The global luxury goods sector is particularly buoyant and showing steady growth, it was worth an estimated €122.2 billion in 2012 (Mintel, 2013), and generated more than 230 billion Euros in worldwide sales in 2014 (Bain 2014). These factors signify that the luxury sector is experiencing a boom with strong annual growth in terms of both value and volume. Practitioners and researchers are increasingly interested in the complexities associated with the consumption of luxury products, a focus that has led to the need of contribution to the understanding in the field and as a result, new concepts and research frameworks are emerging. Strong competition from an over-subscribed luxury market is further challenged by the practice of counterfeiting, which can damage brand image and profitability of luxury brands, but serves to further reinforce the importance and aspirational attributes of luxury goods.

Similarly, e-commerce is growing rapidly and the fashion industry has become the fastest growing product category in the UK (Mintel, 2012). As Internet penetration is increasing rapidly, e-commerce becoming an indispensable complimentary distribution channel for offline retailers. In particular, the demand for luxury online sales is growing as the luxury consumer is reported to be more tech savvy and willing to purchase online in comparison to the offline purchases preferred by the average consumer (Google, 2013, Brandchannel, 2014)

Luxury fashion brands have been slow to adopt digital and online channels, as the internet challenges a number of characteristics that have been intrinsic to luxury fashion brands (Okonkwo, 2010). Kapferer and Bastien (2012) proclaim that digital is in strong contradiction with luxury in most aspects. The main question this poses for luxury brands is how to be exclusive in an inherent democratic medium that can be accessed by anyone at anytime (Okonkwo, 2017, Kontu and Vecchi, 2014, Jin 2012). Whereas the digital world is about being instant, available and accessible, luxury fashion brands are very careful to exude timeless style, heritage, rarity and service (Kapferer and Bastien 2012, Pucci-Sisti Maisonrouge, 2013). Luxury brands have been keen to maintain full control over their distribution channels and marketing messages whereas the internet and in particular social media empowers the consumer, allowing them to co-create the brand message (Christodoulides et al., 2012). Further distribution is essential in luxury management (Kapferer and Bastien, 2012) and direct operated points of sale of luxury fashion brands are often based on their flagship stores and act as a marketing communication tool as much as a sales channel (Manlow and Knobbs, 2013; Moore and Doherty, 2007). As such, luxury retail brands have been careful to create exclusive and sensory rich experiences with particular attention to the materials of the product and the environment they are being displayed and sold in (Okonkwo, 2007, Fionda and Moore, 2009, Kapferer, 1998, Kapferer and Bastien, 2012). This points to another difficulty for luxury fashion brands who seek to communicate and distribute their goods online; the sensory appeal of websites is limited to visual and audio stimulation which does not satisfy the requirement for multisensory experiences deemed necessary for promoting luxury products.

Due to these challenges scholars are in disagreement whether online fashion brands should distribute their products online or purely use the online channels to engage their consumers, but keep sales to their physical stores. Kapferer and Bastien (2012) consider selling a luxury product online as “extremely dangerous” as it reduces the “dream value”, Okonkwo (2007, p179) argues that the “adoption of the internet as a sales channel is now essential for luxury brands that aim to maintain a competitive edge.” This is supported by the prediction that by 2018 the online channel will account for 14% of worldwide luxury expenditure (Verdict, 2013), and that the luxury consumers in all markets are more tech-savvy than the general population with over 97% of luxury buyer using the internet (Google, 2013).

This study adopts Okonkwo’s (2007) point of view that most luxury fashion brands will have to adapt and distribute their products across multiple channels to satisfy the consumer’s expectations. It is theorised that the digital revolution has empowered consumers, raising expectations for different experiences and changing behaviour (Deloitte, 2011; Pine and Gilmore, 2011; Rosenblum and Rowen, 2012): The consumer experiences their shopping experience as a whole (Interbrand, 2012) and looks for an integrated and consistent experience between channels (Roy et al., 2005; Zhang et al. 2010). These new shopping behaviours have exposed retailers’ vulnerabilities in brand and process and the challenge for fashion retailers is to provide a consistent experience and tone of voice across each of these channels. This difficulty is even more prominent for luxury fashion brands.

Despite the difficulties and risks for luxury fashion brands to adapt to the multichannel retail environment several advantages in serving the multichannel consumer are identified: the multichannel consumer is considered to spend on average more money (Schoenbachler and Gordon, 2002; Lu and Rucker, 2006, Weinberg et al., 2007), buy more frequently (Kumar and Venkatesan, 2005) and has a longer customer lifetime value (Neslin et al., 2006, Schramm-Klein et al., 2011). An alterative interpretation of the luxury brand paradox could be viewed as the contradiction between the need for luxury brands to increase sales and explore new consumer segments, whilst also retaining their aura of mystery and exclusivity..

Consequently luxury fashion brands have to develop strategies to sustain their luxurious image in the online channels and even though there are an increasing number of luxury fashion houses to do so successfully like Burberry (Kapferer and Bastien, 2012) there remains a need to gain insight into how luxury fashion brands can utilise the online channel efficiently to communicate and engage with its customers. (Tungate, 2009; Okonkwo, 2010; Hanna, Rohm and Crittenden, 2011; Geerts, 2013; Heine and Berghaus, 2014; Kontu and Vecchi, 2014). This working paper seeks to address questions relating to the online consumption experiences and explores online atmospherics and their role in providing a luxury experience.

This robust, inclusive approach aspires to contribute to current understanding of online luxury fashion consumption with the aim of identifying meaningful, workable recommendations for both future research and current practice within these sectors. The study will integrate the research findings with current literature in the experiential marketing and atmospherics debate positioning the research in an area where experience and atmospherics are found to be of crucial importance to the brand: luxury fashion retail. We propose a new phrase called ‘e-luxury’ to denote our conceptual framework, which has been developed to address the current gap in knowledge surrounding online experiences in the luxury retail sector. Research that employs experiential e-luxury as the conceptual framework has not been used in the context of understanding online luxury brand consumption, as it is a recent area of growth. As such, more research is required that interrogates the complexities associated with this sector, so it is hoped that by doing so, we may better understand what is driving luxury brands to co-exist online alongside fast fashion and how they can retain their brand equity and position whilst doing so.

This notable rise in interest in online behaviour in the luxury good sector is receiving increasing attention from both practitioners and researchers as an area of growth, as such, there are many gaps in our understanding of e-luxury and the experiences of consumers online, that a study of this kind hopes to address. Thus, the aim of this working paper is to explore how to translate the crucial experiential value from the physical luxury retail environment to an omni-channel brand experience to engage a luxury consumers senses and emotions across all channels.

• Kate Armstrong(University of Greenwich, UK)
• Eva Schwarz(London College of Fashion, UK)
• Nikita Richards(Regents University London, UK)