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For those with the money and the inclination, the web today offers a sumptuous array of high-end goodies. Seeking scarves? US e-tailer Ashford.com offers a $295 (£195) Meg Cohen paisley over-the-shoulder throw. Or if your taste runs to glittery trinkets, Mondera.com sells a pearl and diamond ring of 18-carat white gold for $9,000 (£5,940). And for the Sherlock Holmes fan on your list, retail portal Luxuryfinder.com had a first edition Hound of the Baskervilles up for grabs in May for a mere $3,100 (£2,046).

It's not just high-end online retailers that hope to attract big spenders.

Some luxury brands are getting their hands dirty in e-commerce. Tiffany.com offers an impressive range online, as does Dior.com. The French luxury goods group Louis Vuitton Moet Hennessy (LVMH) has said it will soon go live with eLuxury.com, a multi-brand site offering products from LVMH's array of holdings - names such as Moet & Chandon, Givenchy and Louis Vuitton.

Does all this mean that luxury retail has come into its own on the web?

Not necessarily. City analysts say the market is far from proven. By their very nature, luxury goods present a range of inherent marketing challenges online, and even long-established firms admit they are still groping their way.

On the plus side, the numbers suggest the internet may be a natural fit for retailers whose consumer base rests solidly in the upper middle class.

According to US research firm USAData, people become more apt to buy online as they move up the income scale. On the minus side are the amorphous "image" issues, starting with price. In the busiest ventures - the bookstores, music shops and other commodities vendors - consumers have come to rely on the web as the place to find what they are looking for at the lowest possible price. In the luxury arena, however, it's more complicated.

"When you are dealing with luxury goods, a lot less of the competitive spirit is based on price, and a lot more is based on selection and having the right brands available," says Jim Kenney, president and chief executive of Sephora.com, a multi-brand beauty products site that went live in October 1999. "You have to find other ways to bring people in, other than discounts."

In the case of Sephora.com, this means "highlighting the brands that we carry and the products that we carry," says Kenney. "The key message is that Sephora.com is really the only place you need to go for your beauty needs online."

The creators of jewellery site Mondera (www.mondera.com) circumvent the price question by offering items not available elsewhere. "Our buyers search the world for new and interesting items, things you can't necessarily find in every jewellery store," says Jill Volmer, Mondera's vice-president of brand marketing.

Assuming the general public can be dissuaded from its belief that the web is merely a place to buy stuff on the cheap, a world of marketing possibilities opens up, according to Philip Warner, president of Asprey & Garrard's US operation. "In the past, the selling of high-end goods has been about expertise, part of which is knowledge, and one can of course communicate a huge amount of information over the web, probably more than any salesperson could ever put across," he points out.

Such inherent advantages notwithstanding, analysts and even some luxury vendors agree the web still may be a high hurdle for top-notch brands to clear. On a very basic level, it is still unclear how many people would be willing to part with big money for an item they have not actually held in their hands. "If you are going to buy an engagement ring and you are prepared to spend $10,000, there is a little bit of a difficulty in just saying, 'All right, here are my specifications'," says Yobie Benjamin, chief of strategy for consultancy Ernst & Young in San Francisco. "You can describe a diamond by carat, colour, clarity and cut - but that does not mean you can just start clicking on things looking for the highest quality on all counts."

Another problem has to do with consistency. The web is different from the real world - it's more fluid, more readily accessible to a broader array of people than a Bond Street boutique. When you e put a luxury brand in this environment, "the marketing of the site has to be consistent with the brand image", says Scott Nelson, a vice president and research director with the Gartner Group.

A luxury brand must uphold its image, not just in its advertising, but also at its own web site. "The brand has got to be utterly consistent between the physical world and the virtual world. Neimanmarcus.com needs to feel like Neiman Marcus, just as the book and the catalogue and the stores all need to exude Neiman Marcus," says Miki Tsusaka, a partner in the New York office of the Boston Consulting Group.

