Digital Opportunities for Online Buying of Luxury Brands in UAE

This presentation explores the digital opportunities and influences for online buying of luxury brands in UAE. It identifies the factors on both general customer and retailer’s luxury brands buying decision in UAE. It also discusses the effectiveness for luxury brand’s successful engagement with digital/online/e-business tools. The presentation includes a literature review, research methodology, analysis and findings, and conclusions and recommendations.

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AGENDA
I. Introduction
II. Research Objectives &
Scope
III.Market overview : U.A.E
IV.Literature Review
V. Research Methodology
VI.Analysis & Findings
VII.Conclusions &
Recommendations
VIII.Research Limitations
IX.Progress on Drafting
Final ReportFinal Group Project on 23rd of November, 2018
869816869816

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I. Introduction
Final Group Project Presentation on 23rd of
November, 2018
Luxury is a culture, a
philosophy and an identity
which requires deep
considerations and
planning before application
of e-business practices.

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II. Research Objectives & Scope
(Executive Summary)
1. •In overall, to explore on digital opportunities or influences for online buying of luxury brands in the U.A.E.
2. •To identify the factors on both general customer and retailer’s luxury brands buying decision in the U.A.E.
3. •To identify, to what extent, internet/online will be able to influence customers behaviour in luxury brands buying decisions in the U.A.E.
4. •To identify on effectiveness for luxury brand’s successful engagement with digital/online/e-business tools
Final Group Project Presentation on 23rd of
November, 2018

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III. Market overview: U.A.E.
Final Group Project Presentation on 23rd of
November, 2018
Source: Euromonitor
* Sales of luxury goods by category: % value growth 2012 ~ 2017*
Online sales platforms adopted by major luxury retailers in
U.A.E. in the last few years
Internet users in U.A.E are growing rapidly and VAT
introduction effective in 2018 January was significant

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IV. 1 Literature Review: Overall
U.A.E. Culture
& Luxury
consumption
Demographics
Cultural
Dynamics
Luxury brands
& the Internet
Website quality
Vendor/
Product
Characteristics
U.A.E.

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IV. 2 Literature Review The U.A.E & Luxury
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Page 8Final Group Project Presentation on 23rd of
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IV. 3 Literature Review: The U.A.E. & e-retail
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Souq.com, Tejari.com, burjmall.com have successfully launched to fit
the needs of online consumers in the U.A.E. online market.

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IV. 4 Literature Review: The U.A.E. & e-retail
Source: Euro monitor and McKinsey
Luxury brands and the Internet: It is essential for luxury brands to
understand the scope and extent of the digital world in order to
create an online luxury experience. And also important to balance
exclusivity with accessibility to profit from internet consumers.

Literature Review
• Luxury is neither a product, an object, a service nor
is it a concept or a lifestyle. It is an identity, a
philosophy and a culture (Okonkwo, 2009).
• Six Criterion of Luxury
• Qualitative hedonistic experience
• Price far exceeds the functional value
• Tied to heritage and culture
• Restricted and controlled distribution
• Accompanied by personalized services
• Represents a social marker
• Associated with a sense of privledge
LUXURY
:

LUXURY FIRMS AND ITS EVIRONMENT:
•Implementation IT in the luxury industry has been particularly slow ((Bjørn-
Andersen and Hansen, 2011; Okonkwo, 2009).
•Internet significantly have helped industries to achieve globalization
•Internet have revolutionized communication and marketing strategies
•Not even the luxury industry was spared from the impact of internet, due to
which they had to adapt to such an emergent technology (Castillan et al.,
2017)
•This have posed a challenge for the management to successfully integrate
the technology to existing operations which have remained largely
unchained through centuries, developing complicated strategies to overcome
them (Okonkwo, 2009).
•Concerns have been raised on whether luxury and internet are compatible
and how luxury goods can survive in a virtual world
•Some authors have proposed that internet is a ‘dilemma’ that needs to be
overcome by the luxury industry.
•Other authors have pointed out that internet can act as a communication
channel for the luxury industries.

Good customer base in vital for a successful business, and incorporating online stores can increase the
customer base and awareness as well as accessibility to the products and services.
However, transferring the feeling of a physical store into a virtual space is a challenge.
This have challenged several luxury businesses as they had to develop integrations with the customers
online and also retain the exclusivity of the brand as well as the aesthetic value of the brand.
Thus the industry constantly struggles to maintain balance between tradition and modernism and also
imroving the experience of the customer.
Developing the image of luxury in the online platform is also another big challenge for several luxury
businesses.

