Spend, splurge, indulge. Not so long ago, that was a lot more tedious, trawling through malls to seek out good buys. The ease of online shopping has made this a lot more effortless, and as incomes rise, so does the amount of money one spends on average on purchases, including what we call the “impulse limit” – the number which makes you pause and consider whether it’s a worthwhile purchase or not.
The biggest companies in online shopping today are probably Amazon and Alibaba but luxury retail has had two primary names attached to it: Yoox and Net-a-Porter. The former is one of the largest behind-the-scenes retailers, building platforms for various luxury brands such as Armani, Ermenegildo Zegna and Lanvin. It also partners the Kering Group to deliver online retail experiences with its fashion labels such as Yves Saint Laurent and Bottega Veneta. While Yoox operates a general fashion retail presence with off-season products that range from fashion to homeware, its high profile sib is thecorner.com, that caters to cult labels and cool designers.
Net-a-Porter, which is partially owned by the Richemont conglomerate, is best known for its fine luxury products and creative editorial experiences turning native advertising into online retail success. Founded by Natalie Massenet, the group owns three sites, Net-a-Porter, Mr Porter and theoutnet, which caters to womenswear, menswear and off-season retail respectively.
Now, the two biggest luxury online retailers are merging into one single entity, valued at approximately S$4.6 billion. That’s a lot of zeroes. The group will have an annual turnover estimated at nearly S$2 billion.
The Business of Online Retail
Online retail is at an all-time high, and mobile retail is rocketing upwards. E-commerce experts expect double-digit growth in online sales overall, and while e-commerce makes up just a few percentage points of luxury sales, the digital experience itself lends benefit to brick-and-mortar business. Multi-brand online retailers are the new malls, open 24 hours a day, and serves up high fashion instantly. By combining logistics and warehousing, as well as technology, it offers a major challenge to other e-commerce retailers. Here are five facts about online shopping that may surprise you.
1. Nearly 40 percent of adults spent the same amount or more online than in-store.
This number ranges between 30% to 50% from the oldest age group (above 55) to the youngest (Millennials).
2. 90 percent of people who shop online make impulse purchases.
Boredom is the most frequently quoted reason why people make impulse purchases online, and this occurs on the mobile far more often than on the desktop or laptop. Men are also more likely to impulse buy after drinking, and tend to spend more than women on a single impulse purchase by as much as 30%.
3. Free international delivery makes people shop more.
Okay, it’s not so surprising, but the word ‘free’ heartens us a lot. Massively, in fact. And offering free express delivery when you spend a certain sum or more makes it more likely that people will overspend.
4. Browsing online makes you shop more in freestanding stores.
40% of those aged 18-34 have admitted that browsing online retail has led them to buy the product in freestanding stores. The online platform makes it easy to explore and discover new products and brands, which leads them to the local outlet to try it on and then buy.
5. Men do not shop less than women online.
In freestanding stores, men frequent shops less but spend more on big ticket items compare with women. However, online, the time spent on online shopping and frequency is equal on both genders. Men tend to shop more frequently on mobile devices than women. Online shoppers also have a higher average income compared with offline shoppers.