CNBC-  Krystina Gustafson | @KrystinaGustafs 

Luxury retailers are having another rough year, as value-conscious consumers balk at the idea of shelling out big bucks for the latest designer goods. Yet as the high-end market struggles to eke out revenue growth, there's one area where sales are flourishing: The web.

Following years of arguments that shoppers would not be willing to purchase a $4,000 handbag online, research published by Walker Sands Thursday has found that 27 percent of consumers purchased a luxury item on the web in the past year. That's up 17 percentage points from just last year, and represents a 21-point gain over 2014.

The trend is skewed toward millennial shoppers between the ages of 18 and 25, though older shoppers are also adopting the habit. According to Walker Sands, one-third of millennials bought a luxury item online over the past year, compared with 6 percent for those ages 61 and older.

The digital marketing agency said its findings, which were based on an online survey of more than 1,400 U.S. consumers, line up with industry predictions that digital luxury goods sales will triple to around $80 billion by 2025.

The report also comes as several recent studies have disagreed over whether online sales are positioned for a second wave of growth or are about to plateau.

"While luxury commerce has had a slow start in the online space, more than four times as many consumers made luxury purchases online in the past year compared to two years ago," Walker Sands' report said. "With estimates that online sales could make up to 40 percent of luxury sales by 2020, the luxury industry is seeing much larger growth than many other areas of e-commerce."

Much of luxury retail's online growth can be pegged to an increase in spending at Amazon or other third-party retail sites. According to Walker Sands, 22 percent of shoppers said they purchased a luxury good on one of those players over the past year, up from 5 percent in 2015. That compares to 10 percent of shoppers making a purchase on a brand's website, up just 3 points from last year.

Some of this discrepancy can be explained by the fact that many luxury retailers were late to the game — for example, shoppers still can't make purchases through Chanel's official website. Yet Amazon has also zeroed in on fashion as an opportunity for growth.

"One of the biggest drivers of online luxury sales for third-party websites likely has to do with the general rise of Amazon and the comfort of consumers spending large amounts of money online — which also increases with free shipping," Walker Sands' Erin Jordan, who worked on the report, told CNBC.

According to the firm's research, 98 percent of people reported having made a purchase on Amazon in the past year. Yet Jordan said there are opportunities for brands to catch up, as more shoppers said they are open to making a luxury purchase on a label's own website than through Amazon or another third party.

Luxury retailers also stand to gain by adopting virtual reality, as more luxury buyers said they're more interested in using the technology for online shopping than the average consumer, Walker Sands said.

Even as more shoppers head to the web for luxury goods, the majority of sales still take place in stores. According to Walker Sands, the majority of shoppers prefer to make purchases at physical stores in every category except books, consumer electronics and office supplies and grocery.

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The Indian luxury market is expected to cross that amount during this year.

According to a research report by Euromonitor, India merely contributes 1-2% to the global luxury trade. However, despite this insignificant percentage, the market is growing at a compounded annual growth rate (CAGR) of about 25%. Indian luxury market is expected to cross $18.3 billion by 2016 from the current $14.7 billion.

As per a study by Assocham , in 2015, luxury jewellery, electronics, SUV cars and fine dining have grown immensely. Apparel, accessories, wines and spirits are growing as strongly as in the past. Consumption of branded wine is also likely to register a over 30% increase in the metro cities.

Indian brands are starting to be well-known, with Gitanjali Group (jewellery retailers), Titan Company (5^th largest manufacturer of wrist watch in the world) and PC Jeweller Limited (jewellery retailers) now accessing the top 50 luxury brands worldwide.

Finally, it is to be noted that cosmetics and beauty products markets are highly lucrative in India, since women’s purchasing power is greater.

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IMAGE : Olivier Rousteing - Directeur artistique Balmain

SOURCE: FORBES - GREG PETRO - MAY, 06, 2016

If you’re in tune with what’s going on in the world of tech startups, you’ve likely heard the phrase “growth hacking.” The phrase, coined in 2012 by Silicon Valley veteran Sean Ellis, refers to a way of marketing a business or product that attracts a massive following of fans and customers without spending a fortune on traditional marketing strategies.

When the phrase first started gaining traction among tech marketers, growth hacking was generally seen as something that software or e-commerce companies did. As we’ll see, growth hackers are very scientific in the way they approach marketing. They only care about growth that is measurable and provides useful data.

Today, luxury fashion companies like Balmain and Spring are adopting some core growth hacking strategies to give them an edge. Seasoned investors know the luxury market can be fickle, but looking for companies that are on the cutting edge of digital marketing could be a great way to separate the winners from the rest of the pack.

The keys to growth hacking

Before we get into specific examples, it’s useful to know some of the core concepts of growth hacking. Naturally, each company’s product/service is different, so specific tactics that work for one business may be useless to another. Regardless, growth hacking has brought some key points into focus for marketers in all industries today. Here are a few of the most important:

[1]- Product/market fit. The traditional means of product development is to spend months or years developing an offering behind closed doors, then launching it with one big push. The problem is these launches end up losing the company money because, while the product was spending a year or so in development, the market may have moved on. Growth hackers, on the other hand, start with a minimum viable product and get it out to potential customers as soon as possible. This allows them to see if there is a market for it, and early adopters can provide useful feedback about features that can be included with future iterations.

[2]- Eschew traditional marketing. Growth hackers don’t go for TV commercials, billboards and other mass marketing channels because they are extremely expensive and they don’t allow for precise measurement of results. Growth hackers widen the definition of marketing to include things like PR stunts, shows and anything else that gets a lot of attention on social and legacy media without costing a fortune.

[3]- Data is king. To that end, these low-cost campaigns must stand the test of social graphs, SEO rankings, A/B testing and other data-based metrics – these are the tools of the growth hacker.

Now we’ll look at how two well-known luxury fashion companies are applying these principles.

Balmain combines product/market fit with savvy social marketing

According to a profile in GQ, Balmain’s creative director Olivier Rousteing knew that the products he helped design for Balmain had a unique look that would catch on with luxury-seeking consumers. main combines product/market fit with savvy social marketing

But he was also keenly aware that in the world of fashion, if you don’t have a relationship with your fans that gives you prime visibility, people will move on to the next thing.

Rousteing made a gamble in 2012 that Instagram would become a key social channel, and that bet paid off. He started taking ridiculous pictures of himself while wearing the clothes he designed, and his gregariousness boosted his profile significantly, with Balmain’s rising in step.

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The number of African millionaires might be higher by 2024, numbering around 258,000 millionaires, which equates to a rise of 53%. Africa is still largely underestimated and is slowly gaining ground on that market: 80% of luxury monobrand stores are operating in Morocco and South Africa.

Also, KPMG states that the ultra-wealthy individuals are mostly going to South Africa (Cape Town and Johannesburg) or to Morocco in Marrakech – which is attracting luxury hotel investors, as noted by CPP Luxury – and Casablanca.

Luxury goods for men, such as men’s clothing, watches, accessories, jewellery, etc., play a major role as they still have a higher income than women and are popular amongst wealthy men of power.

Source: Bloomberg - KPMG - CPP Luxury

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