Russia: A Potential Goldmine for Luxury Fashion Retail

Businesswomen cut the ribbon at the 'Vogue's Fashion Night Out' event, promoting luxury sales in St Petersburg.

The Russian Luxury Market is now valued at 3.5 billion euro exposing its potential in sales to fashion brands worldwide.

After an ascending growth of 5 percent compared to 2015, Russian luxury market now represents 1.4 percent of sales in an international scale. However experts see such market as vastly underdeveloped and with huge potential for growth for the international luxury brands.

Contactlab CEO Massimo Fubin sees value in Russian elite consumers stating that “Russian luxury consumers spend on average 60 per cent more than their global counterparts” but also sees a lack of engagement with local consumers as an “untapped market for many brands, with a great number of Russian consumers unreached at the current time.”

Fubin committed a report backed by investment company Exane BNP Paribas called Luxury in Russia: The Comeback and there seems to be a lack of penetration in Russia, reduced to only 2.5 percent compared to the global average of 7 percent. “We were surprised at how some companies have not put together complementary newsletters, local content and URLs.”

Only four brands currently offer phone and email assistance in Russian with rivals Chanel, Gucci, Hermès and Prada conspicuous in their lack of localized service.

Nineteen luxury brands offer their sites in Russian language, but the content is not properly localized in most of the cases, and some, as  Valentino, Hermès, Chanel, Prada and Zegna still rely on international versions that deny tailored content for the consumers at local level.

Luxury shoppers attend Vogue’s Fashion Night Out in St Petersburg

Brands such as Burberry, Louis Vuitton and Loro Piana has had success in part by reaching the Russian consumer thanks to their strong participation with digital customers. The report shows how, surprisingly, Dolce & Gabbana, Burberry and Swatch are the only international brands who engage Russian customers on social media platforms such as Twitter and social networking service popular in Russia, VK.

Armani, exceptional as always, leads the way with localized content that according to Rubin, “really speaks to the local market.” The brands that performed the best where those that had access to localized Russian websites, a larger product selection and Russian language mobile apps.

Despite a difficult 2015 Russian luxury retail sales are staging a comeback, clearly opportunity knocks, and Russians may not have to wait long for a virtual answer.

Sourcehttps://insideretail.asia/2016/12/16/russian-luxury-retail-sales-recovering/

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