usability and streamlining the after-sales service to include returns, refunds
and exchange of goods in physical stores, despite online purchase.
Cost
The cost of purchasing a product is not the same as the product’s price-tag.
The real cost that consumers bear includes the price of the product and addi-
tional costs like transport cost and travel time to and from the store, time lost
in parking, time spent in the store, time spent at checkout points, the mental
cost of shopping and in some cases the monetary cost of parking. E-retail
saves the online consumer these costs and hassles.
An additional ‘cost’ factor in the online sale of luxury goods is the issue of
price discounting. Consumers generally perceive the internet as a price
discount destination due to a wide range of goods that are often on ‘sale’ on
the internet. As a result, they transfer the expectation of online price discount-
ing to luxury goods. In response, several luxury brands have adopted the
strategy of online product discounting or end of season sales promotions. This
strategy neither enhances brand integrity nor sustains brand equity for luxury
brands. Ideally luxury brands ought to maintain a strict and consistent pricing
policy both online and offline. This means that if a luxury brand does not
discount the price of its products offline, the same policy should be applied
online.
Communication
Communication is a two-way cooperative process between a company and its
consumers. It provides access to feedback and more importantly to insight
into consumer needs and expectations. Marketing communication adopts
several methods in the exchange of information such as through customer
services. The internet enhances customer services through instant information
exchange with online consumers using emails and live chats. Communication
is the equivalent of ‘Promotion’ in offline marketing. However, unlike promo-
tion, which focuses on convincing consumers to make purchases, communi-
cation concentrates on exchanges, which eventually leads to conviction.
Luxury fashion brands can exploit internet tools like exclusive online
clubs, permission marketing (opt-in and opt-out), viral marketing, email news
and other customer data collection techniques to enhance communications
with the online consumers.
Computing
Computer and logistics systems are fundamental in the effective functioning
of the e-retail elements. Computing is required for effective control of the
product range, orders and dispatch. In order to manage logistics like timely
chapter 6 205digital luxury