penetrations in the world, 23 million out of 30 million cell phones were
internet enabled by the end of 2005. This factor fuels product accessibility, e-
shopping and instant information dissemination. The Internet has also over-
taken television as the most heavily used communications medium among
young consumers and teenagers in Hong Kong. In Shanghai, there are several
WiFi ‘hot-spots’ around the city including several retail outlets and eateries
like Starbucks cafés.
These indicators show that a growing number of consumers currently have
internet access at their fingertips and therefore the possibility to shop at will.
In addition to online penetration and e-shopping of general consumer
goods, the demand for the e-retail of luxury fashion goods is on the increase.
As earlier indicated, a large segment of the world’s wealthy consumers has
constant internet access and are increasingly making online purchases. In
several countries, the ratio of wealthy people who have bought products
worth above US$250 online versus the rest of the population is 3:1. This
provides evidence of the viability of the e-retail of luxury goods. It also raises
the following question:Why are the majority of luxury brands reluctant to satisfy the consumer demand
for the e-retail of luxury fashion goods?The answer is mainly that luxury brands have a major concern related to the
possible loss of the brand aura on the Internet. Other reasons include the lack
of e-business planning and implementation know-how of online luxury. The
subsequent sections of this chapter aim to clarify the major strategic issues
related to the e-retail of luxury goods.E-retail attributes
The internet as a retail platform is uniquely different from conventional
bricks and mortar retailing. The key attributes of e-retail are shown in Figure
6.1.The internet as a retail location
The internet is the most accessible platform for retailing the products of
global brands as well as enhancing brand equity and customer relationships.
This includes luxury fashion brands, which thrive on global awareness and
operations.
The famous retailing adage, which states that ‘the three most important
things in retail are location location location’, recognizes location as the
central aspect of retail, and this reasoning can also be applied to the internet,182
luxury fashion branding