Chanel to Launch E-Commerce Boutique
– What Does This Mean for Luxury Fashion?

 

May 17, 2016

Chanel Ad

In the last ten years, new technology and globalization has put pressure on the luxury fashion industry to change its tried-and-true guiding processes and is forcing brands to rethink their defining strategies. Live-broadcasting apps like Snapchat and Periscope have put an end to the exclusivity of fashion week shows, and the rise of ecommerce has forced fashion houses to consider taking their clothing from high-end, brick and mortar boutiques to the open, global marketplace of online sales. While most brands have long-ago accepted the need for online storefronts, Chanel, one of the most iconic names in luxury, has held its ground and remained firm on resisting ecommerce. That is, until now when, on March 31st, Chanel announced that they would be opening up an online shopping platform by the end of 2016.

The news came as a surprise to many in the industry as the brand has always insisted that its customers purchase its luxury products because they want to feel unique, a factor that is taken away with an ecommerce site open to the public. Up until this point, Chanel has been strategic in not allowing any of its products other than the brand’s licensed fragrances, cosmetics, and sunglasses to be sold online. Not even retailers carrying items donned with the iconic logo were allowed to sell the items in their ecommerce stores. This begs the question: why has Chanel now decided to open up to ecommerce and what does this mean for the luxury fashion world?

E-Commerce

In the past, Chanel justified its decision to remain offline by maintaining that the in-store customer experience is far too important to the brand. But for new generations of consumers, ecommerce is more than just the norm, it’s quite often preferred. With millennials representing a fourth of the country’s entire population and representing $200 billion annually in buying power, they hold a lot of influence over retailers. Bruno Pavlovsky, the fashion house’s President of Fashion, told WWD that “It’s not so much a shift. It’s an evolution to better serve out customers.” Further explaining the company’s decision, Pavlovsky expanded that “Some of the customers are able to come into the boutique. Sometimes they don’t want to because they want to go faster and they know exactly what they want, so it should be able to better respond to the customers’ requests.” But the Chanel President of Fashion stands firm that the online boutique will be different than most web retailers, stating that “it’s more e-service than a pure e-commerce approach.”


Chanel’s move is bound to impact the rest of the luxury fashion world. While the price point will remain the same, strengthening the label’s air of exclusivity, the items will arguably be far more accessible than ever before. For a brand that’s maintained its status without catering to the masses, this move raises concerns that ecommerce will ultimately dilute the Chanel label. But the shift also predicts a huge growth in revenue as reports have shown that online sales in the world of luxury fashion are growing twice as fast as the market itself. In an age when half of luxury shoppers own a tablet and three out of four use a smartphone, opening up that platform seems like a necessary business move.

Chanel

The emergence of the Chanel ecommerce store will not likely have a huge impact on the number of boutique shoppers, but it absolutely will open the door for an entirely new set of digitally-savvy customers. If the brand can strike that ideal balance between maintaining its __ and successfully gaining sales through its online platform, it’s likely that other luxury brands that have eschewed ecommerce are likely to follow. The needs of consumers are constantly changing and, it’s becoming abundantly clear that, all retail industries, even those previously immune, are being forced to adapt to stay relevant.

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