Online pureplays to hold a 30% share of online global luxury spend by 2020
A new report is predicting that the global online luxury market will more than double in the next five years as major brands continue to increase their range availability online.
While brands that were previously reluctant to make websites transactional are expected to succumb, the pureplay market is forecast to outpace total online by 65 percentage points between 2015 and 2020 as online retailers invest in customer engagement and in differentiating their offer.
Verdict’s latest study on the global luxury goods market predicts that online’s share of the total market will remain below 11% in the period despite the luxury market being forecast to rise by 113.7% to just under €50 billion.
The report shows that much of luxury spend is conducted while consumers are overseas, particularly in Europe or tax free markets such as Hong Kong, making physical stores the preferred and more convenient channel.
Never Miss a Retail Update!However, Verdict predicts that online pureplays such as MyTheresa, Yoox and FarFetch will drive future online growth as they continue to grow their branded offers, differentiate via selling unique brands and launch country-specific transactional websites.
The study forecasts that the online luxury pureplay market will grow by 178% between 2015 and 2020, reaching almost €15 billion and a 30% share of total online spend.
The research firm’s retail analyst Jessica Fioriti said: “More consumers will be tempted to purchase high value items from online pureplays due to the variety of brands and convenience of shopping across different labels and markets.
“However, it isn’t all about choice: in order to compete with luxury brands and chip away at Net-a-Porter’s 13.6% share of the pureplay market, the likes of Yoox and Avenue 32 must continue to invest in service, the shopping experience and customer engagement.”
Honor Westnedge, analyst at Verdict, added: “Investment in enhancing loyalty among shoppers is particularly important now, as luxury brands are starting to invest significantly in the channel themselves, having recognised the sales growth potential provided, and have the benefit of integrating online and offline platforms.”
