Why Luxury Brands Have a Difficult Time Online

With 94 percent of the ultra affluent in the United States regularly buying products online, according to a 2008 Unity Marketing study, why do so few premium brands sell their goods online? It would appear to be a fruitful space for the luxury goods and services market to penetrate. So, why the reluctance?

Last month, I wrote about how it would behoove the luxury market to become more adept with online strategies and make websites the focal point of business. But I also failed to discuss why the luxury industry has been slow to embrace the Web and how consumers' intentions, expectations, and behavior are completely different at a brick-and-mortar store than when they are perusing a site online.

A friend who graduated from the HEC School of Management's MBA program in Paris shared these thoughts with me: "Luxury brands have been having a hard time on the Internet because 'luxury' is an experience. It's something that you need to feel, taste, and touch with your own eyes and hands. It's difficult to sell luxury goods online, i.e., a Louis Vuitton bag, because with that one-touch point, you're missing out on the other variables involved in the 'luxury' experience. A luxury product is there for you to dream. It's difficult to convey this 'feeling' online. This is precisely why the retail outlets—and creating the luxury experience there with the attentive service, luxurious interior design, and first-class service—are so essential to a luxury brand. Superior customer service is the key to all true luxury brands. Luxury brands are there to make the consumer feel important and that with their purchase of a product/service that they have joined an 'elite' or 'exclusive' community."

Do you agree with this viewpoint? Do you think that making websites the centerpiece of a luxury retailer's business will dilute the value of its brand?