Cross-border Online Luxury Sales up 170% YOY as Digital Drives Luxury’s Post Pandemic Recovery
Sales data from eShopWorld reports luxury sales in July 2020 performed 43% higher than Christmas 2019
5th October, Dublin – International online sales of luxury goods increased by 170% year-on-year (YOY) in August and September, sales data from cross-border ecommerce leader, eShopWorld (ESW), has revealed, as brands on the platform pivot their selling strategies to bring the luxury experience online, and target non-domestic markets.
These increased sales figures follow a peak of activity in July when cross-border sales of luxury goods were 40% higher levels than in the lead up to Christmas 2019 – traditionally the strongest sales period in the calendar alongside the January sales.
With a reliance on in-store experience and exclusivity, luxury brands have often postponed investment in digital channels. But, faced with the unexpected closures of brick-and-mortar stores coupled with changing customer demographics and newly adopted behaviours, experiential luxury is now facing a decrease of between 40 to 60%1, and the personal luxury segment is predicted to drop between 25 to 45% compared to 20192.
With markets affected to different extents, and Europe and the Americas predicted to suffer the most, the pandemic has caused much of the luxury market to reprioritise digital, from better ecommerce experiences to showrooming, to online global Fashion Week events to maximise sales across a geographically diverse customer base. However, building the trust required to encourage luxury purchases online dictates the best way to reach and serve this demand is through localised shopping experiences where ecommerce customers in every geography feel as if they are receiving the same level of service and convenience they would enjoy if shopping at their local store.
Additionally, the influx of younger luxury shoppers, Millennials (1978 – 1992) and Gen Z (1993 – 2001) are predicted to make up 61% of the market by 20263, makes understanding the mindset of this mobile-first, social-first generation a necessity.
Tommy Kelly, CEO of ESW, commented: “In the current climate, there is incredible opportunity for luxury beyond the traditional channels and markets, particularly as older shoppers have become more comfortable with online, while digital natives are, of course, already there.”
“While demand for experiential luxury is impacted due to Covid-19 restrictions, personal luxury shopping remains buoyant which is a very interesting shift for the sector. For several years we have seen a focus on offering immersive and local experiences to drive an emotional connection with a brand, especially for younger consumers, but Covid-19 has reconfigured how this is delivered. Our data shows forward thinking luxury brands that embrace the concept of localised commerce, making seamlessness and ease a key differentiator of the luxury shopping experience alongside the traditional tenets of quality, craftsmanship and heritage are seeing strong growth in sales. The much-predicted shift to digital luxury is well underway.”
Luxury brands need to focus on recreating the personalised white glove experience discerning customers receive in-store, online, deploying those experiences across borders, as the balance of power between a brand’s retail flagship store and its online store shifts, with digital sales growing at a faster rate.
Kelly commented: “Luxury companies are having to accelerate their digital presence to compensate for the decrease in in-store shopping. To do so they need to create brand-owned online stores if they want greater control and wish to position their products according to their sales strategies, striking a balance between brand experience and the ease of finding products seamlessly. This allows for the merging of the physical and digital worlds to create innovative retail experiences delivered with the seamless service consumers expect from luxury retailers.”
ESW is the largest cross-border ecommerce provider globally with the combined gross merchandise value transacted through its platform set to double in 2020 to nearly £1 billion.
Brands partnering with ESW can enter new international markets in as few as six weeks, up to six times faster than if they attempted to do so on their own – all while engaging directly with customers and retaining ownership of all the data collected during the shopping process.
- 1. Altagamma/BCG
- 2. Altagamma/BCG
- 3. Boston Consulting Group