Online luxury fashion consumer behaviour

The existence of an online luxury consumer population is no longer in question and this consumer segment is also growing rapidly and steadily. Luxury fashion consumers frequently make online purchases through the limited available luxury e-retail websites. They are also more willing to make continuous online luxury purchases than offline. For example, apparel is one of the fastest growing e-retail product categories globally. An indication is that in the USA, online sales of apparel were forecast to generate revenues of $12.5 billion by the end of 2005, an increase of 23 per cent from 2004.

Consumers of luxury goods are among the global consumer population that crave continuous internet access. They represent a substantial proportion of the 600 million + consumers worldwide who currently see online access as an absolute necessity, in the same manner they view eating and sleeping. This is excluding the estimated near 1 billion online users exposed to e-retail. A large portion of this online population represents high net-worth individuals who have the resources and willingness to purchase luxury fashion goods on the Internet.

The evolution of e-retail since the DotCom crash of the late 1990s and early 2000s has enabled a prolific environment for e-retail. The widespread adoption of high-speed internet connections has changed the perception of consumers to online shopping. Also, the introduction of secure payment systems and development of e-CRM methods have dispelled consumer fears related to payments, refunds and after-sales services. As a result, consumers currently exhibit a high level of confidence in online shopping and in spending vast sums on the internet.

However, consumers that are likely to purchase luxury goods online are those with a prior offline relationship or exposure to the brands. This is because consumers are influenced by their previous shopping experiences and brand relationships both online and offline. This experience affects their assessment of the current online purchasing process. If the consumers already have a positive brand experience, it enhances their evaluative process and the decision to buy the products of the brand online. At the same time, the website must satisfy consumer needs and exceed their expectations.

The website of a luxury brand is expected to meet more than the minimal requirements of e-shopping, like ease of navigation and appealing design. This is because the luxury-purchase decision process utilizes a high dose of emotions and irrationality which are boosted by high-impact experiences. The emotional responses of online consumers must be enhanced through capturing the right moods and feelings on the website. This is key to ensuring the ultimate goals of increasing online shopping traffic, high sales turnover and profitability!

The online buyer behaviour is comparatively different from the offline behaviour in several aspects. The conventional offline consumer buying decision-making process starts from recognizing the need for the product to the product information search, purchase, utilization and after-use evaluation. Shopping for luxury goods both online and offline however does not follow this path as a result of the significant role that sentiments and psychology play in luxury goods purchasing decisions. In addition, the online consumer attitude is shaped by an auxiliary series of emotions and feelings, indicating a distinct process, especially in relation to luxury goods. These feelings include the total web experience and prior relationship with the brand, among others. Luxury fashion consumers have an emotional affair rather than a cognitive bond with luxury brands. This factor is also reflected in the online product evaluation and consumer behaviour.

The online luxury buying decision-making process has been excellently captured in the 'Experience Hierarchy' model of R. Mohammed et al. (2002), in their book, Internet Marketing. This model follows a four-stage process and is based on the principle that the sum of the consumer experience while shopping online determines their evaluation of the website, which subsequently

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Adoption Process Consumer Behavior
Figure 6.4 The four-phase online customer Experience Hierarchy Source: Adapted from Mohammed et al. (2002) Internet Marketing.

affects future visits. The online experience also affects the consumer's overall perception of the brand, which will determine the direction of future interaction with the brand.

The stages of the Experience Hierarchy model begin from the moment a potential online shopper clicks on the homepage, to his post-purchase evaluation process. The model is presented in the Figure 6.4.

This customer experience assessment highlights the need for luxury fashion brands to create a compelling, memorable, enjoyable and positive total customer experience for online shoppers. The website should also be consistent with the overall brand strategy in order to maintain a parallel customer perception of the brand associations. Fortunately, the high brand awareness of several luxury fashion brands provides a fast route for online luxury consumers to attain the level of 'Brand Evangelists'.

The key to attaining enhanced customer experience is to develop a website that places an emphasis on accentuating the brand characteristics and also has an unwavering focus on creating a superior customer experience for every online shopper. Luxury brands generally have desirable products but the brands that will succeed with acquiring and retaining loyal customers through e-retail are those that apply the right mix of branding, marketing, customer relationship management and transactional strategies to enhance customer experience. This is a challenge that can be overcome through the implementation of feasible e-retail strategies discussed further in this chapter.

In order to execute effective e-retail strategies, it is important to understand the characteristics of online luxury consumers. Online consumers are intelligent and should never be underestimated. They are also empowered with a low switching cost because they can move from one e-boutique to the other with a click of the mouse. This means that they are equipped to view and compare product variety, to shop conveniently and to receive delivery of goods without the extra time cost of travelling to the store. Online luxury consumers also have high expectations. This includes their opinion that although the luxury e-boutique is available to the masses, it should be designed to feel appropriate to only a niche segment, to which they belong.

