The High End of Retail Fashion and Luxury Delivery in the GCC

Until fairly recently, luxury brands had largely spurned online retail, considering it to be a platform for the sale and distribution of lower-end goods.

Retailers of fashion items had believed that high-end consumers would not be prepared to pay premium prices for goods they could not touch and try on before opening their wallets.

They had also feared that ecommerce would dilute their image and dent sales.

Then along came the Covid-19 pandemic.

With the global luxury goods market being ravaged by the Coronavirus, retailers had no choice but to let go of their traditional, somewhat snobbish, way of thinking. Many are now grasping luxury delivery as a lifeline—and consumers are luxuriating in the ability to shop for big brands without leaving their homes.

The Luxury of the Online

A Bain survey found that nearly 70 percent of consumers who normally visit stores to buy their luxury goods now indicate that they are at ease with online shopping.

The survey also found that during the lockdowns online sales doubled for some brands, and in some cases, they even grew six-fold.

That trend is continuing, the report says, raising expectations that fashion delivery will continue to flourish in the GCC. Growth is being further fueled by retailers and brands making big investments to improve the consumer’s online shopping experience.

GCC consumers are reflecting the global trend. A McKinsey report estimates that online sales of luxury goods worldwide will increase to $86 billion (USD) by 2025. It adds that online sales will by then account for around 20 percent of all luxury purchases made.

Try Before You Buy—Even Online

Thanks to sophisticated augmented reality software, some of the world’s leading fashion houses have found ways to allow online customers to “try on” luxury items before committing themselves to purchases.

• Known as ‘virtual try-on’, the methods vary but the objective is the same: the customer gets to see herself/himself in the outfit or fashion item of choice.

Most Virtual Try-On apps allow consumers to appraise various shades of lipstick, eyeshadow, and hair colorings, as well as glasses, sunglasses, footwear, leatherware, jewelry, and watches.

More complex augmented reality software allows high-end online shoppers to swathe themselves in the latest designs from brands such as Versace, Burberry, Ralph Lauren, Chanel, Prada, Hermes, Fendi, Armani, and Gucci.

The Modalines Method

Based in Milan, Modalines has developed an interactive platform that approximates to boutique selling. It works like this:

• A customer uploads a photo of herself or himself in a virtual fitting room

• The customer then clicks on various items of clothing that interest them

• These items are digitally ‘fitted’ onto the customer’s image

• The customer keeps clicking on various items, mixing and matching them until she or he is satisfied with the outfit.

For high-end fashion items, customers are given the ability to adopt a runway pose in their underwear and take a photo of themselves with their webcam. They can then digitally clothe themselves with famous brands in a way that projects them as a supermodel on a runway.

The Galerie Lafayette Method

Badly affected by the tight lockdown of France imposed by the authorities in the first half of 2020, this famous Paris-based high-end retailer launched an ecommerce service for international customers and for those too nervous to venture into the public arena.

This is how it works:

1. Software developed by Twilio, a US cloud communications platform, allows customers to connect digitally with one or more members of a 300-strong team of personal stylists, who then proceed to give them a virtual tour of the store.

2. The stylists thereafter communicate with the customer through various social media platforms to build a profile based on his or her whims and fancies.

3. Once the stylist has established a comfortable rapport with the customer—the kind that would develop if a consumer had physically entered a Galerie Lafayette store—the shopping process begins.

The top-end retailer says it aims to give remote consumers a “live shopping experience”, as a stylist accompanies them throughout their virtual tour of the store and its products.

It now posits itself as a bricks-and-mortar and clicks-and-mortar concern, attributing this innovation to changes in consumer behavior wrought by the pandemic.

The Challenge for the Luxury Goods Retailer

Now that online purchases are making up a chunk of luxury goods sales, retailers are faced with luxury fashion supply chain challenges they couldn’t have imagined back in the days when they were dealing only with in-store customers.