This holds especially true, she suggested, at the luxury portals and aggregator sites. With diverse brands sharing a single venue, it is easy to muddle the messages.

This fact has not escaped James Finkelstein, president of LuxuryFinder.com.

Finkelstein is excruciatingly aware of the need to uphold the good name of his manufacturers in the relatively uncharted territory of online luxury.

To do this, he says, it is necessary to create not just a storefront, but a lifestyle context.

"Look, anybody can put up a store on the web. 'Here is what we have got.' It's rather dull," he says. "At LuxuryFinder.com, on the other hand, you are walking into an entire world of luxury."

When visitors first enter the site, a porter in livery slides open a pair of heavy oak elevator doors, the kind you might have found in an upmarket department store of yesteryear. "One of the important things for our site is not to look like a typical tacky site," says Finkelstein.

"The atmosphere has to be like you are walking into the first floor of a great department store."

All this still leaves unaccounted for that final special something that typifies the luxury retail experience. Tsusaka calls it "the cup of tea in the dressing room". It's the feeling that, in exchange for living in this high-priced world where only the best will do, a well-heeled consumer can reasonably expect to be pampered within an inch of their life by solicitous staff.

While some luxury retailers say they can do this online, others believe that the online milieu affords them the opportunity to reach out to consumers who perhaps don't want that much attention. The latter holds true at Mondera.

"For many people it seems 'service' in luxury means 'fast,' because their most e precious commodity is time. Instead of visiting a bunch of stores where maybe you are coddled and they give you a glass of wine, we give you the opportunity to do this on your own time, quickly and easily. It's a different take on service," says Vollmer.

At luxury aggregator site Ashford.com, service has a more traditional definition. It means going the extra mile to make the customer happy.

The company doesn't tell shoppers that their orders typically will ship the day they are placed, which means that, when those shoppers get an email two hours after visiting the site telling them that their products are already on the way, "people are just blown away," says Mary Lou Kelley, vice president of marketing for the site.

All of this looks good on paper, but some key luxury players still have their doubts. Asprey & Garrard, for instance, has its own site that is largely about image building, and also sells products through LuxuryFinder.com.

Yet the company's Philip Warner is unconvinced that e-anything is the way to go for his company.

"We are undecided at the moment as to where we are going with internet sales," he says. "We are over 200 years old, and one can easily damage one's reputation by doing the wrong thing - particularly on the internet, where there is such a wide audience. We know that this is going to be a profitable piece of the jigsaw, but there are few people who have got there yet. We have yet to discover how it is going to really work as a business model."

In the near future, the direction of e-luxury may turn on the fate of the site with that very name. LVMH's entry into the field will be watched closely, and its success or failure could determine the course of the entire online luxury sector. l



CASE STUDY - A SAFE PAIR OF HANDS

Sephora.com went live last autumn as a single-source web site for upmarket beauty products. President and chief executive Jim Kenney believes that the site's chief draws are selection and certainty.

On the first count, Kenney prides himself on making available a vast array of products, something his target market of affluent, 25 to 45-year-old women appreciate.

"Availability is not something that can be taken all that lightly," he says. "Many of these brands are very selective about whom they distribute to. They are very careful about how they select their distribution channels."

On the second point - certainty, or reliability - Kenney waxes enthusiastic.

"When you are buying a book, it has an author's name on it. It doesn't matter if it is 'real' or bootlegged or what have you," he says. "When you are buying a luxury product, it is a big deal to make sure you are getting the actual product from the actual manufacturer." He adds: "In our space there are a lot of sites that sell product, but don't have a legitimate relationship with the brands. There is a whole sense of authenticity that is very important to our customers. When somebody is looking to purchase a high-end fragrance, they want to know it is really what they are getting."

To get the word out, Kenney has employed a mix of online and offline marketing. He has run ad campaigns on TV and radio and, most recently, in the major spring fashion books.

Overall, Kenney suggested that his clientele have shown a willingness to take their high-end shopping online, driven largely by the easy accessibility of products.