• Developing an online platform which
acts more than a mere online platform
• Developing the luxury value of online
platform
• Developing innovative communication
strategies
• Maintaining the expectations of the
customers and consistency in
performance
• Efficient e-marketing strategies
Strategies to develop
an image of luxury in
an online platform:

Why luxury brands should engage internet and social media marketing:
• Internet has a global reach and pull marketing approach can be used to draw customers to
the information and purchase instead of using advertising (Okonkwo U., Sustaining the Luxury
Brand on the Internet, 2009)
• Customers feels more in charge of their online experiences and have more freedom of choice
(Bjorn-Andersen & Hansen, 2011)
• It helps to incorporate a two way interaction in the form of dialogues and sharing of
experiences between customers (Okonkwo U., Sustaining the Luxury Brand on the Internet,
2009)
• -Customers prefers online experiences that are interactive, memorable and engaging.
Websites that offer several interactions, two way communications and a personalized relation
with the brand are preferred more by the customers (Bjorn-Andersen & Hansen, 2011)
• Internet allows to connect to the customers at a personal and intimate level.
• Authors have pointed that internet is the most powerful marketing tool that can help the
luxury industry to move forward (Okonkwo U., Sustaining the Luxury Brand on the Internet,
2009).

E Marketing:
• E marketing is not fully utilized by most luxury
businesses.
• 40 to 50 percent of the businesses choose not to
sell their products online (Berger, 2012; D'Arpizio,
2013)
• For an industry that is worth 250 million USD, this
is a large gap.
• Impacts of digital marketing on luxury brands:
• Improves customer experiences
• Changes the enterprise
• Can cause disruptions in the future
• By 2020, online sales of luxury items would
double, and by 2025, it would triple.
• Advanced technology can engage customers
through more information and choice.

Internet User
Penetration in UAE
from 2013 to 2019
• Internet penetration
rose from 71% in 2013
to 79.6% in 2018

Advanced technologies have significantly
impacted the reputation of the luxury brands
(Kal and Ko, 2010)
70% of luxury consumers visits social media
pages to get information about various luxury
products and their prices and 49% of these
customers have made purchasing decisions
based on the information on those pages
Companies not involved in online marketing are
losing that opportunity
Factors such as brand value and relationship
with the customer can drive customer equity,
while quality, price and convenience can drive
price equity.

• Factors that influences customers
expectations and perceptions:

Strategies to
improve
customer
experience and
perceptions:
• Rational pricing
• Studying the pricing of competitors to fix
their product prices
• Having parity of prices with other
countries (prices of luxury items in UAE
are almost 40% higher than European
countries which adversely impacted sales
opportunities)
• Using mass media to influence the
purchasing behavior of the consumers

Research Objectives and Questions
Mixed methodology integrating both
quantitative and qualitative data
(Teddlie and Tashakkori, 2011)
Helps to view the problem through
various angles
Using both online and offline statistics
on UAE luxury customers
Collection technique for primary data:
literature review of academic literature
Collection technique for secondary data:
questionnaire of selected relevant
experiences related to the research

Conceptual Framework
Factors considered
for the study:
• Research approach
• Research Design
• Geographic Area
• Description of respondents
• Tools and methods of data collection
• Research variable
• Pilot study
• Statistical technique
• Analysis and data interpretation

Research Design
Qualitative Approach
• Questionnaires
Quantitative Approach
• Interviews
• Survey
• Focus Group
•Strategy used to study the influence of advanced technology on the buying
behavior of the consumers.

Questionnaire
• Semi structured questionnaire
• Will provide both primary and secondary data
• Consists of 10 questions
• Two target groups
– Managers in the luxury industry
– Consumers

• Outcomes of the questionnaires:

Randomly chosen
interviewees
Feedbacks taken from
respondents
Helps to save time compared
to questionnaires
Helps to develop statistical
results
More reliable

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V. 1 Research Methodology - Hypothesis
Final Group Project Presentation on 23rd of
November, 2018
The research aimed to study the hypothesis that advanced technology can help
the growth of luxury industry

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V.2 Research Methodology –
Data Collection & Ethics
Final Group Project Presentation on 23rd of
November, 2018
• Originality of the research
• Willful participation of respondents
• Participants not forced or coerced
Ethical
Considerations:
Small business owners can easily follow ethical considerations
however it can be a challenge for large businesses
• Questionnaires
• Interviews
• Literature review
Data collection
techniques:

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V.3 Research Methodology –
Semi-Structured Interview and Questionnaire
Final Group Project Presentation on 23rd of
November, 2018
Interviews
• Respondents would be
invited to participate in
the interviews
• Randomly chosen
• Feedback taken from the
respindent
Questionnaires
• A list fo questions that
needs to be filled out by
the respondents
• Analyze the
demographics of the
customers

