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Five top brands capture 75% share of online luxury sales
Sep '13
Luxury retail is defined by the total, tactical experience whether shopping in stores or online.  Consumers expect to be wowed by every interaction, and they expect the same perfection, personal attention and level of service whether on a brand's website, social media page or in-store, and whether on a tablet, smartphone or laptop according to a study just released by PM Digital, a New York based digital marketing agency.

This is among the findings in PM Digital's Trend Report: Luxury Brands Online, which analyzes the state of luxury e-tail and predicts how emerging digital platforms and social media trends will impact the industry.

"One of the aspects that makes this report so interesting is the way in which search and social marketing practices of luxury brands differ from that of other retail categories," said Suzy Sandberg, President of PM Digital's Global Digital Media division.

"Whereas some luxury brands may be slower than non-luxury retail brands in adopting ecommerce, the sophistication of their social marketing and fan growth counts far outpaces their wider retail industry counterparts. This is just one example of how the luxury category behaves differently and why it's important to drill deeply into this particular vertical in order to understand the nuances that support their unique goals."

According to the report, all digital channels- paid and organic search, email, social and display- will have a major effect on luxury brands as they increasingly shift toward mobile and omnichannel offerings. Mobile will become even more integrated with the live experience of in-store shopping than online already is, since consumers can now access their favorite brands at any time by reaching into their pocket or purse.

Additional key findings from the study reveal:

- Traffic to luxury brand sites is up 10% in 2013 YTD.
- The five largest luxury brands (Ralph Lauren, Coach, Michael Kors, Louis Vuitton and Gucci) captured 75% of traditional online market share and 68% of mobile market share.
- Search engines remain the largest source of traffic to luxury brand sites, accounting for 51% of all visits.  This dependency outpaces that of the broader apparel and accessories category.
- Nearly all major luxury fashion companies now offer e-commerce, but too many are still leaving traffic on the table by not running paid search campaigns.
- Handbags and shoes are the most popular products driving search clicks for luxury brands.  Most of these searches include brand words, indicating a high degree of brand loyalty and decisiveness, although a higher-funnel marketing channel may also have driven them to search.
- Luxury brands are largely absent on Google Product Listing Ads at this point. However, luxury products often appear with department store or multi-brand reseller's Product Listing Ads.
- Luxury consumers are among the most-connected demographic groups, with twice the smartphone ownership rate as the general population.
- Social media accounts for 6% of traditional web traffic to luxury brands, and nearly all of it stems from Facebook and YouTube.  Many brands have also achieved sizeable, and still growing, audiences on Twitter, Tumblr etc. Engagement on these sites is mainly disconnected from visits to brand sites, but that is less true in a mobile environment.

PM Digital

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