Luxury jewelry and watch brands have long since ignored online sales, both through their own web shops and through third parties. Nowadays, it seems they have changed their mind, as the online world offers plenty of growth, especially compared to offline channels.
Counterfeit
Luxury brands currently generate about 9 % of their turnover online, but jewelry and watches only reach 4 to 4.5 %. Luxury watches’ online sales are especially low and there have been several reasons for that reticence: many companies still think that a customer will not buy something expensive if he cannot look at it beforehand. The companies also fear counterfeit products and they also detest online sellers that buy excess stock from official dealers and then sell them at lower prices online, because those things are detrimental to a brand’s value.
Very few watch manufacturers sell directly to consumers, which weakens an online sales channel’s appeal. British Bremont was the first major watch brand to sell online, back in 2013, when it sold on Net-a-Porter after long discussions internally. “There comes a time when you have to give the customer what he wants and if he wants to buy directly from you online, then that is what you need to offer. I think a lot of brands will slowly evolve into that direction”, co-founder Giles English told Business of Fashion.
A famous brand like Rolex still does not sell online, but Richemont is an important driving force in the web shop-based jewelry and watch sales. The company not only own several well-known brands, but is also Yoox Net-a-Porter’s largest investor. This online platform hopes luxury watch and jewelry sales will generate 100 million euro by 2020.
20 % by 2025
Jewelry manufacturers have found their way to the online world a lot faster: Cartier has been online since 2010 and Tiffany precedes that by another ten years, even though its online sales have stagnated at about 6 %. “we see that an increasing number of our customer start their journey online, but that they still come to the store for the luxury experience and our sales people’s guidance”, vice-president Philippe Galtié said. In order to tap into the trend, several brands have started placing their prices online and have also indicated where people can buy the items.
Chances are that many expensive brands will never have an online sales channel, but Swiss Vontobel bank’s Rene Weber says eCommerce could contribute 20 % of luxury watch and jewelry brands’ turnover by 2025.