"There is a convenience offered online that you can't find in bricks and mortar," he says. "And people respond to that very, very well."



CASE STUDY - ASHFORD.COM GOES WHERE THE SHOPPERS ARE

Launched as NewWatch.com in April 1998, luxury portal Ashford.com emerged in its present form in May 1999. Vice president of marketing Mary Lou Kelley won't give out visitor numbers or gross revenues, but disclosed that the average order at the site is $500 (£330), with the average gross margin approaching $100 (£66).

"We have very dense, valuable items, so we are getting a lot more gross margin value per order," she says.

Her first rule is to go where the shoppers are, not just where the rich people are. "If you are a high-income person checking your stocks online, that does not mean that you are ready to buy a watch," she says.

Ashford.com targets its online media at places where people go who are seriously in the market. Like other luxury sites, Ashford.com pushes variety as a major draw. "We are not confined by four walls, so we will have a better selection," says Kelley.

The site stresses not just selection, but also service, which Kelley describes as a key component differentiating luxury items from stuff that is merely expensive.

The Ashford.com home page displays the Bizrate logo (message: trust us); the return policy is gracious; customer service is always on call. Part of winning trust, Kelley says, "means making sure that everything is working perfectly, all the time". She even views the chief luxury sector pitfall as a potential advantage. "Only a very small percentage of consumers are even looking for luxury goods," she says, "but that only means we don't have to be everything to everyone."



SUPERIOR SERVICE IS VITAL TO WEB SITES SELLING LUXURY ITEMS

In the real world, luxury retailers pride themselves on service.

The doorman's smile, the friendly sales staff: these are the flourishes that make luxury retail luxurious.

In my experience, these retailers have some distance to go in bringing to life their real-world standards of excellence in the online realm.

At the time I was working on this story, I also was shopping for a diamond ring to mark a 10th wedding anniversary. I found something I liked at jewellery site Miadora.com, but had two questions, one about sizing and the other about returns. I emailed customer service, got back an answer to just the first question, wrote again, and never heard anything more.

A brighter spot on the service landscape is beauty products site Sephora.com.

I wrote to the company asking for help in identifying the maker of a perfume my wife bought some years ago. The rep who responded told me not only who makes the stuff, but where I might go to find it, since the Sephora site does not carry it.

When I wrote back to say thanks, I got a note that read in part as follows:

"It is not only our job, but our pleasure to make the process of buying from Sephora.com as smooth as possible. Your expression of thanks helps to reassure us that we are doing a good job, and to us that makes it all worthwhile."

And that, dear friends, is what luxury is all about.



CASE STUDY - MONDERA BRINGS EMOTION TO THE TRANSACTION

Jill Vollmer, vice-president of brand marketing at jewellery site Mondera (www.mondera. com), says she is tired of looking at web site advertising that is simply more of the same.

"We have seen so much bad dotcom advertising - ads where you cannot tell what the benefit is or what the emotional connection is. It's all about price or the freedom to shop naked, but those are inherent internet benefits. How does that set you apart from the competition?" she says.

Since going live in August 1999, Mondera has drawn 10,000 to 12,000 unique visitors a day, and the 0.5 to one per cent of those who do make purchases typically spend around $1,100 (£690) per purchase, Vollmer says.

Partnerships have been a key component in Vollmer's marketing strategy.

America Online features Mondera in its diamond guide, and the site is an anchor on Yahoo!'s jewellery and watches shopping page.

To help build consumer confidence, the Mondera site tells the story of its founders. The Mouawad family has a long history in the jewel trade in Europe and Asia. "That gives people confidence," says Vollmer. "This is not some fly-by-night dotcom."

Mondera's marketing approach is to go for the heart and ignore the cheque book. "With luxury marketing it has to be a bit more emotional, a bit more aspirational. It's not just about giving the best price," says Vollmer.

"When you buy a luxury product, it is not just about the product, it is about the feeling you get in buying and wearing it. Everything we do has to reflect that."