The Changing Face of The Luxury Industry
In the current climate, the perks are many. It’s hassle-free, safe and not time-bound.
The COVID-19 pandemic has created a sense of chaos the world over, however, the luxury industry, as a whole, is transforming this into an organised chaos. What has come as one of the biggest jerks to the global economy is driving innovation in the retail business model and disrupting ‘normal’ practices.
The traditional interaction of the Indian consumer with luxury brands has one which has been born out of travel or the ability to visit the traditional brick-and-mortar stores. However, with the lockdown and stay-at-home mandate, consumers are now exploring new avenues to interact with their favourite brands- the most important of which being digitally. In the current climate, the perks are many. It’s hassle-free, safe and not time-bound. At the click of button, consumers are now browsing their favourite brands, taking the time to make informed purchase decisions and increasingly moving towards multi-brand retailers for an easy compare-and-contrast.
As online luxury shopping moves centre-stage, it would be misinformed to say that the offline shopping experience will be completely side-lined in the future. The simple pleasure of walking out with a full shopping bag is an experience in itself and will always be so. In the Indian luxury landscape, we have always seen online and offline work in tandem during a purchase decision. What traditional marketers call ‘ROPO’ or ‘Research Online, Purchase Offline’, was the go-to path to purchase across product categories, especially luxury goods. However, with COVID-19, the latter half of the process was severely curtailed and the entire process moved online.
By June 2020, it came down to the first plunge. People, particularly HNI’s over the age of 40, who had never shopped for high-end goods online were now ready to give it a try. Coupled with our increased advertising budgets, the number of first-time consumers of Darveys.com jumped four fold on a monthly comparative basis compared to previous year.
This is in line with the shift in consumption habits seen in age and income segments noted by the Bain and Facebook study of SouthEast Asian consumers. Nearly 78% people between the ages of 45 and 54 years have interacted with digital apps and online stores for the first time. The scepticism attached to making high-end purchases online is waning and the effects of this will continue to be realised well after the pandemic is a thing of the past.
The strength of Darveys business model rests on two main pillars- first, the wide offering from around the world in one place and second, a robust client relationship management system. Darveys connects the inventory of 500+ authorised luxury boutiques across USA & Europe to consumers in India. While you may be shopping from the confines of your home, the product is being shipped from the store itself located abroad. This process is instrumental in the conversion of browsers to consumers and is one of the main forces behind maintaining a loyal consumer base of over 2 lakh luxury repeat shoppers.
Another major change in the luxury business landscape has been with respect to product categories. Purchase in the accessories segment, including but not limited to shoes, belts and bags, has fallen wherein clothing, specifically activewear, has seen a jump in sales. Consumers are looking to buy items that they can wear at home, to work and to small gatherings rather than accessories that would complement their look at a more formal affair. They would rather spend on an Emporio Armani activewear set that can be put to immediate use than a Salvatore Ferragamo belt that would see the light of day in a couple of months, once socialising resumes.
In a subcontinent like India, weddings and festivals like Diwali will always have tremendous value, come what may. In the last couple of months, weddings might have become more intimate, but trousseau shopping remains at an all-time high. On examining the current trends of consumer behaviour, we’re predicting an 800-1000% growth in sales around this upcoming festival season, compared to pre-COVID sales.
The pandemic is going to have long-lasting effects on the economy and the consumption patterns of people around the world. However, one thing is certain, Indian luxury consumers are embracing e-commerce and digital spending like never before and we’re proud for Darveys to be leading the charge!
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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