Think Tank: Luxury E-commerce and the Path to Profitability

Seismic changes in advanced technology over the past few years have disrupted traditional consumer shopping patterns, creating an increasingly complex retail landscape and, with it, a shift toward luxury e-commerce. Despite significant investments over the past decade by luxury consumer brands in e-commerce ventures related to IT, customer support and supply chains, the last rule of the notorious 24 Anti‑Laws of Marketing for European luxury brands, “do not sell openly on the Internet,” held strong. However, over the past year the consensus on this strategy has started to shift. The giants in the industry are now eager to profit from e-commerce sales, and this about-face has profound implications for the luxury industry as well as e-commerce as a whole. Shifts in Shopping Behavior According to statistics compiled by McKinsey, e-commerce sales are anticipated to reach $80 billion annually as more and more companies enter the market. For example, in 2017, even LVMH (Moët Hennessy Louis Vuitton), one of the top three conglomerates in the luxury fashion industry, entered the e-commerce market with its launch of 24 Sèvres. LVMH launched the site as an experiential online shopping platform and digital outpost for the iconic Parisian luxury department store, Le Bon Marché. These changes in the luxury retail

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