I think it is fair to say that the arrival of online shopping has revolutionized our shopping experience, as the global high street has been brought to our door. With the use of a computer, an Internet connection and our flexible friend, we can enjoy a shopping experience that only a few years ago would have seemed like something out of Star Trek.
In this exciting new world that we inhabit, shops from around the world arrive virtually in our living room, and finding that ‘arcane piece of medieval chain mail’ can be as easy as purchasing a can of beans.
Younger shoppers were the initial driving force behind online purchases and the increasingly computer literate older generations are now swiftly following them. The whole transaction can be conducted in a safe and secure manner thanks to 128-bit encryption and the availability of a host of protective security software.
Some buying experiences will always be enhanced by the ability to touch and try before you buy. Finding that ideal dress or perfect pair of shoes clearly needs the tactile sensation and is often coupled with a social experience, such as meeting with good friends for a coffee and a chat.
The luxury gifts market is one area that clearly does work for online shopping because it features high quality brands that we can trust. It is important that we select an online retailer that conveys the same high quality feel that we see in the products being offered. Once we have found a suitable online retailer we can begin selecting those all important gifts that are frequently design classics and instantly recognizable.
Once selected and paid for these gifts can arrive at our door within a day or two, or can even be delivered directly to a loved one complete with wrapping and a special message. In these hectic modern times we can use the time and effort saved here on more enjoyable quality time with the family or even a little special time for ourselves.
This market has not been without its troubles though and there has been some simmering resentment towards online stores from the traditional high street retailers, as the market has experienced some growing pains with this new shopping medium.
The luxury gifts market has been decidedly slow in embracing this new purchasing medium and it was left to quick thinking entrepreneurs to initially fulfill the needs of the online community. Bright young companies began to spring up from nowhere, offering the 21st century consumer a selection of desirable design led products.
The problems began to occur when some of the online stores started to offer huge discounts that the high street stores simply couldn’t match because of their higher overheads. Many a canny consumer started to peruse the alluring designs on display in the high street stores and then discretely wander off to the Internet and buy at a much lower price online.
High street stores were frequently putting in all the hard work and the online shops were taking the sales. This situation had a devastating effect on the high street sales and many owners became understandably frustrated, annoyed and left out in the cold.
The problems continued to spiral further out of control when the online stores began a subtle price war with each other, in order to maintain their sales volume and see off the competition. At this point the profit margins became almost completely eradicated and much more seriously, the carefully cultured integrity of several quality brands began to be eroded.
As the price cutting bonanza continued, online stores began to force each other into extinction leaving carnage in their wake. Many product prices in the market were slashed beyond feasible margins and much loved brands took a battering from their lower perceived value.
Manufacturers and distributors in the luxury gift market have also been decidedly caught off guard. In the last 10 years as the bubble in the banking industry created greater perceived wealth, the increased affluence spilt over into in to the luxury gifts market significantly improving sales figures.
When there was an abundance of wealth sloshing around in society, the problems associated with discount selling to some degree remained hidden, because there were more than enough sales to keep everyone happy. However, as the economic downturn has begun to bite, the problems were revealed in dramatic fashion as everyone chased the fewer customers left in the market.
So, can online stores and high street stores selling luxury gifts coexist happily together?
I believe they can.
The online luxury gift market has grown up. Online shopping for luxury gifts is changing and becoming a much more professional affair, with quality service at the heart of the business. No longer will we as customers tolerate a part-time store, where the owner goes off to their day job and then responds to messages when they return home. A new more mature generation of online companies are arriving to replace the cost-cutting companies that have discounted themselves into oblivion. These are companies that understand the need to protect and support brand integrity of the cherished brands they support. They have strong values and a belief in the service they provide, beyond just a quick sale.
Opening an online luxury store is in many ways like opening a high street shop; it requires the same specialized knowledge of the product range and experience in providing quality customer service. However, instead of the customers spotting the store when moving along the high street, the online store may as well be in the middle of the desert. If online stores don’t spend time and money bringing people to the store then no one will know they are there and if they want customers to return, then the service must be as good as the designs being sold. The competition in this new arena has continued to grow and it is becoming more and more expensive to achieve the required exposure. Many of the high street stores have also begun to see the light and created their own web sites, realizing the potential opportunities in this sector.
The days of extravagant profit margins for online stores have come to an end. Online stores need to spend similar margins to the high street stores on advertising, good quality packaging, shipping and providing the type of high quality service that we would expect for such high quality designs.
Now that profit margin equilibrium has arrived, online stores and high street stores should be able to work in a wonderfully complementary manner, because they offer different experiences. The high street store allows the customer to touch, feel and try the designs on offer and then enables the chosen design to be taken home immediately. The online store usually offers a much greater range of stock for the customer to choose from and provides the convenience of making a purchase from your own home. The designs can then be sent to whoever and wherever needed.
There are signs that this harmonious relationship is beginning to occur in the marketplace, as new online stores can be seen supporting high street stores and the integrity of much loved brands with sound pricing and providing a quality service. It is heartening to see brands such as Alessi, Menu, Eva Solo, Design E, Louis Poulsen, Jacob Jensen and the like being treated with the respect that they deserve.
These are exciting times for the evolution of online shopping and I look forward to seeing what the future brings.