These include:

Packaging

Once a customer has placed an online order for a brand item from a high-end retailer, the chosen product needs to be wrapped in a way that conveys splendor and opulence. A personal touch could include a handwritten note from the store manager—or even the designer—to the customer.

2. Delivery

Like ecommerce customers generally, high-end online shoppers expect same-day delivery—or at the very least, next-day delivery.

And the caliber of delivery is expected to be more reliable and more transparent than standard forms of carriage.

After all, if you’ve just shelled out thousands of dollars for a Gucci original dress, you want to follow its journey every step of the way from the store or warehouse to your doorstep.

Customers expect the last-mile delivery company handling their item to be at the forefront of luxury goods logistics and offer real-time driver tracking, electronic proof of delivery, and proactive communication with customers through email, SMS, WhatsApp, and other instant messaging apps.

3. Actionable Insights Through Data Visibility

Unlike most retailers, purveyors of luxury goods typically have a wealth of information about their customers, such as their shopping preferences, purchasing history, and exclusive memberships.

The challenge for the high-end brand is to create similar customer profiles of their online shoppers and use the data to generate actionable insights that will drive online sales.

4. Returns

Returns are the bane of every retailer’s life, but especially for those involved in the luxury goods trade.

An expensive Prada gown is shipped to a customer who purchased it online but now finds it doesn’t fit—or she had only wanted it to impress guests at a glitzy function and fully intended to return it.

Some retailers have a very strict returns policy on luxury goods.

Online luxury fashion retail platform, Farfetch, for example, demands the following:

Returned items must be undamaged, should not have been worn, and should include original packaging and tags.

Footwear must be returned with the original branded boxes and dust bags

Security tags must be placed in their original positions.

Beauty and cosmetic products must be returned unopened and unused, with the seals intact.

Other retailers have a more liberal returns policy, making this part of their marketing strategy. The idea behind this is that if customers are allowed to return items without too much fuss, they will make further purchases in the future.

5. Ship from Store or Ship from Warehouse?

High-end luxury brands typically have complex supply chains, with some, like Gucci, boasting outlets in most major cities around the world.

Depending on the volume of orders and the nature of the product, some ship directly from the store and others from small warehouses or fulfillment centers.

Whether the luxury delivery service is from a store or warehouse, security is of paramount importance for retailers and shoppers alike.

The Challenge for the Luxury Goods Consumer

Ordering fashion items online is not as simple as, for example, ordering a new mattress.

For one thing, banks have introduced greater security checks when it comes to expensive online purchases in a bid to outwit sophisticated scammers and prevent money laundering.

These are some of the other disadvantages of online shopping:

No matter how sophisticated the software may be, it is impossible to guarantee that an item ordered online will fit the consumer perfectly.

Even though Galerie Lafayette leads the way in trying to reproduce an in-store experience, nothing can replace the magic of entering a boutique, testing the perfumes, touching the fabrics, feeling the fineness of the silks, and savoring the showroom atmosphere.

Photographs do not always tell the full story. Colors become distorted and flaws can be hidden. There is usually no online option to examine the item in fine detail.

Cybercriminals are a constant threat to online financial transactions, with fraudsters typically targeting big-ticket purchases.

Despite any minor drawbacks though, online shopping for high-end fashion is now a full-blown growth trend, and not just a stopgap during these times of social distancing and stay-at-home decrees.

In-store and Online—Omnichannel Luxury is Here to Stay

While the pandemic may have dampened the enthusiasm of some consumers to venture into crowded department stores, luxury ecommerce, seeing the gap, has risen to the occasion.

Backed by a broad network of carriers, delivery times getting ever-faster, constant technological advances enhancing the online shopping experience, and ecommerce becoming the modern trend, more and more shoppers are opting to experience grandeur from the comfort of their homes.

For luxury retailers, the reality is sobering and demands a decisive response. Those brands that offer ecommerce shopping options will thrive, while those that stubbornly stick exclusively to the brick-and-mortar experience, risk fading into the annals of pre-pandemic history.