{"id":63001,"date":"2021-04-21T10:14:42","date_gmt":"2021-04-21T08:14:42","guid":{"rendered":"https:\/\/visionarymarketing.com\/?p=63001"},"modified":"2021-10-16T09:13:11","modified_gmt":"2021-10-16T07:13:11","slug":"luxury-market-2021-digital-china","status":"publish","type":"post","link":"https:\/\/visionarymarketing.com\/en\/2021\/04\/21\/luxury-market-2021-digital-china\/","title":{"rendered":"2021 luxury market update : it’s all about digital and China"},"content":{"rendered":"

What is the status of the luxury market and digital in this Covidised 2021 world? A little more than three years ago, Philippe Jourdan,<\/a> one of the world’s leading marketing experts<\/a> regarding the luxury market, told me that the role of digital in the luxury market was not as significant as one may have thought. <\/em>I interviewed him a few weeks ago in order to better understand the current situation and assess how much it had changed under the pandemic. Let’s see what has happened in the past three years and more particularly in 2020-2021. Namely, with regard to the unstoppable rise of China in the luxury market. Above all, according to Philippe, attitudes regarding the online purchase of luxury products have changed dramatically during this crisis. All this might well end up alter consumers’ behaviours forever.<\/strong><\/em><\/p>\n

2021 luxury market update : it’s all about digital and China<\/h2>\n
\"State
What is the status of the luxury market in 2021? It’s all about China and digital<\/figcaption><\/figure>\n

<\/p>\n

What has happened in the past three years in the world of luxury?<\/p>\n

As I was expecting, we have witnessed the quickening pace of trends I had already uncovered years ago. The first trend in the global market is obviously the growing share of the Asian market.<\/strong><\/p>\n

The Chinese market is now the world’s largest market for luxury goods<\/h3>\n

China’s market share is around 30%, depending on the sectors and product categories involved<\/p><\/blockquote>\n

\"The
In 2021, digital is all about China, and digital and even digital in China for that matter<\/figcaption><\/figure>\n

This is more than the US, more than Europe, and has obviously been boosted for some time by the growth of Chinese tourism around the world.<\/p>\n

We predicted this trend three years ago, and we have been proven right.<\/p>\n

Luxury 2021: the prominent role played by digital<\/h3>\n

In addition, there has been a change in the distribution channels mix, with the growing share taken by digital.<\/p>\n

Digital was initially used with great caution. In 2017, the share of e-commerce was between 8 and 12%.<\/p>\n

Things have now changed dramatically.<\/p>\n

Luxury has probably been lagging behind, which is not surprising, as luxury brands are meant to be marketed in their own stores as well as they encourage face-to-face contact with customers.<\/p>\n

We’re talking about products that people like to touch and try, and about a business model whereby the brand seeks to attract its customers and bring them to where it has invested the most, i.e. in those ubiquitous flagship stores, all over the world.<\/p>\n

The versatility of e-commerce in luxury<\/h3>\n

Initially, luxury was more prone to resort to the web-to-store*<\/strong> business model: one presented products on the Internet, with the aim of bringing customers into one’s stores.<\/p>\n

Then, brands became aware of the alternative store-to-web* <\/strong>business model. A model whereby people who came to the shop, then went on to continue their product search on the Internet.<\/p>\n

The Chinese have set the pace, because there is a continuum from digital shopping to in-store shopping over there. Web-to-store and store-to-web are the two inseparable parts of e-commerce.<\/p>\n

\"luxe
Web-to-store and store-to-web are the two inseparable parts of e-commerce<\/figcaption><\/figure>\n

Plain vanilla e-commerce also exists in luxury: people buy online what they have seen in the store or on the website.<\/p>\n

Initially, brands considered the Internet as an incredible sounding board for demonstrating their collections, their fashion shows and their know-how.<\/p>\n

Today, barring a few exceptions, luxury brands have all really taken to e-commerce<\/p><\/blockquote>\n

They have even gone a little too far at times. If they started out with e-commerce sales on their own websites, today they are marketing their products online, in partnership with online marketplaces.<\/p>\n

\"Luxe
2021 luxury market update: as with Louis Vuitton, luxury brands have been moving into online sales<\/a><\/figcaption><\/figure>\n

Marketplaces are and will continue to be the go-to places for online shopping in China, even after the pandemic is over<\/p><\/blockquote>\n

These marketplaces are sometimes luxury digital subsidiaries of Chinese e-commerce giants, such as Alibaba. Their potential for luxury brands in terms of logistics is humongous.<\/p>\n

However, there is a danger that in the future perhaps, they might order luxury brands around.<\/p>\n

They own the data, they will have access to consumers, and they will be able to impose their negotiation terms. Maybe not on the biggest brands, which remain desirable and unavoidable. But they will be able to do so with all the new players in the luxury sector wanting to tackle the Chinese market and the digital part of this market in the future. Working with these Chinese players will be a no-brainer.<\/p>\n

The increased weight of digital in luxury due to the pandemic, especially in China<\/h3>\n

Of course, recent developments in the health situation have amplified all previous ongoing changes.<\/p>\n

One may wonder whether the acceleration of digital in luxury is here to last. Will things return to the old normal after COVID-19, or vice versa? That is the question.<\/p>\n

