As the e-commerce became commonplace, most of luxury companies has remained cautions about jumping into digital sales due to Covid-19, because items that justify their thousand-dollars price tags with claims of exceptional craftsmanship and materials aren’t always able to communicate their desirability through tiny two-dimensional images.
Covid-19 is keeping consumers at home and many stores were shut, and pushing them harder to give new priority to their digital businesses.
Remo Ruffini, the CEO of high-end jacket maker Moncler said the company which first outsourced its digital operations to fashion-tech outfit Yoox Net-a-Porter, announced it would bring those operations in-house and said it plans to double its e-commerce sales to 20% of its business by 2023.
The owner of Gucci and Saint Laurent, Kering said that e-commerce accounted for 13% of its total retail sales in the first half of 2020 before pandemic surge, up from 6% during the same period last.
CFO Jean-Marc Duplaix pointed out on a call with investors that even as stores have reopened around China and Europe, digital growth continued to accelerate.
LVMH—the world’s largest luxury group and owner of brands such as Louis Vuitton and Dior—said it saw strong performance across its own e-commerce channels, as opposed to online sales through other retailers, which have tended to dominate online luxury sales.
LVMH added, stores will ever remain the most important sales channel, but e-commerce will be a very interesting way of approaching some clients and distributing products.
E-commerce hasn’t been nearly enough to offset the tremendous losses luxury companies have suffered from closed stores and the plunge in international tourism, which makes up a large share of their sales.
But it has softened the blow. Prada, for instance, today reported that online sales grew 150% in the first half of year versus the same period last year, despite total sales falling 40%
All companies are taking note of how digital sales should only become important in the years ahead.
12% of luxury sales were accounted in the start of 2020, according to management consultancy Bain and Company.
The pandemic has forced shoppers to adopt to even more digital habits, and which some are likely to stick around. Bain estimated that by 2025, online sales could account for as much as 30% of the luxury market.