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Brief review of digital luxury market in Russia
Wednesday, 28 March 2012 12:08

In anticipation of La Conference Luxe & Digital Bas Godska has shared his opinion regarding digital luxury business. We provide our blog readers with the unique opportunity to dive into the thoughts of the internet marketing guru and gain valuable experience.  

1. Why is digital luxury a lucrative business?

Inventory management: the shopping club business model is very well suited to sell excess stock of luxury products, a product range that is hard to liquidate at basement prices, on public marketplaces, due to dumping and brand restrictions. Disintermediation: the Internet enables the luxury seller to look beyond the costly offline retail distribution channel.

Marketing benefits: reaching the luxury shopper segment is easier, arguably cheaper, better measurable and better globally scalable. Also, luxury brands will need to go where their audience goes --- online. Specifically for Russia, an added benefit for the luxury e-tailer is the better ability to cover Russia's regions.

2. Are there opportunities for new business?

It may sound conservative but the Russian Internet is still a great space for a range of performance based lead generation and conversion improvement tools for luxury items (affiliate marketing dealmakers, cpo focused retargeting technology, real time display ad optimization, data crunching wizards). There will be opportunities left for copycats in the luxury e-tail and digital media sectors; also local "sales simplifyers" showing Russified content from western e-commerce sites and local turnkey e-fulfillment solutions will reach mainstream in the near future.

3. What an investor is looking for in a luxury startup?

As with any startup -  a gifted, experienced team with a strong online idea. Preferably with high agility/mobility and especially, but that's my personal taste, anything innovative in the luxury goods performance based marketing sphere.