It’s difficult to imagine the late Karl Lagerfeld, creative director of Chanel and Fendi, standing in line at a Primark store – and I doubt current Chanel creative director Virginie Viard has ever rifled through its famous discount bin. The deeply stylish French luxury brand couldn’t be more different from the Irish fast-fashion retailer. And yet one of the most luxurious brands in the world and one of the least have one thing in common: both are steadfastly ignoring the e-commerce boom. Today, you can buy Chanel fragrance, cosmetics, skincare and sunglasses online, but if you want to purchase any kind of fashion item you need to go to either a Chanel boutique or an associated department store – and a change in strategy looks unlikely any time soon. This sets the French label apart from similarly priced competitors such as Hermès and Louis Vuitton , which have expanded their online offerings over the course of the coronavirus pandemic. Meanwhile, almost uniquely among low-cost brands, Primark has a website to browse but no e-commerce wing. As a result, the brand is estimated to have lost over £1 billion (US$1.39 billion) in revenue in Britain and Ireland alone over a year of lockdowns, when in-store fashion purchases were banned. Yet Primark’s customer base is still very strong, as evidenced by the enormous queues in front of many of its 153 British stores in April 2021 when non-essential retailers were allowed to reopen. Fashion in 2021: Dior or Chanel, and will Chinese be in Paris? The policy of the two brands is particularly notable in a post-pandemic world where customer behaviour has fundamentally changed. According to consulting firm McKinsey, even those of us who rarely shopped online for clothes before 2020 now make 80 per cent of our fashion purchases at home. Yes, those numbers will decrease once a higher percentage of the global population is double-vaxxed – but a lot of customers have been surprised to discover how easy and convenient online shopping is , and are likely to keep clicking for clothes. “The switch towards digital is here to stay, and right now online is driving all the growth in the fashion sector,” says Anita Balchandani, a partner at McKinsey specialising in luxury fashion. “Customers today start their journey online, so brands that have no e-commerce risk losing them to another competitor, particularly since 40 per cent of fashion is bought online. Yes, the pandemic has been a difficult time to not have a website, but post-pandemic, retaining and acquiring customers will be the main reason to invest in one.” So why, knowing this, has neither Chanel nor Primark shown any interest in launching an online purchasing site? For the latter, it is to do with price and how difficult it is to make a profit delivering low-cost clothing . “You have to remember that behind the scenes, the operational cost of fulfilling online orders is high,” says Balchandani. “This is particularly true in categories where items are low-value – it is very difficult to make an order under £30 stack up when consumer willingness to pay for delivery is low and returns are free.” Luca Solca, a senior research analyst on global luxury goods for research and management company Bernstein, agrees – and adds: “I guess Primark has a small average basket and gigantic volumes, and I think online would produce very high fulfilment costs – hence their choice.” For Chanel, meanwhile, the decision-making process couldn’t be more different. By refusing to participate in the online market, it is putting forward the idea that the brand is not part of the pack, and that it’s not competing for sales – instead, it’s offering something exclusive and rare that the customer has to make an effort to acquire. This is tied to how brands manage accessibility. Scarcity makes items far more desirable – think about how the waiting list for an Hermès Birkin made it the most-wanted bag in fashion, or how Bottega Veneta’s recent social media shutdown boosted sales. By making Chanel customers come in-store, the brand implies their items are rare and to be prized, while fostering a human relationship with shoppers. “In a market like this, you can only hold out this long from having an online offering if you are absolutely certain of your worth and the fact that customers will seek out your goods,” says Balchandani. “ Luxury has been relatively resilient over the last year and had a far faster recovery curve than mid-range brands, so very high-end brands can afford to make this gamble in a way that mid-range brands never could – although I’m not sure for how long.” The idea that aesthetically Primark and Chanel are in any way similar is laughable, but one thing both brands do have in common is that they offer something unique: Chanel because of its iconic branding and its position as arguably the most famous luxury house in the world; Primark because it pioneered ultra-cheap fashion and is one of few brands at that price point that caters to families and older adults. As a result, customers are prepared to leave the house to seek out their goods. Both brands’ determination to stick to this policy has been notable. Primark ignored numerous calls to create an e-commerce site over the last year. And when the Parisian department store Galeries Lafayette was closed during France’s long winter lockdown, it launched live shopping sessions with leading luxury brands including Dior, Prada and Celine. Chanel fashion chose not to participate – although Chanel Beauty did. Chanel has fared far better than Primark over the past year of lockdowns, posting healthy returns in its June results. And yet – according to Solca anyway – it is Chanel that is more likely to crack and develop an online presence first. “I wouldn’t be surprised if Primark stayed as they are, but ??I think Chanel will eventually realise that online is now indispensable for luxury goods brands, and adjust accordingly,” he says. In the end, Chanel provides a luxury service – and in 2021, the most luxurious way of shopping might not be wafting into a boutique on the rue Saint-Honoré, but clicking “buy” from the sofa with a glass of wine in one hand and the television remote in the other.
