The digital transformation of luxury fashion shopping in India

India is home to 1,387,297,452 people. There exist 564.5 million people with internet access. In 2017, e-commerce had a penetration rate of 28 percent, out of which 6% sales were made by the apparel and lifestyle segment. According to Global Powers’ 2017 report, emerging markets tend to shop more online than in physical retail stores. The e-commerce business is booming and has a striking potential for the future.

According to Forrester Research, 8.6 million luxury shoppers live in India who transformed the luxury spends into a $1.8 billion industry. A third of these 8.6 million made luxury purchases online, leading to sales of $450 million. India is, right now, only emerging as a luxury market with positive forecasts. According to Forrester Analytics, e-commerce will drive 59% of luxury sales growth by 2023 globally. Advertising digitally is also a powerful tool to increase brand equity.

The blending of the digital and luxury fashion is the way of the future. However, both these segments, despite their mammoth projections, face difficulty in the Indian society.

THE DIGI-LUX DILEMMA

Indians, who traditionally believe in forming close ties even in business, are a people who prefer personally approaching local traders and tailors for most purchases and transactions. They believe in seeing, feeling the quality of cloth, placing orders for their customised designs and ensuring proper delivery. Having personal bonds also translates into a fair transaction and a guarantee for good post-purchase service. It has taken Indians some time to develop trust in the intangible nature of online transactions - even more so when it comes to clothing because of the variable sizes and the caliber of fabrics involved.

Luxury is all about the experience. The buyers of luxury articles look forward to enjoying the in-store ambience, the rich texture of the cloth they’re looking to buy, the entire glamorous feel that marks itself apart from the ordinary. Brands such as Chanel, earlier in the decade, were opposed to the e-commerce of luxury. What if luxury firms adopt an online retail format and lose their pleasurable sensory experience, exclusivity, and brand image? After all, its the affair of luxury that’s so extremely breathtaking, almost ethereal.

“Indian consumers who have hesitatingly developed trust in online players to be able to purchase a casual dress or a handbag still find it difficult to spend over $600-700 for a premium purchase without the touch and feel of the product,” says Abheek Singhi, a retail expert at The Boston Consulting Group.

How are the Indian customers supposed to make such extravagant acquisitions without a promise of its quality?

Digital luxury has certainly taken some time to be accepted. Let’s take a look at some of the reasons that this merger was acquiesced by Indians.

THE GROWING POPULARITY OF DIGITAL LUXURY

With policies like “Digital India”, access to internet has grown over the past few years. This hike in the use of internet and the rise of e-commerce websites (and their campaigns assuring the service and quality) have led to considerable benefits for the digital luxury brands. There are also some other demographic and psychographic factors at work which have facilitated the rise of luxury e-commerce.

1. Millennials and Generation Z

India is home to the world’s largest millennial population. As their spending power grows, the image-conscious youth of India invests progressively into luxury fashion. Being digital natives, they are very comfortable with conducting business over the internet and do not carry reservations like the older generations. It is their ideals and desires that luxury brands are increasingly catering to. As the millennials and Gen Z seek for authenticity and comfort as well as the brand and the status that comes with it, an amalgamation of high street fashion and luxury is visible. The collaboration of Sabyasachi x H&M on the theme of “wanderlust” is one such example. It also speaks of the youth’s fancy and preferences that shape their personalities - environment loving, freedom hungry and comfort driven. Digital assistants recognizing voice commands has only added to the impulsive nature of online purchases.

Source : https://www.shaadisaga.com/blog/sabyasachi-collaboration-with-h-m

2. Social media

The youngsters of India are fairly active on social media. In fact, they observe and obtain their favourites and build their opinions according to the trends. A lot of networking and exchange of ideas is facilitated by social media platforms - it impacts the brand image. An aesthetically maintained and curated presence on visual social networks such as Instagram reinforces the glamour of premium luxury and establishes aspirational value for the brand. Digital marketing for luxury brands also includes influencer marketing; a very effective tool employed by brands over social media. It acts as word-of-mouth marketing, taken very seriously by the influencers’ loyal followers. More than 70% consumers in India are likelier to make their purchase based on social media reference. Furthermore, around 70% of teenage YouTube subscribers trust influencer opinions over traditional celebrities.

Source : https://www.instagram.com/juhigodambe/

3. The expansion to tier 2 & 3 cities

Most luxury brands fixate their sights on the metropolitans, losing out on the very promising smaller cities. Customers outside of the metro cities are left with fewer available options to shop luxury because of a lack of luxury retail stores. They could do so more conveniently online. Forty-four percent of wealthy Indians reside in Tier 2 and 3 cities where the highest demand is for luxury automobiles, followed by apparel for women and accessories for both sexes. An affirmative example that highlights the prosperity of these smaller towns would be the exclusive trunk show by Judith Leiber in Indore, a Tier 2 city of India. Sales from this event equaled 10 percent of the previous years. With the maximized reach achieved through digital media, even the affluent citizens of these conventionally difficult-to-touch areas are attended to. Although maximum sales are derived still out of metros like Delhi NCR and Mumbai, the substantial market for luxury goods in Pune, Ahmedabad and Hyderabad is not being overlooked by the brands.

