Covid-19 is plunging old-fashion luxury brands into the digital age #31

2020/31/07

Even after e-commerce became commonplace, many luxury companies remained cautious about jumping into digital sales. Items that justify their thousand-dollar price tags with claims of exceptional craftsmanship and materials aren’t always able to communicate their desirability through tiny two-dimensional images. They may also lose their shine if shoppers can compare prices across sites, while the lavish experience of purchasing an item in an opulent store can feel merely transactional when checking out on a screen.

Still, as more shoppers have moved online, luxury companies have followed, and with Covid-19 now keeping consumers home and many stores shut, it’s pushing them even harder to give new priority to their digital businesses.

“During this time, when attitudes to shopping may be changing and habits may become even more online, I felt we needed not only an evolution, but a revolution in our digital culture,” Remo Ruffini, CEO of high-end jacket maker Moncler said on a July 27 call with investors and analysts. The company, which previously 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.

Kering, which owns brands including Gucci and Saint Laurent, said on July 28 that e-commerce accounted for 13% of its total retail sales (pdf) in the first half of 2020, up from just 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. “When I see the amount of business that we’ve been able to generate in the last six months on our e-commerce platform, I think there is a future for these platforms to generate a significant amount of the global sales,” Jean-Jacques Guiony, LVMH’s CFO, said on the company’s July 27 earnings call. Stores will remain the most important sales channel, he added, but e-commerce will also be a “very interesting way of approaching some clients and distributing products.”

Quartz