A fresh crop of sophisticated Web. 2.0 sites are courting the high end with renewed vigor.
The luxury industry’s experience with the Internet should be counted in dog years: For every seven years of Web-based progress in other fields, luxury providers have inched along by just one.
Look, for example, to the online jewelry market, and you’ll find that for most of its lifespan it’s been the domain of schlock merchants, con artists and loose stone dealers eager to dispense with the fripperies of romance in favor of promoting goods at bargain-basement prices.
Just consider this quote from Jim Schultz, founder of DirtCheapDiamonds.com, which appeared in an article in CIJ sister magazine, National Jeweler, seven years ago: “DirtCheap is doing so well because we have a practical attitude,” he said. “We don’t romance the stone. Because we’re not face-to-face with a customer talking about a stone, we’re just looking at the facts. I think people appreciate our candor.”
While it’s true that price — and, more meaningfully, value — continues to be critical to the allure of buying luxury products online, the notion that e-tailers eschew story, tradition and a commitment to service has gone away as surely as Facebook has replaced Friendster in the social networking sphere. These days, the Internet is, without doubt, home to the jewelry industry’s most promising action.
“[We’ve made] the empirical case directly from the voice of the wealthy consumer for luxury brands to make their Web sites the centerpiece of their online and offline strategies since 2006,” says Milton Pedraza, CEO of the New York-based Luxury Institute. “Nevertheless, the traditional luxury industry has been slow to adopt Web 2.0.”
The term “Web 2.0” refers to changing trends in the use of Internet technology and design that strive to enhance creativity, communications, secure information sharing, collaboration and functionality.
Pedraza notes, “Innovators such as Gilt, Ideeli, A Small World, Portero, Vivre, CoutureLab and several off-the-radar players such as Bespoke Global, are gaining traction online via membership models, global communities, and by aggregating categories of bespoke luxury designers and producers in one-stop-shop destinations.”
This phenomenon is bound to grow. In light of the faltering global economy, more old-school jewelry merchants are adopting Internet-only policies, thereby ducking the enormous expenses associated with running brick-and-mortar operations.
“We’ve got Madison Avenue products with the value only an online store can offer,” says Pinny Kaufman, a New York diamond wholesaler who recently launched Idalia.com, a luxury fashion jewelry site aimed at female self-purchasers. “I don’t feel anyone’s targeting this niche. The industry standards are mall-type Web sites.”
The real deal: Plenty of Web consumers are wary of shopping online due to questions of authenticity. To battle the thriving online knock-off market, Portero.com carefully vets its products to guarantee their genuineness. At Idalia.com, the focus is value: “Madison Avenue products” at online prices.
For guidance, Kaufman studied the Web’s luxury visionaries, Net-a-Porter and Vivre, two sites that established, early on, reputations for expertly curating collections of high-end designer goods, from fashion to accessories to home décor items, that appealed to discerning shoppers precisely because they fused the experience of browsing a luxury print catalog with the Web’s user-friendly technologies.
“The two together blend to form a potent mix that’s hard to resist,” wrote The Luxe Chronicles in a February 2008 blog post praising both Net-a-Porter and Vivre. “I’ve often compared shopping on these sites to shopping directly from the pages of your favorite print magazine, only better.”
More recently, CoutureLab, a next-generation version of Net-a-Porter (given that its owner, Carmen Busquets, was one of the latter’s original backers), has charmed luxury consumers with its chic selection of one-of-a-kind and limited-edition designer merchandise, sourced from around the world. No small part of the two-year-old site’s appeal lies in its crisp photography, stylish layout and engaging content, like the bios describing each designer represented on the site — including jewelers such as France’s Lydia Courteille, Spain’s Vicente Gracia and Kenya’s Carolyn Roumeguere.
For purposes of Web site marketing and search engine optimization (“SEO” in Web 2.0 lingo), the content quotient is key — a fact that Beladora, a two-year-old estate jewelry site based in Beverly Hills and affiliated with estate dealer Kazanjian Bros., has used to its advantage. “We’re creating content that makes our site useful and helps the Google rankings,” says CEO Nancy Revy, adding that a flexible approach to pricing (read: no triple-key markups) and reliable customer service are the site’s strong suits.
“What’s amazing about this business is the amount of trust you build up with people who have never heard of you,” Revy says. “How do you instill confidence online? We respond to every e-mail and call within 24 hours. We are literally a 24/7 shop.”
At Portero.com, the secret to establishing customer loyalty is a fanatical devotion to authenticity. Launched in 2004, the company was one of eBay’s largest sellers of pre-owned luxury timepieces and handbags until its founders decided to create their own site in 2007, in part to escape the suspicions that seemed to taint the online marketplace, said Stephanie Pfair, the company’s outgoing vice president of merchandising.
“For a long time, online was considered the breeding ground for counterfeiting and the easiest way for counterfeiters to disseminate their product because it’s anonymous and accessible,” Pfair said. “Portero was created with the idea there could be a legitimate secondary market for authentic luxury products online, giving customers all the benefits of online — price and value — without fearing counterfeits.”
Even the Place Vendôme luxury brands are getting in on the game. One-hundred-and-fifty-year-old Boucheron, for example, recently announced that it was extending its e-commerce operations to the United States. “Because Boucheron has always underlined elegance with a touch of audacity, it today turns toward investing in the Internet and the opening of a new online store,” CEO Jean-Christophe Bédos said. “The Web is a modern opportunity to be present worldwide and an answer to Boucheron’s goal to take service to its clients one step further.”
A clarion call to other luxury providers to unambiguously embrace the Web’s possibilities? You bet.
“Look for all types of traditional luxury goods and services providers to begin to imitate the techniques of these luxury innovators, or to acquire them,” Pedraza predicts, referring to sites such as CoutureLab. He even goes so far as to tout the nascent field of “m-commerce,” or transactions conducted via mobile devices like iPhones and Blackberries, as the next big development in luxury marketing.
In other words: e-tailers, start your (search) engines.
Tactical moves: CoutureLab’s magazine-like approach to content has made it a hit among the fashion cognoscenti. For estate dealer Beladora, a commitment to answering calls and emails within 24 hours has helped convince shoppers that there truly is a person at the other end of the line.
