Findings from the Digital Luxury Experience from Altagamma Observatory in Milan—which analyzed 187 international luxury brands—found that though online sales of luxury goods account for only 2.6 percent of a 172 billion euro market, growth is taking place at a staggering 20 percent per year.
Online luxury sales are predicted to hit 11 billion euro by 2015 largely owing to blogs and social media, as one of two customers turn to Facebook or Twitter for advice before buying.
According to the survey, “Digital luxury customers require high-quality interfaces (websites and social media) to fulfill a new customer experience including not only shopping but also researching, exchanging ideas, and experimenting.”
Brands across eight different categories, including fashion apparel, jewelry, and watches, were analyzed according to their Facebook, Twitter, and YouTube activities; additionally, 1,500 consumers were interviewed across Europe, the United States, and China, as well as 70 key Altagamma brand participants.
Other key findings show that about 150,000 messages are generated weekly about luxury brands on social media, and that “friends” or “fans” of those brands will more than double in the next year. By 2015, China will overtake the United States in terms of online sales.
With regard to offline sales, online research heavily influences those, according to 67 percent of interviewees from Europe, 63 percent of those in China, and, 50 percent of Americans surveyed. The purchases of 27 percent of Europeans and Americans, and 58 percent of Chinese consumers were influenced by fashion blogs, while 33 percent of Chinese, 26 percent of Americans, and 20 percent of Europeans were swayed by Facebook posts. Additionally, an overwhelming percentage of consumers—78 percent of Chinese, 56 percent of Europeans, and 46 percent of Americans—shop online to avoid salespeople.
Altagamma’s advice to brands looking to compete: Think and act across a variety of channels, and be prepared to master new tools (Facebook, YouTube, etc.), performance management systems, and skills.