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Oct 5, 2020
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Cross-border luxury e-sales soar

Published
Oct 5, 2020

Luxury has been as challenged as any other sector this year and as it has turned to digital to drive sales, it’s no surprise that this has led to a surge in international online sales of luxury goods.


Luxury shoppers have shifted from stores to online this year and the shift has continued even after stores reopened


But it’s interesting that shoppers didn’t confine their luxury online buying habits to the period when stores were closed during lockdowns.

Figures on Monday from Dublin-based eShopWorld said cross-border luxury sales increased by 170% year-on-year (YOY) in August and September too. That came as brands on the platform “pivoted their selling strategies to bring the luxury experience online, and target non-domestic markets”.

It added that the change is particularly evident this week as Chinese shoppers, following government advice to avoid international travel, choose to celebrate Golden Week at home.

Webstores were the luxury consumer’s key focus during lockdown for obvious reasons. And this continued into the early weeks of reopening too. In fact, eShopWorld said July saw a peak of activity and cross-border e-sales of luxury goods during the month were 40% higher than in the lead up to Christmas 2019 – which is traditionally the strongest sales period in the calendar alongside the January clearance sales.

But the continuation of much higher e-sales into the past two months suggests that fast online growth is likely to continue.

It all highlights how mistaken luxury retailers were to shun e-commerce for so long while the mass-market embraced it. But upscale brands and retailers have got the message and are investing in their digital channels. 

This makes sense given that experiential luxury is now facing a decrease of between 40% and 60%, according to Altagamma/Boston Consulting, and the personal luxury segment is predicted to drop between 25% and 45% in 2020 compared to 2019.

The influx of younger luxury shoppers will also have an ongoing effect with Millennials and Get Z set to make up 61% of the market by 2026, Boston Consulting believes.

Tommy Kelly, CEO of ESW, said: “While demand for experiential luxury is impacted due to Covid-19 restrictions, personal luxury shopping remains buoyant which is a very interesting shift for the sector. For several years we have seen a focus on offering immersive and local experiences to drive an emotional connection with a brand, especially for younger consumers, but Covid-19 has reconfigured how this is delivered. Our data shows forward-thinking luxury brands that embrace the concept of localised commerce, making seamlessness and ease a key differentiator of the luxury shopping experience alongside the traditional tenets of quality, craftsmanship and heritage are seeing strong growth in sales. The much-predicted shift to digital luxury is well under way.”

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