Luxury online resale market soars as wealthy buyers go on spending spree
- Christie’s, Sotheby’s and 1stDibs have seen large jumps in year-on-year sales figures as the pandemic alters buyer behaviour
- Buyers’ price threshold has also shot far beyond expectations, with more people willing to splash out on super expensive items
Mass market retailers aren’t the only ones betting on a banner online holiday sales season.
Christie’s auction house has launched its worldwide “Luxury Week” with strengthened offerings to meet this year’s record demand. (“Week” this year is a loose designation, given that some of the sales have already started, and many last through mid-December.)
“This year we’ve seen a 200 per cent increase in the number of [online] sales” for November and December,” says Caroline Ervin, a head of e-commerce for Christie’s jewellery department.
Last year, Christies hosted just four online-only luxury sales in the same November/December stretch. Those sales carried a high estimate of about US$9.5 million. This year there will be 12, with a total high estimate of just under US$40 million, a 322 per cent increase. “It’s just a response to the market,” Ervin says.
Sotheby’s, which is hosting its own live and online December luxury sales under the heading “The Festival of Wonder”, has already quadrupled its year-on-year volume of online sales, and quintupled its total sales, which currently stands at US$150.5 million, according to the auction house.
Of that amount, US$79.7 million has gone to online jewellery sales – nine times greater than last year – and US$42 million, or five times as much as 2019, has gone to watch sales.
Meanwhile 1stDibs, an online platform for high-end furniture, art and jewellery, has seen gross merchandise value rise year on year by 30 per cent for the 10 months since Covid-19 hit. And in the last two months leading up to the holidays, “we’ve seen an acceleration in growth”, says David Rosenblatt, 1stDibs’s chief executive officer.
It’s not just the number of online auctions that have risen. Buyers’ price threshold has shot far beyond anyone’s expectations. “Historically, we’ve viewed [the ceiling for] sales as US$20,000,” Ervin says. “We wanted to offer a few higher-value lots in each sale to see how clients responded, and [then] it boomed.”
Before 2020, only a single online-only lot at Christie’s had sold for more than US$80,000; this year, 25 sold for more than US$100,000. One of those lots was a 28.86-carat diamond ring that sold for US$2.1 million.
At 1stDibs, the gross merchandise value for sales of objects over US$100,000 are up 60 per cent year on year, says Rosenblatt. “Demand has risen for everything we sell.”
Online luxury sales had been ramping up for some time, as consumers became more comfortable with buying used items online, and auction houses and other resellers explored strategies beyond the traditional high-touch model of live sales.
Once the shutdown became a several-month-long reality, luxury resellers discovered to their genuine surprise that people were more willing to spend than ever. “Buyer behaviour has changed dramatically, overnight,” says Rosenblatt. “We’ve seen 10 years of digital adoption over the last 10 months.”
That is in large part because these companies have refined their understanding of what can and will sell without an in-person viewing.
“A lot of it is truly click, then buy,” says Ervin. “Part of that is what we choose to put online – we won’t put something that’s high value and needs a lot of research. We tend to offer signed pieces, so you know the brand name and might know the design already.”
At Christie’s, wealthy buyers can bid online for an Hermès “Himalaya” crocodile Birkin bag made with white gold and diamond hardware, estimated between US$200,000 and US$250,000, or (and?) an 18-carat pink-gold Patek Philippe chronograph watch manufactured in 1950, which has an estimate of US$400,000 to US$600,000.
At Sotheby’s, someone with a holiday budget of about a quarter of a million dollars can bid in its online jewellery sale on a diamond ring with a 5-carat, cushion-cut diamond flanked by 0.8 carats of heart-shaped diamonds on a platinum band; the ring carries an estimate of US$150,000 to US$200,000.
Alternately, if someone has lost out on the “Himalaya” Birkin at Christie’s, they can take a crack at the same, slightly smaller version of the bag – this one from 2010 – which is offered at Sotheby’s for US$260,000 to US$300,000 in a sale that closes a day later.
1stDibs goes even higher. A wealthy person looking for a pick-me-up might find encouragement in a US$2.35 million, 35.31-carat yellow diamond necklace surrounded by another 47 carats of multi-shape diamonds. They can have it shipped express for an extra US$100, according to the site.
For a holiday surprise, they can buy a US$365,000 Victorian fire screen filled with taxidermied hummingbirds. (Disclosure: sales tax will run you more than US$32,000.) All of this, specialists say, is an attempt by retailers to meet a demand for high-value e-commerce.
“This fall, leading up to these sales, we were having such a high sell-through rate that we’ve increased the number of lots offered,” says Ervin. “Someone is increasing their buying for sure, because we’re offering more lots, and we’re still selling those lots.”