Radar: Luxury brands lobby against online
The Times reported today that big luxury retailers are saying “no” to online shopping. Brands such as Burberry, Louis Vuitton and Gucci have been working hard to outlaw the discounted retail of their goods online. Passed in Brussels, the law stipulates that they have the right to revoke sales, unless the retailers have “brick and mortor” buildings on high street. The luxury brands have been lobbying Belgium for quite some time, “We don’t invest huge amounts of time building these brands only to have someone come along and basically free-ride off the investment we make,” a source told The Times. Just google “discount luxury goods” and tons of sites pop up offering discounts of up to 75 percent off. Every found yourself scouring those perfume sites that offer up to 50 percent off? Small online perfume shops have been a major issue, advertising fragrances by Chanel, Armani, and Gucci for a fraction of their original value.
The article added that this won’t affect online giants like eBay, Net-a-Porter, and Amazon but instead, smaller sites that offer unregulated savings on products. The biggest issue to the brands is the fact that their name as a luxury retailer is compromised each time their products are sold for huge unauthorized discounts. Some are worried that this kind of regulation will make it impossible to offer any discounts at all on luxury goods. However, it is imperative to this brands to remain exclusive. Luxury goods by Louis Vuitton, Givenchy and others, were originally only available in their boutique stores.
A spokesperson for Amazon told The Times, “We are confident any manufacturer who wants to sell products will decide to go where customers are — and today over 50% of Europeans and over 46m in the UK can be met online.”
The law is currently being enforced in Europe. It’s hard to say if this new rule will have a large effect on online sales but it is important that web pays attention to old school rules of branding.