The pandemic forced luxury goods companies to use social media, video, and virtual showrooms to woo customers in Europe and keep them shopping at a time when tourists, especially from China, have been absent for more than a year. Analysts believe the government-imposed lockdowns have left wealthy Europeans with money to spend, and designer brands are keen to capture some of that cash.
Last month a Genoa-based jeweler - Gismondi 1754 - turned to WhatsApp to sell a 10-carat diamond ring to a Swiss client without showing the ring 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 jewelry group, said. Shops were closed due to a government-imposed lockdown in Italy.
While not replacing the need for physical shops, the trend of selling outside the traditional store network is here to stay. Labels such as Hermes, which used to be reticent to online sales, have fully embraced e-commerce. Analysts estimate online revenues for the luxury industry to have doubled to nearly 20% of sales in the past year alone. Boston Consulting Group (BCG) predicts that percentage to rise to 25% by 2023.
Luxury houses are training their sales assistants for “distant sales”. They receive client lists which they then contact to show them the latest arrivals via video chat. The assistants get to know the clients personally and send them clothes or accessories that suit their tastes and preferences. “You create a strong relationship between the salespeople and the customer,” said Prada’s CEO Patrizio Bertelli.
“If there is something I like they send it home. They know my size and if in doubt they send more than one size. I buy what I like and I send back the rest,” said a Milan-based PR executive who spends on average 40,000 euros a year in Prada’s stores. Since last year Prada has regularly sent her videos about the clothes they have available.