E-commerce and how it's affecting Luxury brands and management?

With Covid-19, the world saw a transition that no one had ever imagined. Travel was banned in any form and everyone was stationed at home and left with only one way of communication which was the Internet.

Whether it was work, personal recreation or communicating with ones near and dear ones, it was all virtual.

This led to the massive emergence of E-Commerce where businesses realised that no matter which industry one belonged to, they had an innate ability to function online without any personal or physical interactions of any kind.

E-commerce opened up the Luxury world in a way that no one thought existed. Luxury has a very close connection with people as the business is extremely dependent on interpersonal relationships between different stakeholders. It believes that the more one communicates, the more it helps in growing the business by heaps and bounds.

E-commerce enabled this industry to expand during Covid-19 when the world came to a standstill. They allowed various brands to launch themselves in markets which were earlier unexplored and territories unconquered.

They enabled them to create demand through various online platforms. Though people could not travel, they were able to enter new markets and tap untouched resources. Fashion shows were organised virtually, new collections were launched online, meetings were held to close business associations by sitting in the comfort of one’s house and businesses grew in numbers that were only unimaginable.

E-commerce also allowed businesses to recognise that they could allocate their resources more carefully to enable maximum utilisation. They could launch new products into markets customising their needs and demands.

E-commerce also allowed luxury brands to cut costs and these funds could be utilised in handling online operations as they were generating more revenues.

It became easy to showcase wider collections that were earlier not possible due to space constraints in an offline showroom where brands had to choose their products as per the individual market demands.

Now, customers are able to shop at one click from their comfort zones which allows them the time and mind space to compare and select the best possible option available. They are also able to get a better value for their money as more products are available in different price brackets.
The after-sales services have gained a lot of importance and brands have ensured the timely settlement of issues and grievances to ensure complete customer satisfaction.

Luxury brands started investing heavily in technology as they wanted to make the customer buying process more seamless so that they do not miss the experience of actually going out to the showrooms and meeting the actual sales force.

They also ensured that their employees are well-trained and equipped to handle all stakeholders in a timely and efficient way so that they do not feel the need to travel or hold personal or one-on-one meetings.

E-commerce changed the face of the luxury sector and people realised that in any adverse situation this industry will find a way to prosper and navigate its way through a crisis in the most efficient and dignified manner.

Luxury is one industry where people actually pay for the brand and the value it brings. Both are intangible but have the highest possible rate of return as clients view them highly.

E-commerce has completely transformed the dynamics of the luxury sector forever through which this industry realised that it can grow exponentially working via a hybrid model forever. It managed to change the face of businesses in the best possible way which will not only allow them to expand but will also ensure that they are able to adapt to almost any market conditions or changes.

E-commerce and Luxury have developed a hand and glove relationship where one is incomplete without the other and together they are equipped to take on the world.

About the author

The article has been written by Smita Jain, Director – MGLUXM, SP Jain School of Global Management.

 

 

 

 

 

 

Note: The views expressed in this article are solely author’s own and do not reflect/represent those of Shiksha