PERFORMANCE DRIVERS OF DIGITAL FASHION LUXURY

Let’s explore what are the top online luxury fashion brands doing right.

1. Providing e-service

Most luxury brands are from the USA or Europe. However, it’s the consumers from the emerging markets who are driving the online growth. It is imperative for the luxury fashion houses to provide a seamless e-commerce experience that transcends beyond international borders. Many digital luxury groups have designed their website interface in a way that evoked luxurious extravagance in the minds of their online visitor. This evaluation of the brand in the minds of the clientele impacted their revisit intent. The quality of the e-service provided also influences the customer’s e-satisfaction. The language change function on an international website, ease of locating items, user convenience, detailed product information with accurate representation, shipping, on-time delivery and return information were all elements taken into account while designing the online showroom that provides the clientele with a smooth experience.

2. Localization of global luxury

India is a vibrant nation of diverse people. Culturally rich, each region has distinct and unique preferences for luxury. In this country flaunting multitude of languages, religions and festivals, luxury digital advertising has to be tailored and custom-fit to the localized fabric and tastes of the people. The new Indian customer has to be reached out to, engaged, informed, indulged, entertained and then retained via regionalized aesthetics and marketing. Digital luxury transforming brands and consumer experiences is the reality of these times. Taking an example out of the luxury fashion enterprises, Montblanc - a luxury pens brand - has regionalized all its marketing material.

“There is a clear distinction in customer values between [Indian] states,

said Tanya Kapinda of ID8 Media Solutions, an agency which works with Montblanc’s marketing division in India. “Any time a letterhead, invitation or a newsletter is produced, we customize [it] according to the local language and other aesthetic considerations such as colours used and the amount of decoration.”

To resonate with Indian shoppers, luxury fashion brands have also designed collections specifically considering their tastes and behavior. Giorgio Armani’s exclusive Indian capsule collection of Achkan jackets for Autumn/Winter 2019 gained success as the first drop was completely sold out.

CASE STUDIES

As the online luxury commerce in India grows, Indian conglomerates are looking to invest in their own e-luxury ventures. With the online luxury market burgeoning, there are a few different players in the industry looking to benefit from its growth. They have developed and launched various business models to tap into the success of digital luxury.

Ajio Gold

Growing steadily over the past few years, fashion e-commerce platforms such as Reliance-owned Ajio have been carrying “bridge-to-luxury” brands.

“Data-driven insights from the ‘bridge to luxury’ brands that retail on Ajio have indicated strongly the possibility for Ajio to craft a luxury vertical, and we are exploring [that],” the Ajio spokesperson says. Reliance looks to develop the luxury commerce under “Ajio Gold.”

“Trust is of utmost importance in the online luxury segment, which is why online shoppers are usually hesitant to buy luxury brands online,”

says Satish Meena, senior forecast analyst at Forrester Research. “But due to Reliance’s relationship with these brands, customers are bound to have more trust in purchasing these products online.”

Tata Cliq Luxury

The Tata Group launched its e-commerce luxury platform, Tata Cliq Luxury, in 2016. Housing a wide range of luxury apparel and accessories, the the luxury fashion destination aimed at providing the consumers with a curated assortment of the best brands with a lavish, authentic luxe brand experience.

"Tata CLiQ Luxury will for the first time provide luxury customers across the country, access to authentic merchandise directly from top international bridge-to-luxury and luxury brands," Ashutosh Pandey,

Then-CEO of Tata CLiQ, said,

"We aim to leverage the legacy of the Tata Group, which has set the standard for luxury and sterling service with marquee names, to create a gateway to high-end fashion, exquisite products and a great experience," he added.

Luxépolis

An online marketplace dealing in both new as well as refurbished luxury, Luxépolis pioneered the second hand luxury e-commerce in India. Featuring the most coveted vintage and fresh luxury items - fashion accessories, watches, jewellery and luxury automobiles - the goal for Luxépolis was to become India’s most trusted online destination for luxury shopping & selling. A place where luxury products have resale value and become an investment asset.

“There’s a latent and significant demand for international designer and luxury brands that you don’t get easily in India, (Luxépolis) will hopefully fill this gap” said the co-founder of the platform, Vijay KG.

“We have invested in a global authentication team that has a collective experience of 150+ years in identifying fake branded products and every pre-loved luxury purchase comes with an authenticity and grading certificate, similar to what consumers get when they purchase diamonds/gold jewellery. We also provide 100 per cent purchase protection to our consumers,” he answered when asked about the authenticity of luxury products being sold on his platform.

As the DigiLux segment continues to flourish in India, we can expect the splendid fashion-makers to set it as a trend.