Would you pay almost HK$600,000 to buy a watch online? Cartier believes someone would and it is right. A Panthère de Cartier white gold diamond watch was sold on Net-a-Porter within two weeks of the collection’s launch on the multibrand luxury e-commerce site.
“In terms of selling, we are not seeing price resistance across the board,” says Lisa Aiken, the e-commerce site’s retail fashion director.
Apart from expanding their own online stores, luxury watchmakers and high jewellers are tapping multibrand e-commerce sites to reach new customers and keep up with the digital market growth.
“Panthère de Cartier is also a fashion accessory, hence we felt that collaborating with the fashion e-commerce powerhouse makes a lot of sense,” says Arnaud Carrez, Cartier’s international marketing and communication director.
The potential for digital luxury market certainly looks promising. McKinsey & Company projects that by 2025, the online share of total luxury sales to be 18 per cent, worth about 70 billion euros (HK$605.8 billion) annually, making e-commerce the world’s third largest luxury market, after China and the United States.
Luxury conglomerate LVMH’s first multibrand e-commerce platform 24Sèvres.com is due to open later this month, featuring first-tier luxury brands such as Dior and Louis Vuitton. It’s still unclear whether LVMH-owned watches and jewellery brands will be featured on 24Sèvres.com.
Many other luxury giants such as Richemont’s watches and jewellery brands have been embracing multibrand e-commerce sites, especially Net-a-Porter and MR PORTER, whose mother company Yoox Net-a-Porter Group counts Richemont as a prominent shareholder.
Richemont brands IWC Schaffhausen and Piaget launched capsule collections on Net-a-Porter earlier this year. Montblanc took a step further and launched its first smart watch supported by Google – the Montblanc Summit Collection – on MR PORTER last month. The collection was sold exclusively on the men’s e-store for a two-week run ahead of its release in Montblanc’s brick-and-mortar stores and e-stores.
The collaboration has yielded positive results, not only for brand-building but also for commercial success, says IWC Schaffhausen’s CEO Christoph Grainger-Herr.
“The result was beyond all our expectations,” Grainger-Herr says. “Sales were coming in from all price points. It’s a very positive sign.”
The prices of timepieces listed on Net-a-Porter range from about HK$28,400 up to over HK$1 million. Aiken also points out that the site’s unique clientele spending pattern ensured the sell-through rate for luxury watches and fine jewellery.
“Our highest proportion of sales comes from ready-to-wear, which is quite unique as traditionally it would come from accessories,” she says. “The women who are able to spend money on ready-to-wear are making less of an aspiration or investment purchase [such as accessories]. It’s a testament to how strong their spending power is. This shows that there’s an opportunity there that we weren’t capitalising on as much.”
Price resistance was not the only reason that’s been stopping luxury brands to fully embrace luxury e-commerce sites. Losing control of their branding on such multibrand e-commerce sites was also a major concern which is now being addressed and acknowledged as these sites matured throughout the years.
“Brands now have growing confidence to work with us,” Aiken says. “They used to feel that they want to stick with brick-and-mortar stores because once they open the floodgates on e-commerce it won’t be so easy to close them. We collaborate with brands on the marketing and creative content to make sure that the products will be represented in a truly luxurious manner [online].”
That said, purists still believe that for luxury products, to actually touch and feel the items is an emotional engagement that would be hard to replicate through an online environment.
Wilhelm Schmid, CEO of A. Lange & Sohne, says he’s not planning to invest much in e-commerce.
“For me, nothing can substitute that feeling when you touch a watch and when you feel it around your wrist,” Schmid says.
“Brick-and-mortar stores are still very important,” says Angelo Bonati, CEO of Panerai. “You can dream about the product when you touch and feel it but not through a computer.”
Although Panerai just launched e-commerce in mainland China and plugged the initiative with the brand’s first ever ambassador – Chinese actor Wallace Huo – Bonati says he’s not expecting e-commerce to be an overnight success.
For the early adopters though, the strength of e-commerce is obviously the multimedia creative content that goes around it which leads to the luxury brands’ selection of their many product offerings to be represented in an e-commerce environment – for example, Chanel’s Coco Crush collection, Piaget’s Possession series and IWC’s Da Vinci collections were featured on Net-a-Porter.
Luxury watchmakers and jewellers say that working with multibrand e-commerce stores helps them reach new audiences different from the ones visiting their own e-stores.
“You have this trusted authority in style which takes simple as seeing the watches out of the pure watch context,” Grainger-Herr says. “The difference is as simple as seeing watches in a fashion shoot, as opposed to seeing pack shots of watches on a watch website . They emotionalise the storytelling which gives it a huge amount of power.”
Gaining prominent sales aside, luxury watchmakers and jewellers are also offering holistic services for their customers and increasing the channels through which to communicate their branding.
“We are being very careful when it comes to branding,” Carrez says. “We see the collaboration as offering additional services to our clients and that it should be enriching Cartier’s digital eco-system. It’s not a competition but a complement.”
Carrez cites examples of customers going into brick-and-mortar stores asking for the Panthère de Cartier watches after seeing them featured on Net-a-Porter.
“The number of contact points is becoming so diverse,” he adds. “We have clients who want to connect only through whatsapp or social media. Everything in this eco-system needs to be consistent.”
The development of luxury watches and jewellery e-commerce is still in its infancy and how its growing maturity would impact the traditional brick-and-mortar dealer network remains unclear.
Prince Jewellery and Watch Company’s CEO Jimmy Tang, however, is not too concerned about how his business would be greatly influenced by this development.
“In places like Hong Kong, brick-and-mortar stores are so accessible,” he says.
“It’s convenient for customers to go into a store and try on watches. You might be able to sell limited-edition watches that are exclusively online but there won’t be so much of a competitive edge if the same watches are sold at boutiques with same prices.”
Multibrand fine jewellery e-commerce site Plukka’s CEO Natalia Obolensky also welcomes more players to the luxury e-commerce realm.
“Our advantage is that we are a jewellery-only brand. We have so much depth in this category that we can find the perfect piece for our clients based on the data we’ve collected throughout the years,” she says. “I don’t think about it so much as competition but more as opportunities.”
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