Online Luxury Retail Remains Elusive

Sure, the bricks have it poor, but the clicks are struggling, too. Traffic tracking firm Comscore, based in Reston, Va., says that U.S. online retail spending totaled $29.6 billion in the third quarter of 2009, a 2 percent decrease year-over-year. It marks the first moment on record that e-commerce has seen negative growth in two consecutive quarters.

But some experts believe the holidays will prove e-commerce’s strength, particularly when it comes to customer service. According to a recent report by Cambridge [Mass.)-based Forrester Research, 2009 U.S. online holiday sales will increase by 8 percent, to $44.7 billion. Offline sales are still dominant, amounting to $392.9 billion, according to the National Retail Federation. But with most analysts declaring that number will either remain flat or decrease by a percentage point or two, Forrester’s prediction suggests many consumers are still shifting to online shopping.

That may be true for big box and specialty retailers, but there is one category

where online presence is minimized: luxury apparel. While numerous studies have argued that affluent consumers spend more money online than any other market, many luxury retailers are still leery of accommodating their customers on the World Wide Web. The fear in the corner offices of fashion houses in Milan, Geneva, and Paris remains that the World Wide Web will dilute the exclusivity of luxury qualitys. Many mass market retailers such as Amazon.com, Target.com and Walmart.com, as well as aspirational sites such as Crateandbarrel.com, Bananarepublic.com, Redenvelope.com, and even upmarket area store chain Nordstrom.com, have found online success. But these makes still fall short of what many consumers consider true luxury.

Leading the Way

Still, there are changes afoot in the luxury sphere. Companies that once professed nothing but contempt for the Net now at least have Web sites. Others, such as Ralph Lauren and Tiffany & Co., have fully embraced e-commerce. Many…

Original post by dhiram

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