Several attempts have been made by different researchers to segment the online consumer population according to their key purchasing influences. Other efforts have been in differentiating the offline and online consumer behaviours. Although a standard online consumer behaviour model is yet to be developed, a suitable model of offline consumer segmentation, which can be applied to online consumers, is that of J. Nielsen produced in his book, Designing Web Usability, where six groups of consumers were identified:

1 Social shopper: those who associate shopping with pleasure and social meetings. They are the least likely group to shop online.

2 Habit shopper: those that only visit the same stores and shop through the same medium. This group will stick to offline stores for a long time.

3 Ethical shopper: those more concerned with ethical associations of shopping like material sources and employee working conditions, than with shopping medium. They have medium online shopping potential and require websites to meet their ethical expectations.

4 Value shopper: those who seek value from an overall combination of product and service quality and cost. They are likely to scout for these features online.

5 Experimental shopper: those who are not afraid to try new stores and shopping media. This group has a high potential for shopping online.

6 Convenience shopper: those who appreciate shopping without time delays. This is the best target group for online shopping.

A large proportion of the current online luxury fashion consumer group fall within the 'Convenience' and 'Experimental' shopper segments. Their characteristics include high literacy and mobility and inter-cultural awareness as well as being high net-worth individuals. Their expectations from e-retail range from security and convenience to personal and instant satisfaction. Their chances of switching between brands are also high. This is as a result of their experimental nature and the ease of viewing numerous brand alternatives and product offerings online. Other characteristics of the current online

■5 luxury consumers comprise the following: c

• Convenience-driven x • Cash-rich and time-poor

J2 • Media and brand saturated

• Individualistic and independent

• Informed, knowledgeable and educated

• Financially, socially and environmentally aware

• Less attuned to brand loyalty and more attuned to brand-hopping

• Busy Busy Busy Busy Busy Busy Busy Busy Busy Busy Busy Busy Busy

Although online consumers are attuned to switching between brands, they are also likely to be repeat visitors and repeat buyers if they find a website visit enjoyable. At the same time, they are less likely to return to a website which they found unsatisfying than they are to return to a physical store. This is because the physical store could be located in the same vicinity as other retailers the customer visits or other activities the customer partakes in. This factor is however inapplicable online.

Online consumers are unique because they are easy recruits as 'brand evangelists'. Current pointers show that the chance of 'word-of-mouth' promotion of effective websites versus effective offline distribution channels is more than 50 per cent. Also, viral marketing or 'word-of-mouse', which involves forwarding web pages to others, is most effective with satisfied online consumers.

The acquisition and retention of the sophisticated and savvy online consumer set might seem impossible through the internet, which lacks the human charm and interface. However this objective could be approached through the four-step process of marketing communications, as follows:

Attention »Interest >> Desire >> Action

This framework may sound simplistic or indicate a transactional outlook but it is an important tool in the process of online customer persuasion.

Attention is the first step to online purchase probability. How does a website grasp a consumer's attention? This can be attained through a captivating homepage design, ease of navigation, excellent functionality, interactivity and clear and concise text and contents. These features lead to the 'stickiness' of consumers to the website.

Table 6.1 The effect of Internet features on consumers

Web element

Effect on consumers

Interactivity

Compensates for the lack of human presence

Fast service

Saves time

Convenience

Provides goods and services anytime and anyplace

Personalization

Empowers consumers to be co-creators

Customization

Gives a sense of individual recognition

Privacy

Associates the brand with ethics

Real-time communication

Shows excellent customer relationship management

Security

Breeds brand trust and loyalty

Instant product availability

Provides instant gratification

Low transaction costs

Saves mental energy and time

Additional features

Creates an enhanced experience, personal enhancement,

education and social benefits

Source: Adapted from Mohammed et al. (2002) Internet Marketing.

Source: Adapted from Mohammed et al. (2002) Internet Marketing.

Interest in a website is achieved when a consumer senses that a website has the potential of fulfilling their needs. Creativity in visual and interactive elements is a fundamental requirement to achieve this. Desire for the product and service offerings of a website are as a result of creative product and service designs and also ingenuity in their presentation, merchandizing and transactional process. The products must emanate desire and reflect the brand's persona.

Action is when the actual purchase is made, as a result of a positive customer experience. This leads to repeat-action during subsequent visits.

In addition to the online customer persuasion tactics, the design of an effective e-retail strategy involves an understanding of what luxury fashion consumers look for in a website. This is summarized in Table 6.1.

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Responses

  • bladud
    Who is the online fashion consumer?
    7 years ago

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