Imagine you are a top retail executive at Giorgio Armani, and you announce at a board meeting: "This year we will re-design all our retail stores to make them appear identical to Abercrombie & Fitch." There will be stunned silence, followed by a request to leave the room and close the door firmly behind you, never to be invited again.
Yet, looking at the image above, how can it be that the top e-commerce executives at Armani and A&F have done exactly that? They designed an online shopping experience that is almost identical to each other and that bears no obvious resemblance to either of their unique and iconic brands. So how can it be that these executives are not fired on the spot?
"Once you pass the beautiful landing pages, the e-commerce pages of luxury brands look bland, brand-less and identical to each other."
Just to be clear, I am picking - unfairly - on these two great brands. But in fact, the following can be said for all online stores of high-end brands: "Once you pass the beautiful landing pages, the e-commerce pages of luxury brands look bland, brand-less and identical to each other."
And it gets worse: Please go ahead and compare the e-commerce experiences of your favorite luxury brand with those of mass-market bargain brands. You will soon realize that e-commerce sites of luxury brands, such as Armani and A&F are not just copying each other, they are copying all brands, including Costco and Walmart, even though the latter retail brands are fundamentally different.
Yet, here in also lies the answer: The fact is that after 15 years of e-commerce development and hyper-growth, the only type of e-commerce platforms that exist today are the ones focused on mass price-comparison and transaction-completion. In other words, even if luxury e-commerce executives would want to (and believe me they do) design an e-commerce site that is truly unique to their brand, they cannot do it, because almost all the leading e-commerce platform companies are focused on high-volume, low-cost, cookie-cutter solutions rather than creating exclusive and one-of-a-kind luxury experiences.
There is a 'Unicorn' opportunity for a new generation of startups and investors to disrupt the e-commerce space by creating high-end mobile commerce experiences where the main focus is not on price and transaction, but on multi-sensorial, immersive and aspirational shopping.
So, what does that mean for investors and entrepreneurs: In my view, there is a 'Unicorn' (re: investor speak for a $1B+) opportunity for a new generation of startups and investors to disrupt the e-commerce space by creating high-end mobile commerce experiences where the main focus is not on price and transaction, but on multi-sensorial, immersive and aspirational brand experiences that captures the essence of each unique brand. This will lead to both high margin 'price-is-not-an-issue' and impulsive 'got-to-have' purchases of branded and luxury goods.
Fortunately, there are already technologies emerging that could disrupt e-commerce in this way, including mobile Virtual Reality and Augmented Reality. It could soon be commonplace to walk through a photo-realistic virtual Armani store using a VR-enabled mobile phone. Customers can then finally experience the high-end ambiance, exclusiveness and personal service of Giorgio Armani, or at least his virtual self.
In the next post, I will dive deeper in how the above problem, and subsequent opportunity, can be resolved with several of today's existing and emerging technologies. I won't start with the technologies themselves (I am not a believer in technology for technology sake), but instead I will try to analyze how consumers actually shop and how brands like to present their products, so that we can then create the right strategies and identify the right technologies for each brand.