Luxury is a relative term and hence its usage in this article is based on my personal opinion – representative of the middle class – as a both seller and buyer of luxury.
Exploring the prospects of “disruption” in jewelry industry, I was intrigued by the viability of business models centered on digitization and its effectiveness to change lives of luxury buyers for better.
The world market has gone live with technology forcing every business to modify its operating models for survival. From stationery to home decor, cologne bars to Lindt bars – everything new or old is bought and sold live 24×7. These are standardized commodities for mass consumption.
Traditionally, the luxury goods market has operated against the usual forces of marketing and economics of price. No direct selling to target market, higher the price higher the demand, etc. Accordingly, Luxury is not comparative and certainly not positioned to sell at cheap.
As you widely agreed, three factors largely govern the business of selling luxury – Trust, Touch & Feel, and Exclusivity.
Firstly, as per market research of customers across geographies, Trust is still the biggest criteria for selection of a jeweler. Secondly, it is interesting how any woman, would love to adore her look in the majestic diamond necklace before shelling out tens of thousands of dollars in name of the jeweler. The customer is emotional about the diamond purchase thereby demanding human interface in selling. Lastly, we well understand, luxury by definition is rarity. Diamonds and gemstones of specific color, cut, clarity command their value for it isn’t everyday that you possibly dig out that exclusive combination from mother earth. If the earrings you wore at Ria’s cocktail party is the same in design to what Ria bought from xyz.com, would you still value the jewelry piece equally? Would that still be luxury?
Luxury is not mass market. Luxury is not a commodity and hence never an impulsive purchase. For, luxury is all about an experience for the buyer.
To the men, I ask you – would you buy the long awaited Vento online? Or maybe the TagHuer watch that you have been saving for a while? Yes, they would come with guaranteed certificate of authentication and the other frills offered on online purchase.
To the ladies – would you let your fashion be a commodity available with a mouse click? or a statement defined by your exclusivity in selection?
..and let this not be an MBA answer of “it depends” 🙂
Awaiting your thoughts/comments/reactions.