But if in 2019 the Internet sales of personal luxury goods (clothes, bags, shoes, watches and jewelry) accounted for 12% of the market, estimated at € 350 billion, then by 2022 their share will grow to 20%, experts predict.
In general, the global luxury goods market amid the pandemic will face a collapse: now even the most optimistic scenario assumes a 35-45% drop in sales in 2020. Earlier in its consensus forecast, the Boston Consulting Group expectedthat this year the market will lose about € 105 billion and return to the level of 2011, when its volume was equal to € 250 billion.The recovery of the global industry, experts say, will be gradual, sales in most categories will return to pre-crisis levels only in 2023.
Anna Dubrovina, a spokeswoman for one of the largest sellers of luxury goods in Russia, TSUM, confirmed that the restrictions imposed on offline trading have given additional incentive to online sales channels. In the first quarter of 2020, the company recorded an increase in online sales by 57%, and in the second – by 151%. In general, over the first half of the year, sales increased by 103% (the company does not disclose absolute figures). “We are confident that the trend for active growth of online will continue in the second half of the year,” Dubrovina said.
Isolation motivated people to shop online, according to the press office of Aizel (a luxury multi-brand boutique and online store). “From the point of view of trade, the Internet is our main direction, and the transition during quarantine was quite smooth and smooth for us with a positive dynamics of traffic growth. It would be very difficult without an online platform, because the collections have already been purchased and brought in, ”a company representative said without revealing the speakers. RBC sent a request to Bosco di Ciliegi.
Participants in the global luxury market previously expressed the opinion that while their offline sales will decline, the winners will be those who can quickly move consumers online. A quarter of the respondents were confident that their online sales will grow by 10-50%.
The luxury industry faces the risk of an eight-year retracement
The head of the world’s largest manufacturer of luxury goods, the French LVMH (brands Christian Dior, Louis Vuitton, Givenchy, Guerlain, Moët & Chandon, etc.) Bernard Arnault, commenting on the group’s reporting, stressed that fashion houses managed to demonstrate flexibility in adapting to the global situation, as in costs and accelerating online sales growth. Although the group dropped 38% revenue in the second quarter of 2020, the company saw an increase in consumer activity in June, according to Arnault.
The pandemic-fueled online trend is enabling brands to respond to consumer demand for personalization, said Maxim Bakhtin, partner in BCG’s Moscow office. Customers want to get the same service online as they do when shopping in traditional stores, the researchers emphasize. Some brands have added similar services to online sales during the self-isolation regime, for example, Gucci and Galeries Lafayette have opened video consultations for clients.
“The survey showed that 54% of Russian respondents expect that luxury brands will help them choose their wardrobe in accordance with previous purchases and general fashion trends and provide other additional services of this kind online. And more than half of the respondents are ready to share their data and would like brands to keep in touch with them not only through regular advertising, but also through newsletters, as well as other more personalized tools, ”said Maxim Bakhtin.