations in first.”

This advice is especially critical when considering luxury’s target audience, which expects a top-notch experience, said Rolfe. Indeed, luxury consumers are willing to pay more for customer service and experience, she continued, citing a L2 survey.

3. Offer global price transparency

“There are still retailers who don’t fluctuate their euro price to their dollar price when that changes,” said Rolfe, shaking her head. “And there are still retailers who think they can sell 20 percent cheaper in — I don’t know — Europe versus China, say.”

This kind of behavior is a no-no, said Rolfe, and the reason is simple: Customers can easily check. “They can just stand in your store and check on their mobile,” she said.

Change in the making

While luxury retailers have yet to up their digital game, there are examples that give Rolfe hope. 

Cartier, for instance. While the brand was slow to add ecommerce capability, it recently spent an impressive chunk of change on a US media-buy for a TV spot, leading many to criticize the brand for again falling behind the digital curve.

But which marketer wouldn’t love to have the money for a TV spot? Rolfe asked and then praised Cartier for placing the spot on YouTube. That move might sound elementary, but digital marketing for luxury is still in its infancy.

And there were strong results, noted Rolfe. The brand acquired 250,000 new fans and saw a 61 percent increase in engagement. Admittedly, the company likely had a small base beforehand, she said, but it was still impressive growth.

Cielo Lutino

Published 8 February, 2013 by Cielo Lutino

Cielo Lutino is a writer and producer for Econsultancy and other organizations. 

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