E-tailing fits in upscale niche

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Mother of pearl earrings for $2,300. A diamond-encrusted heart-shaped clock from Graff of London for $750,000. These and other costly items are being marketed online via luxury Web sites.

Sites such as Indulge.com, Mondera.com, BestSelections.com and eLuxury.com have joined the growing list of must-clicks for the rich and Web savvy.

"Online consumers expect to be able to buy anything online," says Mary Lou Kelley, VP-marketing with Ashford.com, a Houston-based luxury site, "and luxury goods are just a natural progression of that."

Proprietary research and customer feedback from Bizrate.com has shown that variety and service are important to its upscale buyers, says Ms. Kelley.

The site hypes its around-the-clock customer service, 15-minute response times to e-mail queries, free gift-packaging and 60-day return policy on new watches (30 days for everything else), Ms. Kelley says.

The free overnight shipping is a peace-of-mind boon to an upscale buyer who just spent $2,000 on a new watch, she says.

"If you're buying a $2,000 watch, there's anxiety there," she says. "Start to finish we need to exceed customers' expectations every time. We want them to feel comfortable about the purchase."

Like most other consumers, the rich are convenience- and value-focused, says Ekaterina Walsh, senior analyst with Forrester Research, a research consultancy. She adds that in a recent Forrester survey, 96% of online luxury shoppers said they pay attention to shipping costs.

"They are just as frugal as the general consumers," Ms. Walsh says. "The affluent are no different."

As they would with general consumers, luxury marketers just need to target the affluent with good value and service. If they do that, they tend to become loyal, consistent shoppers, she says.

Time-pressed and keen on convenience, upscale customers want timely customer service, customization and a Web visit suited to their needs, says Jill Vollmer, VP-marketing and business development with Mondera.com, whose ads from Leo Burnett USA, Chicago, target readers of The New Yorker, Fortune, Travel & Leisure and InStyle.

"Clearly, this audience is looking for something valuable," says Ms. Vollmer. "They want high quality product and an experience that exceeds expectations."

Its new $12 million campaign, which began in May, features documentary-style b&w photographs of people in real life situations, with lines such as "because she appreciates pre-school finger painting more than postmodern sculpture."

people in real life situations, with lines such as "because she appreciates pre-school finger painting more than postmodern sculpture."

Research told executives with eLuxury.com that beyond a display of items for sale, consumers want informative content, so the site provides articles and city guides, says Jim Conte, senior VP-marketing and business development . The site is a venture of LVMH Selective Distribution Group and Europ@web, a European Internet company.

The site aggregates more than 60 brands such as Christian Dior and Salvatore Ferragamo in 20 online "shops" centered around fashion, travel, home and gourmet, style and spa and beauty categories.

"Customers are expecting [their] online experience to be similar to offline. It gives a lot of assurance to people that they are dealing with the brand and authentic product," says Mr. Conte. "We try to mirror the brick-and-mortar experience."

That's a good strategy, according to the logic of Rebecca Nidositko, senior analyst of the online retail strategies group at Yankee Group. She says affluent shoppers want a greater level of customer service, toll-free numbers to ask questions of a service representative, and interaction between themselves and the organization.

The right convenience mix, she says, could increase online sales. However, for now, only 1% of all U.S. retail sales are done online, and expensive items like jewelry do not even fall in the Top 5 things sold, she says. Thus, at the moment, retailers are not serving up the right mix of "customer service or shopping experiences that would make anyone comfortable doing the majority of their upscale shopping online," she says.

CONVENIENCE CITED

BestSelections.com, however, promotes the convenience it offers consumers, says Roberto Devorik, president-international. The site displays a toll-free number on its home page, as well as a link to "live online help," that sends a message to a customer service representative who can help the consumer with any personal shopping questions.

BestSelections.com has linked with the 250 companies, such as fashion retailer Joan & David and jewelry seller Graff, he says.

"We've given the retailers on BestSelections more traffic" and incremental sales, he says.

"The bottom line for online is what the bottom line is for the entire retail sector, which is to listen to your customer and use the Internet to give them what they want," says Ms. Nidositko.

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