Strategic option one eretail only

The main activity of the luxury fashion retailers that have adopted this strategic option is that of exclusive e-retailing of luxury fashion goods. As a result,

1. E-retail only

Most ideal ^

1. E-retail only

2. Aligned expertise

Retail Strategic Option

Figure 6.6 The e-retail strategic options

Source: Adapted from Harris and Dennis (2002) Marketing the e-business.

2. Aligned expertise

Most feasible 4. Channel integration

8. No web presence

Figure 6.6 The e-retail strategic options

Source: Adapted from Harris and Dennis (2002) Marketing the e-business.

all of the company's strategies are developed and attuned to online customer requirements and the e-market environment. This indicates a high commitment level to e-retail.

As of the time of writing, no luxury brand has adopted this strategy. However, several independent web-based retailers of fashion goods have emerged in different markets. A notable example is Italy-based Yoox.com, which has a global e-commmerce platform and distribution. Yoox.com is also the exclusive authorized e-commerce partner of some of the most prestigious luxury fashion brands like Roberto Cavalli (Figure 6.7), Armani and Dolce & Gabbana. The e-retailer also has the differentiating factor of a product range that includes exclusive ranges, limited editions by young designers and precious vintage items. The e-retailer also has an online design studio with a selection of books and a fully localized website in seven languages. Another luxury goods e-retailer with global distribution is U.K.-based Net-A-Porter.com, which hosts the online boutiques of Chloe and Jimmy Choo in addition to retailing products of other brands.

Others independent e-retailers are bluefly.com, glam.com and forzieri.com. Some of these e-retailers sell products exclusively from luxury brands while others have a mix of luxury, premium and mass fashion brands in their portfolios. Also some of the independent e-retailers like Net-A-Porter.com sell the goods that feature in the current season's collection of luxury brands while other e-retailers sell the products from the previous season's collections at discounted prices. Some of the products that can be

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Figure 6.7 Roberto Cavalli at Yoox.com (May 2006). Yoox.com is also the official e-retailer of goods from Armani, Dolce & Gabbana, Versace and numerous other luxury brands

found on several e-retail-only websites include those of brands like Giorgio Armani, Prada, Fendi, Burberry, Versace, Valentino, Diesel, Anne Klein, Chanel, Gucci and Chloe, among several others.

The sale of luxury goods through secondary e-retail-only websites is a source of high sales revenue and industry partnerships. It is also an avenue for the enhancement of the luxury brand aura through highly functional and interactive online experiences. However, this strategy ought to be managed by luxury brands with tact in order to avoid long-term negative results. This is because e-retailers who sell a mix of luxury and mass fashion brands could expose the luxury brands to brand dilution in the long-term. Also independent e-retailers that sell luxury products at discounted prices could foster a possible loss of pricing control for luxury brands. This means that in some cases, luxury brands that implement a 'no-discount' policy might not be able to control independent e-retailers who practise price discounts. Therefore there should be synergy between the strategies of the luxury brands and those of the e-retailers. For example, in May 2006, notable e-retailer designersim-ports.com featured the Fendi Zucchino Hobo bag with a price tag of US$269, marked down from its original US$795 retail price. Another noteworthy e-retailer bluefly.com has also featured several Gucci products sold at discounted rates of up to 40 per cent. If Fendi and Gucci both implement strict pricing strategies that do not include discounting, this could have a negative impact on the brand equity. However, the discounting strategy is often an agreement between the luxury brands and the independent retailers. From the strategic viewpoint nonetheless, a consistent branding message ought to be provided to the brands' customers irrespective of the retailer or retailing channel.

In addition, there are several websites that retail counterfeit luxury goods, with a claim of authenticity. Consumers may confuse the authorized e-retail-ers with the counterfeiters, if the luxury brands don't take measures to control the online distribution of their goods and educate consumers on where to purchase the authentic goods. Brands and e-retailers must therefore have an agreement in e-retail practices and above all, the message to consumers should be clear.

The 'e-retail only' strategy is still in its introductory phase in the luxury fashion sector, therefore its long-term effect on the luxury brand equity is yet to fully materialize.

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