The global fashion industry is certainly no stranger to high-end luxury labels, and the market has become even more competitive in recent years due to a new player: Farfetch. The digital platform is shaking up the space while attempting to sell designer goods at discounted rates, but there’s one problem: European luxury labels have no interest in participating. This has severely hampered Farfetch’s ambitions and frustrated fashion shoppers around the world. Read on to find out why this is the case, and what the future holds for the luxury fashion industry.
1. The Growing Problem of Discount Aversion in Europe’s Luxury Fashion Market
High-end fashion boutiques across Europe have noticed a troubling trend in recent years – a growing aversion to discounts among their customers. Luxury is all about creating a sense of exclusivity, so for retailers to achieve their desired level of urgency and generate sales, discounts should be a last resort.
However, customers have grown so accustomed to discounts that they now expect them as a standard part of luxury shopping. They’ll either delay a purchase until a discount appears, or go looking for a cheaper alternative as soon as they come across a high-end product. This has put huge pressure on retailers who are struggling to balance their desire to hit their targets without devaluing their brands.
- Customers have become too used to discounts
- Retailers struggle to balance sales targets and brand value
2. Farfetch’s Struggle to Make Inroads with Fans of Luxury Labels
In their bid to gain footing among shoppers of luxury labels, Farfetch have had to confront a few challenges – both challenges brought by their own operations and those by the nature of the luxury market.
- The first of these is the challenge of price. Being able to purchase luxury items at discounted rates could put off the regular buyers of the expensive labels – thereby negatively affecting their already established customer base.
- The second of these is the challenge of escapism – when shopping for luxury, shoppers look for an appeal in the buying experience. To purchase something from a website is convenient, sure, but doesn’t carry the same glamor as stepping into a swanky boutique or department store.
Farfetch have taken steps to solve both these problems, with varying degrees of success. Firstly, their prices are often more competitive than the physical stores, and they often offer exclusive discounts and promotions. This has allowed them to pick up customers that are looking for deals on luxury labels. Additionally, Farfetch partner with various physical stores – offering customers a more ‘end-of-the-road’ buying experience with in-person help if needed.
3. A Limited Approach to Enticing Consumers into the Luxury Market
Luxury markets tend to remain exclusive with aspirational clients usually the only ones accessing the higher price points. However, there are creative ways to make these products and services available to the wider market whilst still staying true to the ethos of the luxury sector.
- Targeted Marketing– Strategic marketing campaigns can be used to attract a certain demographic with campaigns tailored to the desired demographic.
- Discount Deals– Introducing a limited range of discount deals can be used to encourage people to take the plunge into luxury markets.
- Product Bundles– Well thought out product bundles can also be used to entice customers while still allowing access to the higher price points.
Smart, budget-conscious consumers appreciate bargain shopping, which can be an attractive draw towards more luxurious products and services. By embracing these creative strategies, luxury brands have the potential to take advantage of a wider consumer base whilst still championing their distinctiveness.
4. Insuring Luxury Brands’ Ongoing Sustainability in a Challenging Market
Luxury brands have always had to grapple with the challenge of staying relevant and in the minds of their customers. With a challenging market becoming more intense, these brands are needing to be more innovative and proactive to ensure their ongoing sustainability.
However, they can achieve it by doing the following:
- Develop deeper customer relationships. This can be done by using customer feedback and insights from previous experiences to create a personalized strategy for brand loyalty and a deeper connection with customers.
- Engage in digital marketing. Luxury brands need to become more active in digital marketing, which can be done through the use of sponsored social media posts and video campaigns.
- Improving product quality. Products need to stand out from the competition in terms of quality. Luxury brands should focus on ensuring their materials are better than rival brands to guarantee customer loyalty.
Overall, luxury brands need to focus on deepening customer relationships, using digital platforms for promotion, and consistently providing quality products to ensure their sustainability in the challenging market.
Farfetch’s ambition to offer rare and exclusive discounts on sought-after European luxury brands that maintain their high value may leave them feeling frustrated. Yet, despite their struggle to break through this wall, Farfetch continues to be determined to provide luxury shoppers with the most distinguished and exclusive discounts. As they quest to bring forward their bold idea against some of Europe’s biggest fashion labels, Farfetch remains edgily determined to provide exclusive discounts to luxury shoppers.
