Where fashion has trailblazed, fine jewelry is now following, as major players including LVMH, Richemont and Farfetch invest heavily in creating dedicated spaces for jewels on their websites. Are these freshly minted portals just marketing spin and posturing, or will this flurry of online activity usher in a new digital era for luxury?
It has been a slow pull, but most jewelry houses now operate some level of transactional website. Indeed, such sites last year accounted for 31% of total online luxury sales, which were up 24% globally compared with 2016 for an overall market share of 9%. That’s according to the latest Bain Luxury Study by retail consultant Bain & Company, which has also marked hard luxury (watches and jewelry) as a category on the rise.
Yet multi-brand retailers still control the majority of online sales. Recognizing this, brands that were previously restrictive about letting other websites carry their jewels are now softening their stance, since being part of tightly curated digital stores lets them capitalize on the technical expertise, marketing power and customer reach such sites can offer.
New ground for old stalwarts
LVMH has focused its attentions and cash on 24 Sevres — a digital version of Le Bon Marche, the group’s upmarket Paris department store. The site launched last year, and after a successful experiment with costume jewelry to test consumer demand, it is now filling its virtual shelves with an increasingly fine selection of jewels. LVMH has yet to add any serious carat weight from its own labels, such as Chaumet or Bulgari, but the younger brands the site is selling now could be guinea pigs for a future expansion.
Net-a-Porter is taking no such baby steps. The luxury e-tailer — which Richemont Group now owns following its takeover of parent company Yoox Net-a-Porter (YNAP) — excels in jewelry sales of $6,600 (GBP 5,000) and above, and it knows what sells. At the moment, that’s fashion-led designs, color, and jewels set with baguette-cut diamonds by Suzanne Kalan and Anita Ko, according to the company. The platform’s top customers, known as EIPs (Extremely Important People), spend an average of $46,400 (GBP 35,000) a year on fine jewelry and watches, and account for 75% of the site’s total sales.
Targeting the younger crowd
The wild card of the trio — in jewelry terms, at least — is Farfetch. It has none of the backing or experience of an ancient luxury conglomerate. Instead, it is what’s known as a unicorn company, due to its status as a privately owned venture with a recent valuation of more than $5.3 billion (GBP 4 billion) ahead of its float on the London Stock Exchange (unicorns must be worth at least $1 billion).
However, it seems to be well-positioned. While old-world jewelers are fighting for online space from scratch — albeit with flashy hires like former Apple Music exec Ian Roger, LVMH’s unorthodox choice for chief digital officer — Farfetch already has that world shored up. Plus, its shoppers are young. Last year, jewelry was in the top three fastest-growing sectors of the total global luxury market, which grew 5% to $1.4 trillion (EUR 1.2 trillion), according to Bain — and much of that growth was driven by the under-40 crowd. The company’s sales have risen at an average rate of 50% a year.
While Net-a-Porter’s jewelry subsection, The Fine Jewelry and Watch Suite, comes complete with style tips and guides for the connoisseur, Farfetch’s Fine Jewellery Hub section blasts its fashion-savvy shoppers, whose average age is 36, with edgy photo shoots. Chief commercial and sustainability officer Giorgio Belloli describes these images as “skewed toward the millennial.”
Indeed, says the Bain report, “the main growth engine of the luxury market is a generational shift, with 85% of luxury growth in 2017 fueled by Generations Y and Z. But a broader ‘millennial state of mind’ is permeating the luxury industry and changing the purchasing habits of all generations...pushing luxury brands to redefine what they deliver to customers, and how they deliver it.”
And so it would seem. Just as streetwear knocked suiting off the fashion pedestal, stuffy private salons could fall to inclusive fashion websites in this fresh take on hard luxury.
Image: Gaelle Khouri at Net-a-Porter; De Beers at Farfetch; Anissa Kermiche at 24 Serves.Article from the Rapaport Magazine - August 2018. To subscribe click here.