- `It's crunch time' for luxury brands on the Web, Luxhub says
- Companies are missing sales because of deficiencies online
Last month’s yuan devaluation dealt a blow to luxury-goods makers, and those that fail to become more Web-savvy risk further damage to their business, according to a report published Thursday.
From e-mails to e-commerce, expensive brands generally fall short of customer expectations online, said Isabelle Harvie-Watt, head of Luxhub, the fashion unit of advertising company Havas SA that produced the report on how the wealthy shop. With the Web playing a part in more than 40 percent of purchases, deficiencies there equate to missed sales, she said.
Before China devalued the yuan on Aug. 11, that didn’t really matter. Double-digit growth in the country swelled revenue at companies from LVMH Moet Hennessy Louis Vuitton SE to Gucci-owner Kering SA. As luxury sales fall in China and the currency adjustment sparks concern that the world’s second-largest economy may be in worse shape than previously thought, “it’s crunch time” for luxury brands online, said Harvie-Watt.
“They’re going to be forced to look inwards at how they’re running their companies,” she said by phone.
Areas where brands can improve range from installing Wi-Fi connectivity in stores to offering customers a more personalized experience, she said. The investment should pay for itself as luxury shoppers are prepared to spend more if they are made to feel special, according to the study.
Luxhub conducted the online survey of 6,400 affluent consumers aged between 25 and 65 in the U.S., China, Britain, Spain, France, Italy, Germany and the Middle East.