Selling luxury goods online: effects of online accessibility and price display

Abstract

Purpose – Luxury goods manufacturers have long been hesitant to adopt the internet as a channel of distribution. A luxury brand’s concept of exclusiveness is seemingly incompatible with the ubiquitous accessibility provided by the mass medium internet. The purpose of this paper is to address the apparent contradiction by examining consumer responses to the online accessibility and price display of luxury goods. Design/methodology/approach – Three studies are presented: first, a qualitative pre-study with luxury industry experts is conducted to identify the current managerial discussion on the online distribution of luxury goods. Second, an experiment with 183 high-income individuals is conducted to test the effects of online accessibility on consumer perceived scarcity and desirability. Third, a second experiment with 142 qualified luxury insiders is conducted to test consumer responses to the online accessibility and price display of luxury goods. Findings – Results indicate that the online accessibility of luxury goods does not affect consumer perceived scarcity and, hence, does not dilute brand desirability. This “no-dilution” finding applies to both high- and low-involvement goods and persists independently of whether or not retail prices are explicitly displayed. Originality/value – Whether or not to sell luxury goods online has been controversially discussed among both marketing scholars and executives. To the authors’ knowledge, the present paper is the first to empirically examine consumer responses to the online accessibility and price display of luxury goods.