- Don-Alvin Adegeest |
As sales of clothing continues its shift from brick-and-mortar to online, e-sales of luxury goods are set to triple by 2025, according to a new report by global consulting firm McKinsey & Co.
Currently online sales account for 14 billion euros, which is just 6 percent of the luxury market, and is expected to grow to 70 billion euros.
Niche brands are expected to thrive, as smaller fashion businesses will find success with Baby Boomers becoming the fastest growing spending group, the report notes.
To grow brands must embrace online sales
“Digital is a must for luxury growth,” said Nathalie Remy, partner at McKinsey & Co told WWD. This growth will be primarily fueled by luxury brands’ own websites, accounting for 28 percent of sales, along with department stores, which are expected to provide an additional 18 percent of revenues.
“We know that luxury consumers are the most digital-savvy and most social-media active out there. Eighty percent visit a social media platform at least once a month, 25 percent are doing it daily; two-in-three luxury shoppers are posting content at least once a month, 15 percent are doing so daily. “And this is not just a Millennials’ story,” she adds. “We know that 71 percent of Baby Boomers are using social media platforms, they are the fastest growing group,” Remy revealed.
Most research concerning online success points to visibility across a series of platforms and brands to offer coherent passages between offline and online shopping.
Generally, the city store remains the number-one touchpoint with the consumer, accounting for roughly 80 percent of exposure, followed by fashion magazines with 66 percent and word of mouth at 50 percent, although location will have an impact on these figures.
According to McKinsey, the “must-win battles” for all can be reduced to five key points: the city store, word of mouth, online search, the interaction with the salesperson and the brand’s own website, viewing that three-quarters of offline sales are influenced by the internet.