The central paradox of luxury handbags has always been that brands need to sell as many as humanly possible while still convincing every customer that he or she is getting something exclusive and sought-after. Until now, a cheap-and-easy way to do that was to eschew online sales in favor of forcing customers into brick-and-mortar boutiques, but according to Businessweek, the effectiveness of that strategy might have come to an end.
Over the past decade, aggressive expansion in Asia, and especially China, have helped fuel sometimes-staggering global growth for luxury brands. The numbers generated by the luxury-hungry middle and upper classes in the region satisfied investors and board members, thereby buying brands some time before they’d have to figure out how to tell their stories online. Increasingly, it seems like that time has come.
Businessweek reports that growth in China is slowing because of regulation and saturation, and with a dearth of new physical markets to explore, brands that had previously avoided fleshing out robust digital strategies will likely be forced to look at the Internet as their “new China.”
Not only are markets shifting, but so are buyers. Consumers in their 20s and 30s are used to having easy access to the products and services they want online and via their phones, and they’re more likely to view a required in-store experience as a nuisance than their older counterparts, who generally interpret it as a natural part of the luxury buying process. “Luxury,” as a concept, simply means something different to younger people.
Eventually, even the stodgiest of brands are going to have to meet their consumers where they are. Increasingly, that means on the Internet, despite the lowbrow connotations that can have for old school businessmen who don’t relate to it in the way that a 30-year-old woman with disposable income and an iPhone 6 might.
Brands might want to take a note on this (and many other things, honestly) from Hermès; the brand is still far and away the most exclusive leather goods brand in the world, with double digit profit increases every quarter and more demand than they can possibly supply. Somehow, the brand manages to do that while still selling a fairly vast array of products, including more than a couple styles of handbags, on its website. Luxury doesn’t have to be inconvenient to feel special.
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