The Development of an E-Commerce Model in the Luxury Industry

The demand for luxury goods is continuously increasing. As the population in most cities rises, the number of potential buyers increases, too. Additionally, most social classes steadily grow wealthier which is why more people can afford luxury goods. Still, luxury brands stand for exclusivity, elegance and scarcity. But in the recent past, a conflicting development changes traditional business. The innovative approach of digitalization exerts pressure on luxury brands and still is determined as one of the most influential trends in the whole industry. The internet is accessible to everyone and represents a retail channel that sells mass products at discounted prices. Luxury industry has to find possibilities to manage the growing phenomenon of e-commerce while preserving the brand image from dilution. But how can the luxury industry benefit from the technological innovation? Is it possible to integrate this growing and profitable mass market channel into the privacy of the exclusive luxury strategy? Anastasia Sobolev examines how the incongruences between the internet and the luxury industry can be solved. She develops an e-commerce model which offers useful solutions for luxury brands in order to expand their distribution network.