In regards to Cathy Li’s blog about Burberry going digital, I agree with her analysis of how consumers might view the luxurious brand once it implements its latest business strategy of using technology. The firms CEO, Angela Ahrendts, has dismissed the concern of increasingly high product prices because she believes luxury customers just need to be reached digitally now that they are more tech-savvy. It may be true that new generations of consumers shop online, but in agreement to Cathy, Burberry products are very expensive and a majority of consumers might not make the quick decision to buy the product online without inspection of the product in-store. Luxurious brands have websites featuring their products, but luxury-lovers require further admiration of the product in person before they are willing to break their piggy bank for it. Buying a $1000 item online is significantly different than purchasing a $20 item on eBay because the opportunity cost is much higher thus causing discomfort for customers. Furthermore, the additional uses of technology such as interactive screens in the original Burberry stores changes the historical and extravagant feel of them. By “modernizing” the firm, luxury-lovers may choose to shop at other prestigious brands instead.
Source: http://www.economist.com/node/21563353/comments#comments