Traditionally luxury items like custom furniture, designer clothing and expensive cars have all been products that consumers purchase from local outlets. However it looks like times are changing!
New sales forecasts revealed at the Financial Times Business of Luxury Summit indicate that eCommerce transactions could account for around 18% of all luxury sales by 2025.
Yes, despite many people preferring to purchase luxury goods in person so they can try them out, get a better view and take them home the next day, it looks like the power of eCommerce is taking over yet again.
Luxury eCommerce sales growing at a fast rate
Analysts, McKinsey & Company has been predicting growth in eCommerce luxury sales for more than half a decade. Back in 2009, they forecast that online would account for around 2% of luxury sales by 2015, equally a total of $4 billion in luxury sales over the year. However, recent findings have actually proved that to be a rather conservative estimate, with eCommerce now accounting for around 6% of luxury sales. It is thought that the sector will create around $14 billion by the end of the year.
The growth rate of online luxury sales has quadrupled that of offline sales and grown at a much faster rate than expected. Many people believe this is due to the fact that an increasing number of brands are now offering their luxury goods online, using high quality eCommerce platforms like Magento.
High number of luxury eCommerce sales in UK
The analysis by McKinsey & Company also showed that luxury eCommerce sales are higher in some countries than others. Although the average percentage of luxury online sales is 6%, it is much higher in the UK, where around 11% of luxury purchases are made online.
Other countries experiencing a high volume of luxury eCommerce sales include China and Brazil. Shoppers in South Korea, Japan, Italy and the US are still showing to be purchasing luxury goods online at an average rate.
Other important findings
In addition to this, McKinsey & Company found that whilst more people are confident in purchasing more affordable luxury items online (accounting for around 8%); only a few people (3%) felt comfortable purchasing extremely expensive goods online. This shows that there is still a lack of trust between consumers and online stores, with many only willing to part with large sums of money in person.
The study also found that more than 90% of buyers spend time looking at and shopping for luxury items online using their mobile phones. 70% of luxury buyers also use social networking sites at least once a week.
What does all this mean for eCommerce retailers?
The main thing to take away from this is that if you are a luxury eCommerce retailer, things are going to get better and better for you, as more people grow in confidence in making luxury purchases online.
What we will say is that you should work on improving your Magento store in order to increase customers’ confidence and trust in your business. Make sure it is fully secure, so they will be more willing to part with their money. It is also worth ensuring that your Magento website is mobile friendly, since so many people are now using their mobile devices to shop for luxury goods. Don’t forget a strong media presence can do wonders for your business too!
How we can help
Here at the Magento eCommerce Agency, we provide a wide range of services that luxury eCommerce brands can benefit from. Whether you’re looking to enhance your eCommerce site’s security, build a responsive theme or improve your social media strategy, we are here to provide the expert help you need. Get in touch for more info!