The pandemic might have restricted international travel but it didn’t stop the luxury connoisseur from picking up their favourite Hermès bag, Armani suit, or the most-adored MF Hussain painting. Thanks to the extra attention on communication, customisation and marketing strategies, luxury brand sellers have managed to push sales and drive growth throughout 2021.
With renewed focus on digital messaging and video-assisted sales, the Indian luxury market has grown in double digits even amid a pandemic.
The Collective, for instance, which retails over a hundred international luxury brands in India, such as Versace, Prada, Paul Smith, Ralph Lauren, Ted Baker, Karl Lagerfeld, and others, managed to bring in a 3.5 percent growth in revenue in 2020 (against 2019).
Topical marketing with messages woven around the reality of the consumer has been the key focus for The Collective that is owned by Madura Fashion and Lifestyle, a division of Aditya Birla Nuvo Ltd.
“The reason why we could grow was because we managed to continue our relationship with our customers right from the beginning [of the pandemic]. From talking about our brands, our products to churning out music playlists for relaxation, we’ve done it all for our customers,” says Amit Pande, brand head, The Collective and International brands.
Personalisation of experiences
The team also deployed Partner Relationship Managers (PRMs). All top customers were assigned one personal relationship manager who has complete knowledge of the customer’s size, colour preferences, and lifestyle.
“With the PRM, we could curate collections for each of our customers, which they were given access to online. Once they liked a product, they could check it out on the website and place orders. We made sure we delivered it to their homes irrespective of their location,” Pande adds.
The first such order through a personal relationship manager in Delhi was placed from Visakhapatnam, where The Collective doesn’t have a store. The Hugo suit ordered by the customer was shipped to him from Mumbai.
Upbeat about growth, the brand is spending generously on digital advertising and is also on an aggressive expansion spree. The luxury retailer is exploring new geographies to expand and, from 26 outlets presently, they are looking at a 50-60 store network in the next two years.
However, it is not just The Collective that focused on pushing online sales and personalised services. Most other premium brands in the segment followed the same hack.
“During the initial days of the pandemic, we called our customers and, if they wanted to try a product before purchasing, we made sure the services were activated. The customer experience was still kept at the maximum and since it could not be at the storefronts, we planned to do it at the customer's home,” says Tushar Ved, president, Major Brands (India) Pvt. Ltd that retails international brands such as Charles & Keith, Aldo, and now Victoria’s Secret in India. From a meagre contribution of 4 percent sales generation, digital sales have shot up to 30 percent for Major Brands.
Another fine jewelry brand, Fabergé, also took the same route.
“From keeping our clients updated with individually tailored newsletters and stories, to hosting Zoom ‘By-Appointment’ meetings, we were able to continue the high level of service that our clients expect,” says Josina von dem Bussche-Kessell, global sales director, Fabergé.
Luxury at home
Sales and revenue in the category have been more than impressive in periods of repeated lockdowns, curfews, and travel restrictions.
According to financial data accessed by business intelligence platform, Tofler, for Christian Dior Trading India Private Limited, the income from operations for the year ended March 31, 2021, stood at approximately Rs 87.3 crore against the previous year’s income of about Rs 57.1 crore.
The last numbers available from Louis Vuitton India Retail Private Limited show no reds. For the year ended March 31, 2020, the gross income of the company was Rs 285.52 crore against Rs 245.29 crore in the previous year.
Turns out, according to market and consumer data experts Statista, revenue in the Indian luxury goods market amounts to $5,943 million in 2021. The market is expected to grow annually by 8.03 percent (CAGR 2021-2025).
The numbers do not just indicate the growth of the brands in the country but also the spending capacity of the Indian luxury buyer.
According to the Knight Frank Wealth Report 2021, Asia topped their five-year UHNWI (Ultra High Net Worth Individuals) growth forecast with 39 percent, led by Indonesia at 67 percent and India at 63 percent.
The wealth growth forecasts in the same report predict India’s threshold in the category to almost double over the next five years.
Interestingly, the growing spending capacity is also pushing the price of luxury items up. Especially artwork.
“There are more buyers than artworks available in the market,” says Lavesh Jagasia, founder and managing director at Dubai-based auction house Artiana. “Since people stayed mostly indoors in the last two years, they got a chance to introspect on how they’d want their homes to be. Especially those who have an eye for exquisite artwork used the time to procure the rarest of rare works at premium price,” Jagasia says.
Artiana’s two biggest sales were to an Indian buyer who bought Sakti Burman’s artwork Reve for Rs 2.5 crore, and Francis Newton Souza’s work Landscape with Tree for Rs 4 crore.
The thoughts and opinions shared here are of the author.
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