For this week's blog post, I read an article on how luxury brands are trying to enter e-commerce. This has been a trend for the past few years, but accelerated by the pandemic. Historically, luxury retailers have been hesitant to sell their goods online, mainly due to fear of counterfeit goods. Most have avoided partnerships with Amazon, as the site is known for carrying everything and may give the wrong impression of the luxury brands.
Today, Amazon and other companies such as Farfetch are competing to carry luxury brands online. To assuage the concerns of the luxury retailers, they have given control of the digital storefront to the manufacturers and enforced tighter controls to limit the sales of counterfeit items. Some brands have tried moving online without a partner, but few have been able to find success without partnering with an existing online powerhouse such as Amazon. To date, Alibaba and Amazon are the strongest players in the East and West, respectively, and the two are racing to become the dominant player in the segment.
As international travel has been restricted, many consumers are now shopping for luxury goods online rather than visiting brick and mortar luxury retailers abroad. While the restrictions on travel may be lifted next year with the release of vaccines, luxury retailers are showing a long term commitment to the digital channel as they have seen promising results in the past year.
This article drew my attention as I wondered what goods can't or typically aren't purchased online. Just a few years ago, it would be strange to purchase a car online, but Tesla and other companies have found success using the online model. I think it's interesting to see luxury retailers begin to embrace the digital sales channel as well after realizing that they can fight the issue of counterfeit goods and still control their brand image while partnering with major online retailers.
Source: https://www.nytimes.com/2020/11/29/business/amazon-farfetch-richemont-ecommerce-wars.html
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