The gluttonous orgy that was the e-commerce revolution may have finally come to an end, but that hasn't stopped Eluxury.com from swaggering into the soiree.
As high-profile guests drop like flies from the Web party, France's LVMH (aka Louis Vuitton Moet Hennessey, parent company of such gilded names as TAG Heuer, Celine and Sephora) is boldly moving ahead in the flashiest of frocks. Its latest venture? Convincing the moneyed class to buy luxury goods the new-fashioned way: online.
Don't expect the Parisian luxury purveyor to make a splash -- at least not yet. Eluxury.com launched late last month, but LVMH won't begin marketing it until the fall. Nevertheless, the site now hawks a wide range of designer items with eye-popping price tags. Why the soft launch? Perhaps amid the doom and gloom, LVMH understands that selling $17,000 Bulgari watches, $900 Louis Vuitton pooch carriers or $100 La Perla undies may be seen as a little tactless.
But market faux pas or not, this is no nouveau riche VC experiment. Through Eluxury.com, LVMH plans to aggressively showcase and sell the latest collections of its key brands, including Vuitton, Christian Dior and Givenchy, to name a few.
Parental clout does give Eluxury.com a bit of an edge. Online retailers have traditionally been stuck with last season's leftovers, if only because designers fear that selling their wares on the Web is tacky. Although competitor LuxuryFinder.com now sells over 60 brands, including fine linens by Frette and Brioni menswear, Eluxury should have an advantage because LVMH boasts many of the world's most prestigious brands.
That doesn't mean Eluxury.com has a market. LVMH found out with its investment in the now-defunct Boo.com that selling high-end goods on the Internet takes more than a snazzy business plan. And Eluxury.com plans to sell everything at full retail price, so not only must customers do without a salesperson fawning over them in the dressing room, but they won't even get a price break.
What they do get when they visit are virtual representations of products hidden behind elaborate graphics, along with custom editorial content designed to put them in an expensive frame of mind. Those who go to the travel section, for example, can read an article about renting a castle in Scotland, just in case they had that fancy.
For its part, the shopping experience is pretty mundane. Take this $235 La Perla bra and "Add to Shopping Bag." Fill in quantity and size. Send. Click-click-click. What's not cut and dried, however, is the cost. An experimental shopping excursion came out to $18,644.00 (including $1,419 in taxes and $25 in shipping). Yikes!
Jim Conte, Eluxury's senior vice president of marketing and business development, says the site's typical customer is a "current buyer of luxury goods and services, as well as the aspirational buyer."
Nice customers ... if you can get them.
Neither LuxuryFinder.com, which has been around for nearly a year, or the 2-year-old Ashford.com has earned a penny. And despite rising sales and predictions of profitability at the end of next year, the luxury sector is particularly sensitive to economic downturns.
Then there's that nagging question: Who in the world would buy a $17,000 watch on the Web?
"The luxury market is not about the expense -- it's about feeling good," insists James Finkelstein, the president of LuxuryFinder.com. "I don't think it's an either-or situation. People enjoy going to a shop. They also enjoy shopping on the Web. You can't go to Bond Street or Madison Avenue or Beverly Hills every week anyway."