The Super-Rich Are Buying Luxury Online Like Never Before
A person shops on an online website partnering with Amazon.com (Photographer: Michael Nagle/Bloomberg)

The Super-Rich Are Buying Luxury Online Like Never Before

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Mass market retailers aren’t the only ones betting on a banner online holiday sales season.

Christie’s auction house has launched its worldwide “Luxury Week” with beefed-up offerings to meet this year’s record demand. (“Week” is a loose designation this year, given that some of the sales have already started, and many will last through mid-December.)

“This year we’ve seen a 200% increase in the number of [online] sales” for November and December, says Caroline Ervin, a head of e-commerce for Christie’s jewelry department.  

Last year, Christie’s hosted just four online-only luxury sales in the same November-December stretch. Those sales carried a high estimate of about $9.5 million. This year, there will be 12, with a total high estimate of just under $40 million, a 322% increase. “It’s just a response to the market,” Ervin says. 

Sotheby’s, which is hosting its own live, online December luxury sales under the heading “The Festival of Wonder,” has already quadrupled its year-over-year volume of online sales; it quintupled its total sales, which currently stand at $150.5 million, according to the auction house. Of that amount, $79.7 million has gone to online jewelry sales—nine times greater than last year—and $41.95 million, has gone to watch sales, five times as much as in 2019.

The Super-Rich Are Buying Luxury Online Like Never Before

Meanwhile 1stDibs, the online platform for high-end furniture, art, and jewelry, has seen gross merchandise value rise year over year by 30% for the past six months. Especially in the two months leading up to the holidays, “We’ve seen an acceleration in growth,” says David Rosenblatt, chief executive officer at 1stDibs. 

It’s not just the number of online auctions that has risen. Buyers’ price thresholds have shot far beyond anyone’s expectations.

“Historically, we’ve viewed [the ceiling for] sales as $20,000,” Ervin says. “We wanted to offer a few higher-value lots in each sale to see how clients responded, and [then] it boomed.” 

The Super-Rich Are Buying Luxury Online Like Never Before

Before 2020, an online-only sale for a single lot at Christie’s had topped $80,000; this year, 25 sold for more than $100,000. One of those lots was a 28.86-carat diamond ring that sold for $2.1 million.

At 1stDibs, the gross merchandise value for sales of objects over $100,000 are up 60% year over year, says Rosenblatt. “Demand has risen for everything we sell.”

Changing Overnight

Online luxury sales had been ramping up for some time as consumers became more comfortable with buying used items online, and auction houses and other resellers explored strategies beyond the traditional high-touch model of live sales. 

The Super-Rich Are Buying Luxury Online Like Never Before

Once the shutdown became a several-month-long reality, luxury resellers discovered, to their genuine surprise, that people were more willing to spend than ever. “Buyer behavior has changed dramatically, overnight,” says Rosenblatt. “We’ve seen 10 years of digital adoption over the last 10 months.”

That’s in large part because these companies have refined their understanding of what can and will sell without an in-person viewing.

“A lot of it is truly click, then buy,” says Ervin. “Part of that is what we choose to put online. We won’t put something that’s high value and needs a lot of research. We tend to offer signed pieces, so you know the brand name and might know the design already.”

Stocking Stuffers

At Christie’s, wealthy buyers can bid online for an Hermès “Himalaya” crocodile Birkin bag made with white gold and diamond hardware, estimated from $200,000 to $250,000, and an 18 karat pink-gold Patek Philippe chronograph watch manufactured in 1950, which has an estimate of $400,000 to $600,000. 

At Sotheby’s, someone with a holiday budget of about $250,000 can bid in its online jewelry sale on a diamond ring with a 5-carat, cushion-cut diamond flanked by .8 carats of heart-shaped diamonds on a platinum band; the ring carries an estimate of $150,000 to $200,000.

Should someone lose out on the “Himalaya” Birkin at Christie’s, they can take a crack at a slightly smaller version of the bag—this one from 2010—being offered at Sotheby’s for $260,000 to $300,000 in a sale that will close a day later. 

The Super-Rich Are Buying Luxury Online Like Never Before

1stDibs goes even higher.

A wealthy person looking for a pick-me-up might find encouragement in a $2.35 million, 35.31 carat, yellow diamond necklace surrounded by a further 47 carats of multishape diamonds. They can have it shipped express for an additional $100, according to the site.

For a holiday surprise, the shopper could buy a $365,000 Victorian fire screen filled with stuffed and mounted hummingbirds. (Disclosure: Sales tax will run to more than $32,000.)

All this, specialists say, is an attempt by retailers to meet a demonstrated demand for high-value e-commerce.

“This fall, leading up to these sales, we were having such a high sell-through rate that we’ve increased the number of lots offered,” says Ervin. “Someone is increasing their buying for sure, because we’re offering more lots, and we’re still selling those lots.”

©2020 Bloomberg L.P.

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