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VI.1 Analysis & Findings
Final Group Project Presentation on 23rd of
November, 2018
How Often Do
you buy luxury
Brands?
• Female between 31 to 40 years-
Once a year
• Females between 41 to 50 years-
Once a year
• Males between 31 to 40 years-
Once a year
• Males between 41 to 50 years-
Once a year
Most Influencing
factors for
online
purchasing by
sex and age:
• Female between 31 to 40 years:
Blogs, social media (instagram and
facebook)
• Female between 41 to 50 years:
Facebook and instagram
• Male between 31 to 40 years: Online
advertisements
• Male between 41 to 50 years:
research and online advertisements
Shopping Style
by age and sex
• Female between 31 to 40 years-
Offline Shopping 2.5
• Female between 41 to 50 years-
Online Shopping: 1
• Male between 31 to 40 years- Offline
Shopping: 2
• Male between 41 to 50 years: 1
• Male above 50 years 1

Page 15Final Group Project Presentation on 23rd of
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VI.2 Analysis & Findings – Interview Results
1. Interview
from Retailers
2. Interview
from general
customers
3.
Questionnaire
s
Reluctance in the
implementation
of advanced
technologies in
marketing
Challenge from
competitors.
Maintaining the
quality of
experience of
the customers
Providing
uniqueness and
exclusiveness to
the product
Online
experience
provides more
choice
Online
shopping also
gives more
freedom to
buyers
Online
shopping is
convenient
Usage of social
media
Usage of blogs’
Usage of social
influencers
Online
Advertisement
s

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VII.1 Conclusions & Recommendations
Final Group Project Presentation on 23rd of
November, 2018
• Using social media platforms for sharing
information regarding the products
• Engaging the customers with details
information that can help them to make
informed decisions thereby influencing their
purchasing habits
• Developing the online experience to
promote the feel of exclusiveness
• Using social influencers and blogs for
promotion
In order to
support better
reach to
customers and
more efficient and
effective
marketing of
luxury goods, the
luxury industry
can follow the
following
recommendations
:

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VIII. Research Limitations
Time constraints
Lack of adequate studies on the subject especially in the context of UAE
Financial Constraints in the study
• Using the questionnaire and interviews a significant idea
can be developed on the topic
• Studies in other countries can be used as a model to be
followed in UAE
• Using interviews and questionnaires can help to collect
both primary and secondary data which can be analyzed
However
:
Final Group Project Presentation on 23rd of
November, 2018

Page 20
IX. Progress on Drafting Final Report
Structure of Final Report Agreed
Part II: Draft of Literature
Review
Part III: Draft of
Methodology and Data
Part I: Draft of Introduction
Part IV: Draft of Analysis
Part V: Conclusions
Ready
Ready
Ready
Not yet
Ready
Ready
Final Group Project Presentation on 23rd of
November, 2018

Team Member Responsible
June
Task / Week Number 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Project Proposal Submission Mohammed/Fadi/Adarsh/Hadi
Discussion & Feedback from Supervisor Hadi/Adarsh/Fadi/Kim
Draft Literature Review - Background Mohammed/Fadi
Finalize Objectives Mohammed/Fadi/Hadi
Draft Research Strategy & Method Hadi/Mohammed/Fadi
Literature Review Mohammed/Adarsh
Ethical Concerns Hadi/Kim
Project Plan & Breakup of Tasks Adarsh/Mohammed
Detailed Project Brief - A1 Submission Mohammed/Fadi/Hadi/Adarsh
Devise Research Approach Hadi/Mohammed/Fadi
Develop Questionnaire Adarsh/Kim
Pilot Test Questionnaire & Revise Team
Devise Interview process Adarsh/Fadi
Interim Report - A2 submission Team
Administer Questionnaire Team
Conduct Interviews Team
Draft Survey Hadi/Mohammed
Conduct Survey Team
Data input & Processing Fadi/Kim
Data Analysis Adarsh/Fadi
Draft findings Mohammed/Adarsh
Update Literature Review Kim
Final Presentation - A3 Team
Revise draft & format for final Submission Mohammed/Adarsh
Final Report - A4 Submission Team
July
1. Submit Assignment A1 - Detailed Project Brief: July 30
2. Submit Assignment A2 - Interim Report : September 10
3. Final Presentation A3: Week 5 Nov - 9 Nov 2018
4. Final Report A4: 17 December 2018
Key Dates:
August
September
October
November
December

Page 21
X. References 1
Final Group Project Presentation on 23rd of
November, 2018
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• KPMG (2017), The truth about online consumers, Retrieved from
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• Bjorn-Andersen, N., & Hansen, R. (2011). The Adoption of Web 2.0 by Luxury Fashion Brands. Copenhagen: Copenhagen Business School.
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X. References 2
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• Lalić, A.B. and Pope, J.A., 2018. Introduction and Research Methodology. In Business and Society (pp. 1-9). Springer, Cham.
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THANK YOU !
Q & A
Final Group Project Presentation on 23rd of
November, 2018