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14 April 2015

Luxury Online 

The announcement by Chanel that it will harmonize its prices across the world by the end of this year as a step toward the future creation of a global e-commerce platform could effect luxury-brand tourism.

The French fashion house wants to court loyal and local customers who are ‘seduced by the brand’ and its products, rather than by variations in price from country to country. It also seeks to still any doubts about the authenticity of products arising from price differences.

The move is bad news for European customers of Chanel, who will see prices rise, and may deter international tourists who regarded luxury-goods shopping as a natural add-on to European holidays. But it is good news for brand-conscious Chinese consumers, for whom domestic prices will fall.

Chanel’s longer-term aim is to extend its online presence beyond beauty products, an ambition made more real with the announcement of its partnership with Net-a-Porter to make a fine jewellery collection available online.

This is a trail-blazing move. Luxury retailing remains the preserve of high-gloss stores and glamorous sales assistants, with only 6% of sales made online last year, but this could be about to change; Euromonitor predicts that the share of internet sales will reach 8% in 2016.

The merger announced at the beginning of April between Italian online fashion retailer Yoox and Net-a-Porter could also speed the process. Yoox has created and run shopping sites for luxury Italian brands Roberto Cavalli, Jil Sander and Ermenegildo Zegna, among others. With Net-a-Porter’s customer recognition, the combined business promises to take online luxury shopping to a new level.

Chanel is just one retailer, and there will always be customers who would rather try on $1,000 shoes before buying, but the success of sites such as Net-a-Porter suggests that it is not important for everyone.