Would you buy a luxury car or an engagement ring online?
Liveried doormen, in-house cocktail bars and velvet-lined change rooms at luxury flagship stores are losing their buffed allure for select shoppers. Customers who once hesitated buying jeans on eBay are now comfortable online clicking with their credit cards for diamond engagement rings, handbags and prestige cars.
With e-tailer Net-a-Porter offering $79,000 watches from Piaget, Hermès selling $22,860 leather coats on its website and Dior’s $15,000 Lady Dior handbag sold out online, a broader range of luxury brands is now investing in the digital experience.
IRL vs. online: a model in Cartier’s two-level Oceania flagship in Sydney and a customer looking at the Mercedes-Benz vehicles online showroom.Credit: Janie Barrett, Supplied
Last year Cartier launched its 749-square-metre Oceania flagship in Sydney, with a private bar serving opal martinis, but managing director Alban du Mesnil was sure to include an e-commerce fulfilment centre on the lower ground floor.
“It’s more than a boutique,” du Mesnil said before the opening. “It’s a full brand platform connecting all the channels.”
Following the lead of fashion partners Proenza Schouler, Off-White and Moncler, Mercedes-Benz has launched a digital showroom for people who prefer someone else looking under the bonnet. Australian customers can click to book an online appointment, be shown through vehicles from a purpose-built studio in Melbourne, ask questions and make purchases.
Since the showroom went live in January a number of customers have kept their experience confined to the digital dealership and purchased their cars, starting at $50,000 and revving into six figures, online.
“Luxury is choice,” says Jerry Stamoulis, head of brand engagement at Mercedes-Benz. “We are giving customers the choice to look at a vehicle from wherever they like. For the time-poor, it is frequently in their lunch break. You can also look at vehicles from your bed in your pyjamas. It’s a one-sided video.”
Jeweller Michael Hill built its business in Australia, New Zealand and Canada, with sales staff guiding nervous couples through the process of selecting engagement rings, but confident customers are now equally happy to click as part of the proposal process. With many having swiped right on dating apps at the beginning of their love journey, it’s a natural next step.
Lady Dior handbag, $15,000, sold-out online; Digital sales of Michael Hill engagement rings reached 2 per cent last week; Mercedes-Benz opened a digital showroom studio in Victoria in January.
“The COVID lockdowns changed everything and people became comfortable spending more online,” says Michael Hill chief executive Daniel Bracken. “Customers now expect an omnichannel experience.
“Last week 26 per cent of our bridal jewellery sales were online. Before COVID, we would have been lucky to hit the 10 per cent mark.”
To enhance the digital experience Michael Hill introduced a ring try-on tool that places images of jewellery on photographs of customers’ hands. It also invested in its own in-house photo studio to improve the online appearance of diamonds.
“There are always people who will want to shop in-store and now there are people who prefer the online experience,” Bracken says.
Online confidence has also grown at department store David Jones. Last year’s biggest online sale of a $30,000 watch was eclipsed in February by a $41,000 Piaget watch. Transactions of more than $1000 increased by 14 per cent since last year.
At Net-a-Porter, the average transaction in the Asia-Pacific region has increased by 20 per cent in the past year.
“I just bought something from the jewellers Van Cleef & Arpels, which is something that I would never have done years ago,” says e-commerce coach and author Paul Waddy. “The main issue with spending large amounts online has always been trust. Luxury brands like Mercedes and Louis Vuitton have been building that trust for years.
“Many luxury customers put a price on time. It’s nice to visit the flagship stores, but it’s also nice doing it from your laptop.”
With LVMH-owned luxury label Loewe opening a Melbourne boutique in May and Italian brands Dolce & Gabbana, Missoni and Brunello Cucinelli about to open flagship stores in Sydney, bricks-and-mortar is still part of the luxury blueprint.
“Around 50 to 60 per cent of our online sales involve a store,” Bracken says. “People will research items in store before spending or may just select the click-and-collect option.”
At Mercedes-Benz, the digital showroom is being marketed as part of a buyer’s exploration process.
“It’s not a sales pitch,” Stamoulis says. “It’s a place where people can ask questions about warranties, electric vehicles or how the door handles work. These are intelligent customers, it’s just that some of our cars have fancy doors.”
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