Why Luxury Fashion Brands Keep Their Clothes Offline!

If you are into fashion or are yourself a fashion entrepreneur, you may have noticed one crazy fact: the most exclusive luxury brands often avoid selling their wares online. If you want to buy clothing from brands like Chanel, Céline, Dior, and Hermes, for example, you will have to go to a physical location. But why do some luxury clothing brands keep their clothes offline?

The reason luxury fashion brands keep their clothes offline are:

So Clients Come to the Store
To Facilitate Custom Fittings
To Build Exclusivity
Because Sales are Already High
To Maintain Brand Value

Luxury fashion designers must be doing something right. The industry generates $106 billion annually, and in the next five years, analysts anticipate that number will grow to $132 billion.

But the most surprising fact about that is that many of the most popular brands sell very little online. They are one of the few businesses that rely on brick-and-mortar footprints to sell their products.

If you are thinking of starting a luxury fashion brand, you may consider doing the same thing. But first, you must ask yourself—how much money do you stand to potentially lose by not selling your product online?

Luxury fashion doesn’t have this problem. More people are finding their way into luxury brand stores than ever before. Their reluctance to do business online might just be why they are doing so well.

Let’s look at why this might be the case.

Table of Contents

So Clients Come to the Store

The number one reason that luxury brands avoid selling online is so they can get more clients into the store. After all, many of these properties are located in ultra-high-end locations. Why pay for all that real estate on Rodeo Drive just to sell online?

How Much Do Luxury Brands Pay for Store Space?

According to the LA business journal, the average monthly rent for retail space on Rodeo Drive is $72.91 per square foot. On Fifth Avenue, luxury clothes purveyors can expect to pay upwards of $250. And we’re talking monthly rates.

Rodeo Drive is only three blocks long but is crammed full of high-end fashion stores, including Louis Vuitton, Goyard, Cartier, Ralph Lauren, Versace, Vera Wang, Tiffany & Co., Chanel, Gucci, Prada, and Saint Laurent.

At 24,000 square feet, Prada is paying around $1.8 million in rent per month for their Rodeo Drive location, assuming they are paying around average rates per square foot. This disincentivizes them to make their products available online since it would cannibalize their in-store revenue.

Control the Experience

When you shop online, the only control a brand has over your experience is what they can control on their site. Slow-loading Internet, problems with payment processing, and hacking—are all things brands cannot control. They don’t want to lose sales due to issues outside of their control.

At Louis Vuitton, the $75 billion brand makes sure you not only have elegant clothing but that you also have a bespoke experience every time you enter a store. Check out this article that has descriptions of the top Louis Vuitton stores in the world, including the one in Singapore that gives you the feeling of being on a yacht.

To Facilitate Custom Fittings

If you have only ever bought your clothing off the rack, you have no idea how great a custom-made suit or dress can make you feel. A second reason luxury brands don’t sell clothes online is that they custom fit their lines to your contours.

Ready to Wear

Ready-to-Wear or Prêt-à-Porter clothes are offered by many luxury brands. These clothes are typically factory-made in a range of sizes. Sometimes luxury brands do make ready-to-wear clothing available online, such as this Cliquetis jacket from Hermès.

But that’s the exception instead of the rule for most luxury brands. Even when clothes are “ready to wear,” they still need to be tailored to your measurements. Especially when you’re paying $2,700 for a sports jacket.

To encourage people not to wear ill-fitting clothes, high-end stores make tailoring and custom fitting available in-house. Often, this tailoring is complimentary.

What To Put And Sell In Your Boutique!

Haute Couture

Haute Couture is fashion with a highly artistic flare. You are more likely to see Haute Couture on a Parisian runway than on a subway. And if you’re rich enough, you can buy a piece of walking art yourself, but you won’t be able to buy it online.

Often you can’t even see a label’s Haute Couture offerings online. You can compare Prada’s Haute Couture with its ready-to-wear lines on this Vogue page. How can you tell the difference? Ready-to-wear is marked as such. The rest is, by default, Haute Couture.

Notice that only the men’s Haute Couture is included. To see what’s available for women, you will have to go to a fashion show or a store. To buy it, you need more than money. It would help if you also had connections.

To Build Exclusivity

Why do luxury brands make Haute Couture and even ready-to-wear clothes so hard to find? Wouldn’t they make more sales if they offered these items online?

Perception of Rarity

What makes something valuable? Value is in the eye of the beholder. The value of an item relates to how much someone is willing to pay for it—nothing more. Many factors determine willingness to pay. One of the most important ones is how rare a product is perceived to be.

According to scientific research, people equate the value of an item with how rare it’s perceived to be. That’s why people are willing to pay more money for rare baseball cards even though they are made of the same material as commonly available ones.

When something is available online, it doesn’t seem very rare. When available only in a limited number of stores, it seems rarer. This allows luxury brands to charge more for rare items.

Exclusivity in Store

High-end fashion brands don’t only make their products seem rare, but the fact that they are locked up in a guarded store that you must wait in line for before finally being granted access inside also adds to the perception of exclusivity.

Luxury brands want you to feel like you are one of the privileged few who have access to their products. And if you can afford them, you are in this exclusive group. The more exclusive a product is, the higher price a brand can charge.

Because Sales are Already High

You don’t change what’s working. If your sales are already high, why get greedy? If there is no pressure to expand to online selling, why should luxury retailers go through the painful process of adding another sales platform?

Why Boutique Clothes Are Priced So Expensive

If It Ain’t Broke…

Like objects in the physical world, businesses tend to follow the rules of inertia. They don’t tend to change their ways unless an external force acts on them. This stops them from wasting resources, but it also can prevent them from making good business decisions, too.

Why doesn’t Blockbuster video exist anymore? Because they could not conceive of people wanting to watch movies online. Netflix took a different approach and expanded to streaming video even when their online DVD rentals were doing well. Which one is still in business today?

So since sales are already high, luxury brands don’t have the pressure to change and make their products available online. Is this a mistake? Only time will tell.

To Maintain Brand Value

Besides the perception of rarity, luxury brands do well because they have built reputations based on quality. A Louis Vuitton purse lasts forever. When you consider that you can buy an item you might well use for the rest of your life; a $4,000 bag somehow seems less expensive.

Supply Chain Adulteration

Luxury clothing retailers are wary of supply adulteration. Specifically, the possibility of counterfeit goods entering the marketplace and being sold as the real thing is a risk to their business because these low-quality alternatives undermine their overall brand.

How serious is the issue? Even reputable online marketplaces like Amazon have been found to have thousands of counterfeit goods for sale.

Preventing Counterfeits

The best way to combat counterfeits is to make it known that your products are only able to be sold at your physical retail locations. If people know your products are not available for sale online, there is a significantly reduced risk of online counterfeits undermining your brand value.

It’s also a good idea if you are looking to purchase a luxury item to do so in-store if possible. Not only will you avoid counterfeit items, but you will also have the experience of getting the complete treatment!

Why It Is A Good Idea To Start A Clothing Line!