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Do luxury brand collection preorders generate buzz or revenue?

October 12, 2012


Luxury fashion houses and retailers that offer preorders straight from the runway or new collections are practically guaranteed to see revenue from the efforts in addition to an increase in customer loyalty through offering exclusive products.

The live-streaming of runway shows on digital channels is now a mainstay in the fashion industry, but some marketers are looking to boost sales by letting consumers preorder coveted items that they know will be released soon. Likewise, this tactic is effective for the luxury sector since it taps affluent consumers’ need to own new apparel and accessories before anyone else and can generate emotional purchases, though retailers should be sure to transfer any returns into sales opportunities.

“Unlike in the past when only the fashion industry saw runway collections, many consumers now view the collections in real time online without waiting for months to see the clothes in fashion magazines,” said Jordan Phillips, founder and director of Lure of Luxe LLC, New York.

“The next season’s vision is now unveiled to the consumer instantly, but then consumers are expected to patiently wait for months before purchasing their favorite looks,” she said.

“Preordering helps bridge this gap and gives consumers something to act upon immediately, even if they have to wait for the delivery of the clothes.”

Sales strategy

Brands should constantly evolve their sales strategies, per Ms. Phillips. Furthermore, some luxury fashion marketers are not only live-streaming their runway shows, but tapping the buzz around a new collection to make sales through preorders.

One of British label Burberry's keys to success is allowing consumers to preorder at the finish of each runway show.

This not only gives the brand an advantage over competitors in terms of sales, but lets it get ahead of copycats looking to mock its looks for lower prices (see story).

In addition, Italian label Salvatore Ferragamo let consumers preorder looks from its women’s spring/summer 2012 collection through an interactive digital trunk show.

A microsite featured a new “style yourself” section that allowed shoppers to see how different items from the collection looked together, as well as runway videos and a lookbook. Ferragamo and Pod1 strategically designed the site to be viewable and interactive for users on a desktop or tablet (see story).


Style Yourself feature of Ferragamo's trunk show

Meanwhile, luxury marketers are also using collection preorders as an email call to action.

Footwear and accessories label Jimmy Choo sent an email campaign Tuesday that gave recipients an exclusive opportunity to preorder the cruise 2013 collection.

Retailers are also offering presales of items straight off the runway.

For example, Neiman Marcus’ spring/summer presale ended yesterday. The retailer curated its buyers’ favorite items from the runway and let consumers preorder them for a limited time.

Neiman Marcus preorder email 

Preordering events can certainly generate buzz but, most importantly, revenue.

“The buzz is always a good thing, and taking some percentage of the money before goods are received is a great source of working capital,” said Paula Rosenblum, managing partner at RSR, Miami. “The furniture industry has been playing this card forever.”

Runway to revenue

Experts agree that offering preorders via digital channels can only help a luxury marketer generate sales.

Also, allowing preorders lets luxury marketers make better planning decisions based on the most successful items, per Lure of Luxe’s Ms. Phillips.

Luxury brands should have enough pieces set aside for exclusive preorders on their own Web sites.

“In our increasingly global marketplace, luxury brands need to offer a different shopping experience at each point of sale,” Ms. Phillips said.

"Since this has become quite a competition for retailers, brands need to keep this in mind when planning collections in order to fulfill retailers’ needs," she said.

Luxury marketers likely tap an emotional side of their target audience when offering preorders, especially for sought-after apparel items.

"Preorders may actually increase sales, because if the fit is slightly off, the person may not return the product thinking that she or he may lose the weight and fit into the garment later,” said Dimitry Erez, vice president of Boston Retail Partners, Boston. “If [the customer] tried that item on in the store, she or he may not purchase at all.

“The collection may also appear more exclusive for a person to be the first one to have the product before it hits the retail channel,” he said.

While preorders can help luxury fashion houses get a sense of what consumers will respond to in the coming season, retailers might want to consider the pros and cons, per Pam Danziger, president of Unity Marketing, Stephens, PA.

"It is good for the companies, as they get an early read on what items are hot," Ms. Danziger said. "And it is good for the customers, because they can get early access to the products they desire, but it probably is not so good for the retailers.

“Retailers need to be more than a gate-keeper for luxury brands,” she said. “They need to deliver experiences to their luxury customers, not just more products.”

Final Take
Tricia Carr, editorial assistant on Luxury Daily, New York