How the Online Marketplace Model is Changing the Luxury Goods Sector
The luxury goods sector is dominated by brands who pride themselves on tradition, high quality, and exclusivity. Indeed, this is a large part of the appeal for consumers. But, like many other sectors, the use of technology in the retail of luxury products is changing the landscape, largely for the better.
Although some purists may be slightly suspicious of change, the online marketplace model of ecommerce is having an impact on how people purchase luxury brands. The concept of private sellers and reputable dealers occupying the same marketplace online is well-established by now, but its potential for luxury goods has only just begun to be realized. In this article, we explore some key aspects of this phenomenon.
Traditionally, luxury products have been highly exclusive and the preserve of the mega-rich. While no one is claiming a seismic shift in that respect – luxury items are still exclusive – the sector is nevertheless seeing a rise in accessibility. Online marketplaces pit multiple retailers in direct competition with each other on the same platform.
However, online luxury marketplaces are changing that perception. Luxury watch marketplace Chrono24, for example, has a vetting process for both private sellers and watch dealers to ensure genuine products. The issue with fake luxury watches is no secret, from knockoff Rolexes to cheap Tag Heuers, so this guarantee is reassuring for consumers and establishes trust. Furthermore, shoppers are presented with the location and ratings of watch dealers directly on category pages, as can be seen here. This way, you can clearly assess the reliability of the seller up-front, before even clicking on the item. As the luxury market moves increasingly into online spheres, we can expect more from these methods of authentication.
A new brand image
Accessibility is not just about affordability, however. In fact, as you’d expect, luxury goods are still prohibitively expensive for most, and those who can afford it won’t necessarily be concerned with slightly discounted prices. Traditional luxury brands are increasingly demystifying and modernizing their image by embracing online marketing techniques, such as social media marketing.
However, because the exclusivity of these brands is part of the appeal, they’re finding novel ways to straddle the accessible-exclusive divide. Online marketplaces are affecting the luxury sector in a similar way in that they are encouraging brands into a more modern direction.
Despite the more shift towards modern forms of marketing and sales, consumers and the luxury sector itself have been fairly suspicious of third-party online retailers. Marketplaces have always been considered hotbeds for fake items, and the worry was that third-party sellers are no different just because they’re online. Purchasing directly from a luxury brand’s website is one thing, but online marketplaces allow private individuals to sell on the platform, so where’s the protection from fakery?
However, online luxury marketplaces are changing that perception. Luxury watch marketplace Chrono24, for example, has a vetting process for both private sellers and watch dealers to ensure genuine products. The issue with fake Rolexes (and other famous brands) is no secret, so this guarantee is reassuring for consumers and maintains trust. In fact, Rolex was their most popular watch brand in 2016, with Omega and Breitling making up the top three. Trends are more than likely similar with comparable online marketplaces for other luxury products, so it’s in their interest to take authenticity seriously.
The bottom line
E-marketplaces have transformed the way we approach shopping online, particularly after the establishment of eBay. But for all the benefits they bring to consumers and the entrepreneurs who start these platforms, luxury brands have not universally embraced the development; concerns over their image persist.
However, it’s clear that attitudes about online shopping are shifting as technology develops, and the luxury goods are no exception. In order to remain relevant in the modern world, it will be necessary for the industry to adapt to this changing climate, in the same way they have been doing for decades.
Founder Dinis Guarda
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