The concept of selling top ticket-price jewelry items to virtual customers would seem negate the standard operating philosophy of most leading jewelry brands, which traditionally have invested millions of dollars in the establishment of stylish salons in many of the world’s leading consumer centers.
But, write Business of Fashion, with the high-end watch and jewelry category expanding at considerably lower rate than the overall luxury industry, brands are moving more aggressively to meet their customers online.
E-commerce currently accounts for about 10 percent of the ng global luxury goods market. It is expected to rise to 20 to 25 per cent by 2029.
CARTIER TAKES THE PLUNGE ONLINE
Speaking to Business of Fashion Sarah Willersdorf, a partner and managing director at Boston Consulting Group, said that some 35 percent of investment being made in the jewelry industry between 2013 and 2017 was pumped into omnichannel retailers, most of which were e-commerce-based. This included the Richemont, whose largest source of revenue is jewelry, and among whose brands are Cartier, Van Cleef & Arpels, IWC Schaffhausen, Jaeger-LeCoultre, Officine Panerai, Piaget, Montblanc and Dunhill.
In 2017, Cartier relaunched launched its revamped iconic Panthère watch through a pop-up store on Net-a-Porter, with prices ranging from $4,000 to $160,000.
The jewelry section on the Net-a-Porter website, widely recognized as the pioneer in online luxury sales.
One of Debmarine’s specialized mining vessels, which uses giant vacuum pipes to suck up diamond-rich sediment from the seabed.
The exercise was a notable success, and this encouraged the luxury retailer to establish a permanent online presence. Cartier today offers jewelry items online with a value up to items up to $370,000.
Significantly, Cartier says that online trading is not cannibalizing its brick and mortar sales, but rather bringing in customers that may have spent their money on other luxury products.Today, according to Namibia’s Chamber of Mines, close to 75 percent of the country’s total diamond production is from the seabed, or around 1.4 million carats per annum. Up to 95 percent of the material is considered gem quality.
THE PIONEER OF ONLINE LUXURY MARKETING
The company that was the true pioneer in online luxury sales is Net-a-Porter, which was hounded less than 20 years ago by Natalie Massenet an American-born former fashion journalist. She developed the concept of a web-based magazine where users could click to buy. Managing to raise about $2 million start-up costs, she launched the company from her flat in Chelsea, London, in 2000.
In 2010, Massenet sold a majority stake in Net-a-Porter to Richemont for 25 times the initial investment, and the time it was valued at $533 million. By 2013 it was retailing products from more than 350 designers, attracted more than two million monthly visitors to the site and an average spend of $850.
In 2015 it merged with Italy’s YOOX Group. The new YOOX Net-A-Porter Group, which was operating in 180 countries, was considered to be world’s largest online luxury conglomerate. It was a fact not lost on Richemont, which last year spent about $3 billion to obtain a 95 percent share in the company.
With one of the world’s premier jewelry brand operators now fully in charge, the online fashion giant is like to focus more on the underachieving luxury category.
“There is an element of ease and convenience to being able to browse online, without having to step into a store and inquire about pricing each time there’s an interest in a piece,” said Elizabeth von der Goltz, global buying director at Net-a-Porter, speaking to Business of Fashion. “Entering a jewelry boutique or flagship store can be intimidating, especially for newer customers. Being able to shop a similar selection online provides a sense of freedom to browse and take one’s time.”