Why Is The Online Market Place The Next Big Thing For Ralph Lauren?

A number of factors have been driving consumers away from stores to e-commerce marketplaces, including convenience, better prices, and wider product selection. Many luxury fashion brands are witnessing the gap between in-store and online sales decreasing at a sharp rate. In the U.S., a significant number of affluent households have embraced e-commerce, and are using online research to search for products. Among luxury fashion retailers, Ralph Lauren boasts the most SKUs of any brand, with almost 14,000 items available online; a figure double that of second place Armani. Furthermore, the substantial investment undertaken by Ralph Lauren to in-source its e-commerce platform will reap benefits in the future. A number of steps have also been taken to improve e-commerce sites to drive growth, such as impactful visuals, redesigned product detail pages, enhanced quick-shop capabilities, and a streamlined checkout process. Mobile traffic increased 48% year on year for FY2015, its Facebook page possesses 8.3 million fans, and its Instagram feed has over 1.3 million followers.

In a trend study conducted by PM Digital, to highlight the digital success of luxury apparel brands, it was found that Ralph Lauren captured the second highest market share of the total visits to sites in the luxury category with 18.9%, coming in a close second to Michael Kors which had a share of 19.2%. It also found that mobile devices account for 57% of the traffic to luxury sites, and social media drives 5.6% of the traffic.

The total online sales of luxury goods reached almost $25 billion in 2015, accounting for ~7% of all the luxury sales. While this may seem like a small figure, considering the fact that it was just 3% ten years ago, the growth in this segment has been phenomenal. It only seems like a matter of time before the digital sales level will match the sales of physical stores. According to luxurysociety.com, the impressive growth rates are set to continue, with an expected 50% rate to be achieved by 2020.

Have more questions on Ralph Lauren? See the links below:

• How Has Ralph Lauren Performed In Comparison To Its Peers?
• How Has Ralph Lauren’s Sales Breakdown According To Geographic Locations Changed Over The Past Five Years?
• How Will Ralph Lauren’s Retail Division Perform In The Next Five Years?
• How Did Just The Month Of February Make Ralph Lauren One Of The Worst Performing Companies, Amongst Its Peers?
• Why Did We Revise Our Price Estimate Of Ralph Lauren To $102?
• How Will Ralph Lauren’s Revenue And EBITDA Composition Change In The Next 3 Years?
• How Has Ralph Lauren’s Revenue And EBITDA Composition Changed In The Last 5 Years?
• By What Percentage Did Ralph Lauren’s Revenue & EBITDA Grow In The Last 5 Years?
• What Is Ralph Lauren’s Fundamental Value Based On Expected 2016 Results?
• What Is Ralph Lauren’s Revenue And EBITDA Breakdown?
• Ralph Lauren: Year 2015 In Review

Notes: