As Italy entered a new coronavirus lockdown and shut shops in March, Genoa-based jeweller Gismondi 1754 turned to messaging service WhatsApp to sell a 300,000 euro diamond ring to a wealthy Swiss client.
At the same time, sales assistants at luxury puffer jacket brand Moncler were arranging gourmet dinner deliveries to customers homes so they could dine in style while watching a video streaming of the brand’s latest collection.
The pandemic has forced luxury goods companies to use social media, video and virtual showrooms to woo their wealthy customers in Europe and keep them shopping at a time when tourists, especially from China, have been absent for more than a year.
Retailers reopened in Britain and most of Italy on Monday, but they remain shut in France and access is restricted in Germany, where in Berlin, for example, a negative COVID test is required to go into most shops.
Senior executives in the industry said this trend of selling outside the traditional store network, while not replacing the need for physical shops, is here to stay.
“We are learning that we can also have a high level of service with a low level of physical contact,” Moncler’s boss Remo Ruffini told Reuters. “Distant sales are a new frontier, something in the middle between e-commerce and a traditional store.”
Analysts say that lockdowns and “staycationing” mean that wealthy Europeans have money to spend that they are not splurging on fancy hotels or Michelin starred restaurants.
Designer brands are keen to capture some of that cash.
High-end labels such as Hermes, which used to be more reticent to sell online, have had to fully embrace e-commerce. Online revenues for the industry have doubled to nearly 20% of sales in the past year alone, based on analyst estimates. Boston Consulting Group expects that percentage to rise to 25% by 2023.
KEEPING IN TOUCH
Luxury labels have also invested in transforming store assistants into personal shoppers who pamper their VICs – very important clients – by sending them products at home and keep in touch regularly. Most brands now stream products on social media and show customers specific product videos.
Before the pandemic, Gismondi would not have sold a 300,000 euros, 10-carat diamond ring without showing it to the client in person. “I was on the phone chatting with the lady who is buying it, and it came up that this was the dream of a lifetime for her,” Massimo Gismondi, chief executive of the jewellery group, said.
From that moment, an exchange started with the lady via WhatsApp and video-calls to find the perfect design for the ring that will be delivered to her home.
