Shortage of online luxury retail: Report

A news report by CNNMoney.com has highlighted the shortage of luxury e-commerce websites, especially ones that are owned by the luxury brands themselves. It notes that while several luxury brands do have a web presence, the majority of these websites merely offer shoppers directions to their nearest physical stores.

The CNN report quotes Milton Pedraza, the chief executive of the Luxury Institute, a market-research company, as saying that the luxury firms don't think online shopping is a luxury experience and hence shy away from offering the service. “But what they don't realise is that wealthy consumers don't want the in-store experience, they want convenience,” he said.

Earlier this month, De Beers began selling a limited selection of its jewellery on its website, but only to US shoppers. A company official has been quoted in the media as saying that the website will continue to be used primarily as a tool to drive more traffic to its stores.

The report adds that luxury retailers who ignore the e-commerce option may be missing out on an additional source of income. In 2007, online spending is estimated to be around $260 billion according to a survey by the National Retail Federation.

“The time-starved, convenience-minded wealthy consumers are buying everything on the web that they are allowed to buy,” Pedraza added. The only thing holding them back is the lack of luxury items for sale, he explained.