E-commerce will not replace brick-and-mortar stores, but will serve as a complementary sales channel, according to Rami Tabiaat, president of Kuwait-based fashion retailer Al Ostoura International Company, which also has an online shopping website.
Tabiaat’s remarks came at an e-commerce panel at the arab luxury world conference, which concluded yesterday (Tuesday, June 3) at The Westin Dubai Mina Seyahi.
One of the reasons luxury brands are hesitant on selling online is brand perception. He says: “Luxury brands are worried about their image and how much new things will dilute how customers see their brands. This evaluation is what often stops luxury brands from being the first [to get into e-commerce].
“Statistics also show that very few [brick-and-mortar stores] have been successful at both [online and offline]. So, the odds are stacked against us.”
However, it is a useful learning experience for brands that decide to go online. He adds: “One of the very important things is that doing e-commerce actually gets you to see and question what you are doing right in the brick and mortar and how you are going to translate that into e-commerce and vice versa. When you think about how to get conversions and sales on e-commerce, you have to break it down to minute details, whereas [in an offline store] if you have a good sales person, they do it for you. The learning experience is really enlightening for brick-and-mortar companies when they go into e-commerce and back and forth.”
According to Kunal Kapoor, founder of online store The Luxury Closet, another reason brands are hesitant when it comes to e-commerce is that their sales models are highly focused on customers’ in-store experiences and interactions with salespeople. “They spend a lot of time and resources, from the product to the retail environment and sales, and that is where it stops. With e-commerce, it is a bit different. [For us], when an order or inquiry comes up, we spend 70 per cent after that.”
Hassan Mikail, global director of e-commerce at Aramex, adds: “Luxury brands were late to the [e-commerce] game, but I’m seeing a lot more of them come online.” He points out, in the future, it will become increasingly important for brands to have a digital presence to cater to the new tech-savvy generation that spends considerable time online.
According to 2013 figures, the global e-commerce industry is worth approximately €10 billion, says Kapoor. “It is approximately two per cent to three per cent of the global luxury sales. However, it is growing twice as fast as luxury sales are growing across the world.”
Wednesday, June 4- 2014 @ 15:45 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.