The Evolution of Luxury E-Commerce: Winning Strategies for 2025.
This article was originally written by Demi Karanikolaou in Greek for Harper’s Bazaar Greece. You can find it here.
Luxury fashion e-commerce has been a complex offering since its very inception. When Natalie Massenet founded Net-a-Porter from her kitchen in 2000, the idea of buying ultra-expensive fashion on the internet seemed utterly futuristic. Fast forward fifteen years and many were talking about the future of fashion being almost exclusively online. While it is undeniable that online luxury fashion sales will keep growing, 2024 has been challenging for many fashion retailers, especially for those who operate primarily online.
The Problems: A Market in Need of Refinement
Luxury fashion e-commerce is at a crossroads, facing both immense opportunities and glaring challenges. The year 2025 is projected to be anything but easy for luxury e-commerce.
Many of the sector's prominent players have notoriously been struggling for years and have proved to be sluggish, when it comes to implementing changes or using Artificial Intelligence to analyze the vast amounts of consumer data they have available, in order to identify trends and consumer sentiment that could help them improve their business. In their quest for profitability and growth, some of those multibrand retailers ended up with a poor assortment of mismatched products and little to no curation. And in a world of savvy consumers, who can see past marketing tactics and identify business inefficiencies, overproduction and confusion, 2024 brought big changes to some businesses. Most notably, of course, MatchesFashion declared bankruptcy. However, success stories such as that of Mytheresa illustrate that luxury e-commerce can have a glowing future, based on strategic innovation and authenticity and a thorough analysis of current significant trends and diverging strategies. So, how can we prepare for 2025?
A Path Forward: Key Strategies for 2025
2025 is shaping up to be a year where Luxury E-Commerce will pivot towards integration, sustainability, and authentic customer engagement in luxury e-commerce. Most of the change will have to happen around rethinking the product offering itself, the marketing that supports it and finding new ways to leverage technology. Some trends are already solidifying: "We’re seeing a growing demand for exclusivity and storytelling in luxury e-commerce. Personalisation is equally important. Customers are drawn to items that feel one-of-a-kind, whether through limited runs, collaborations, or heritage-rich products. For example, one of our standout successes has been the launch of our online-exclusive Liberty Fabrics edits.” shared exclusively to us Phil Hamlen, the Omni-Marketing Retail Director of storied London department store Liberty London.
The quest to rethink the entire product assortment per platform is no easy task. However, if 2024 taught us something, it is that the future of luxury fashion e-commerce demands an intricately curated multi-brand product assortment for each platform. In order to avoid heavy discounting, this should be based on customer data and feedback, such as the need for sustainable brands or the selling volumes of certain types of products. Even better, offering exclusive collections and limited edition products, offers a high level of exclusivity that can boost the allure of luxury. In a world of many multibrand retailers, another trend seems to be consolidation. Mytheresa’s prominent acquisition of Yoox Net-a-Porter, underscores the rise of digital powerhouses offering distinct yet complementary luxury edits. According to their CEO MyTheresa, Net-a-Porter and MR Porter will offer differentiated but complementary multi-brand luxury edits based on curation, inspiration and utmost customer service, using shared infrastructure and technology to achieve growth and profitability. We can expect this trend to continue with more future consolidations (e.g., Farfetch, which is currently part of the Coupang group), that will create multi retailing super powers. And just like each maison of LVMH or Kering, each retailer will also have their own unique product curation, style and target audience.
Marketing, promotion and storytelling will also undergo a major shift at a big scale. Rethinking promotion in luxury fashion e-commerce requires innovative approaches that blend digital and physical experiences to build loyalty and foster deeper connections. VIP events, trunk shows, exclusive collaborations, and limited capsule collections resonate strongly with affluent consumers, creating personalized and memorable interactions. Maintaining brand DNA and promoting community-driven content across channels is also equally crucial, as consistent storytelling creates a universe that gives customers reasons to buy from a specific retailer. This might be the editorial point of view, incredible campaigns, membership initiatives, innovative try-ons or simply impeccable customer experience.
2025 will also force a shift towards unified commerce. According to the CEO of a leading luxury jewellery brand, who asked not to be identified: “If we can see that you made a significant purchase online, we will call you on your phone to establish a relationship and keep on nurturing it from then on”. Indeed, luxury fashion e-commerce is shifting to unified commerce, seamlessly integrating online and offline operations to enhance customer experiences. Liberty London’s Phil Hamlen seems to agree: “Hybrid retail experiences are definitely another trend on the rise - our Fragrance Lounge, for example, has been hugely successful in-store, and we’ve adapted its concept online by offering virtual Fragrance Concierge edits from our in-store fragrance experts. This has allowed us to maintain a connection with our customers who might not be able to visit the store, while still offering that signature Liberty experience."
On the Technology Front
On the technology front, data seems to be at the center of everything - with first-party data enabling multi-brand luxury retailers to refine strategies, understand client preferences and deliver personalized offers, thus reducing the need for heavy discounting and losses. Lastly, AI is progressively moving to the heart of every future proof strategy, helping with everything: from merchandising and product curation, to customer experience and relationship management. Its ability to enhance personalisation will drive both customer engagement and operational efficiency, positioning luxury brands for sustained success in a competitive market.
Physical versus Digital? Not in 2025.
While clearly there are many opportunities on the horizon, some skeptics are still comparing E-Commerce to Brick-and-Mortar, which tends to offer a more holistic shopping experience. How do the big players plan to approach this issue? “ At Liberty, our e-commerce strategy is built on translating the magic of our iconic store into the digital space. The Liberty experience is about discovery, storytelling, and connection, and we’ve worked hard to ensure that both our online and in-store experiences reflect these values in their own way”. An example? “In-store, there’s a sensory element - the smell of our fragrances, the feel of our fabrics, the one-on-one relationships with our team. Online, we replicate this through content-rich storytelling, curated edits, and virtual consultations that bring our expertise to customers no matter where they are. Each channel has its own strengths, and together they form a seamless journey for our customers." explains Liberty London’s Phil Hamlen.
Luxury e-commerce is no longer about mimicking physical stores; it's about defining a distinct digital identity. Those who will win the biggest share of business in 2025 will prioritize quality, sustainability, and innovation to foster loyalty and navigate the shifting landscape. The formula isn’t new—it’s about refining what already works while embracing technology to meet modern expectations. And as some of the shining stars of the industry have already shown, success lies in staying authentic, adaptive, and focused on your clients.