The role of digital in China is staggering: 7 out of 10 purchases of luxury goods in China are made online.<\/p>\n

The reason for this is obvious: stores are closed and, above all, the travelling of Chinese tourists around the world, particularly in Europe has ground to a halt. This means that Chinese people who wish to buy luxury goods have done so massively on the Internet.<\/p>\n

Depending on the sector, around 50, 60 or even 70% of purchases in the luxury sector have been made on the Internet in the recent period<\/p><\/blockquote>\n

This is slightly less true in the US and France, but even so, digital accounts for nearly a third of purchases there<\/strong>. It’s the same all over Europe. So we are seeing a tremendous acceleration.<\/p>\n

\"\"
As much as 70% of luxury purchases in China are made online, only 30% in Europe. Incidentally, in China, digital already accounts for 25% of online purchases for the entire retail sector<\/a>. A sign that the luxury market in 2021 has shifted to Asia and even, digital in Asia<\/figcaption><\/figure>\n

Today, there are multiple ways to buy luxury on the Internet<\/h3>\n

An easy way for luxury brands to go online\u00a0is to offer their products and propose to their customers, in the traditional way, to put them in their basket, pay and have them delivered to their home.<\/p>\n

But of course, web-to-store<\/strong> is a viable option. It’s also possible to ask customers to make an appointment online<\/strong> with pre-booking, especially regarding ready-to-wear, with the possibility of personalized coaching<\/strong>.<\/p>\n

The total revenue brought by the Internet for luxury brands exceeds the online turnover by far. In order to understand the total revenue contribution of digital to these brands, it’s necessary to include the share of customers who chose their brands and models on the Internet, but ended up buying them in store.<\/p>\n

The importance of web-to-store will depend on what happens when we come out of the crisis and how likely customers are to return to high-street shopping. There is a possibility that behaviours could change significantly for good<\/p><\/blockquote>\n

Today, we are witnessing a strong growth in purchases made online. The real question is: are these online purchases made because of the lockdowns that prevent us from doing high-street shopping?<\/strong><\/p>\n

Or, on the contrary, will consumers realise how much potential digital offers, in terms of practicality and convenience?<\/p>\n

Marketers used to say that attitude paves the way for behaviour, i.e. what I perceive as pleasant I end up doing. Here it might well be the other way around. That’s noteworthy<\/p><\/blockquote>\n

Behaviours have changed out of necessity, and this change might impact attitudes that will never go back to the old normal.<\/p>\n

This would suggest that there is an attitude towards buying luxury goods on websites that was created at the time of a change in behaviour, but which eventually changes behaviours in a lasting way.<\/p>\n

https:\/\/media.blubrry.com\/visionarymarketing_les\/agence.visionarymarketing.com\/files\/podcasts\/Philippe-Jourdan-Luxury-2021-EN-mixdown.mp3<\/a><\/audio><\/div><\/div>

Podcast (english): Play in new window<\/a> | Download<\/a> (Duration: 8:34 — 11.8MB)<\/p>

Subscribe: Apple Podcasts<\/a> | Spotify<\/a> | Android<\/a> | RSS<\/a><\/p>","protected":false},"excerpt":{"rendered":"

What is the status of the luxury market and digital in this Covidised 2021 world? A little more than three years ago, Philippe Jourdan, one of the world’s leading marketing experts regarding the luxury market, told me that the role of digital in the luxury market was not as significant as one may have thought. …<\/p>\n","protected":false},"author":2,"featured_media":62991,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5076],"tags":[],"class_list":["post-63001","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-e-commerce"],"yoast_head":"\n2021 luxury market update : it's all about digital and China<\/title>\n<meta name=\"description\" content=\"What is the status of the luxury market and digital in this Covidised 2021 world? 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En 2014, il est pass\u00e9 d'intrapreneur \u00e0 entrepreneur en cr\u00e9ant son agence de marketing num\u00e9rique.","sameAs":["https:\/\/visionarymarketing.com","http:\/\/facebook.com\/ygourven","http:\/\/linkedin.com\/in\/ygourven","https:\/\/x.com\/ygourven","https:\/\/www.youtube.com\/c\/visionarymarketingagency"],"url":"https:\/\/visionarymarketing.com\/en\/author\/yann-gourvennec\/"}]}},"_links":{"self":[{"href":"https:\/\/visionarymarketing.com\/en\/wp-json\/wp\/v2\/posts\/63001","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/visionarymarketing.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/visionarymarketing.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/visionarymarketing.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/visionarymarketing.com\/en\/wp-json\/wp\/v2\/comments?post=63001"}],"version-history":[{"count":0,"href":"https:\/\/visionarymarketing.com\/en\/wp-json\/wp\/v2\/posts\/63001\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/visionarymarketing.com\/en\/wp-json\/wp\/v2\/media\/62991"}],"wp:attachment":[{"href":"https:\/\/visionarymarketing.com\/en\/wp-json\/wp\/v2\/media?parent=63001"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/visionarymarketing.com\/en\/wp-json\/wp\/v2\/categories?post=63001"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/visionarymarketing.com\/en\/wp-json\/wp\/v2\/tags?post=63001"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}