At our Year in Review breakfast event at Crosby Street Hotel in New York, our Head of Research & Advisory Maureen Mullen made a reference to how far luxury brands have come in embracing the internet. In 2007, Richemont Chairman Johann Rupert said that none of its portfolio companies would ever sell online. In 2010, the company acquired Net-a-porter at a valuation of $533 million.
Watches and Jewelry brands have been among the slowest to embrace digital. Now more than half of the 28 Watches & Jewelry brands we studied since 2010 sell online. Of the 80 brands featured in our 2013 Digital IQ Index: Watches & Jewelry report, 96% are present on Facebook.
Today’s game-changer of the luxury and retail space is Amazon. With a market cap of approximately $177 billion and a desire to become a main destination for all product categories, Amazon can be seen as a threat to the business of luxury brands. Some have chosen to cooperate with Amazon instead of resisting. Nars, for example, is one of the first Beauty brands to place its products on Amazon and make them available for Prime shipping. There is room for debate about whether the everything store can succeed as a fashion and beauty retailer, but a look at the past offers a reminder about the inevitability of embracing change.