Digital Trends and Growth Opportunities for Luxury Brands
The pandemic has led to an increase in the proportion of luxury items purchased online rather than in physical retail stores, according to a report on the personal luxury goods sector released at the Altagamma Digital Awards.
Stefania Lazzaroni, managing director of Altagamma, which represents brands in Italy's high-end cultural and creative industries, said the pandemic has led to an acceleration in online sales of personal luxury goods, which reached 23 percent of total sales in 2020.
"Digital is moving from a sales and communication channel to an environment in which today's younger consumers can have an immersive experience with the brand," she said.
The "Digital in the Post-Covid Era" study highlighted how the pandemic accelerated online sales in the luxury goods sector:
One in four consumers purchased online for the first time
Three out of four said the shopping experience was positive
It predicts that online sales penetration will increase by more than 20 percent in the next two years and that consumers will become more demanding.
To achieve this, brands will need to adopt particularly flexible strategies and bring "extreme attention to data collection and systematization," but also have "a marketing model that is faster in its execution, extreme personalization of the offer and communication, and an increasing attention to authenticity of speech."
Contactlab's research for this report suggests a strong acceleration in the online presence of all brands, particularly via the development of tools to facilitate online shopping. And there is an increase in the use of augmented reality to compensate for customers' inability to leave their homes, with virtual store tours and 3D visualization of purchased products and their packaging.
"The luxury sector has been extremely responsive in its response to the COVID-19 crisis, accelerating its online presence across all direct and indirect channels and developing effective tools to make it easier to choose and purchase goods online," said Marco Pozzi, senior consultant at Contactlab and author of the report.
According to Business of Fashion, online luxury shopping has taken off among the wealthiest. Auction house Christie's saw a 200 percent increase in online sales in November and December, according to Caroline Ervin, e-commerce development manager for Christie's jewelry department. Last year, four online sales were conducted during those two months, with a high estimate of about $9.5 million. This year, the number of online sales will rise to 12, with a total estimate of nearly $40 million.
Sotheby's also says it has already seen its online sales quadruple from 2019 and quintuple its total, which currently stands at $150.5 million. Jewelry accounted for $79.7 million of those sales - up 900 percent from 2019 - and watches for $41.95 million, a 500 percent increase from last year, the auction house said.