Last year, sales of Louis Vuitton products on eBay reached US$ 60 million, while sales of Rolex on the same online auction website recorded more than US$ 1.5 million per month.
The sale of luxury products in customer-to-customer online marketplaces such as eBay or Amazon.com has become an inevitable phenomenon that demands radical action. So, brands are choosing their camps. Some are deciding to fight, taking legal action against these sites, while others are beginning to consider the “Wild West” of the Internet as a new sales frontier. This is the case of Tourneau, a watch retailer that has partnered with Portero, a website specializing in the sale of luxury products. Tourneau is certifying the authenticity of each of the watches sold by Portero, brands are also sold by Tourneau.
Aptly named the “certified pre-owned program”, like the guarantees that were already being offered by the car brands Mercedes-Benz and BMW starting in the 1990s, this arrangement reassures online buyers, and seems to be the right road towards building confidence in the online sales of luxury goods. According to Tourneau, the most classic products are those whose value diminishes the least, while the very trendiest or in-vogue products lose their value quite quickly.
Alain Carnet, Director of Ax Distribution, has been importing and selling watches on eBay since 2002. He uses eBay as a direct distribution channel to reach the public at large. According to him, this channel is ideal for finding clients outside of one’s area, as well as for streamlining accounting processes, email management and payments (PayPal). However, the market seems currently to be saturated with a supply that is clearly greater than the demand. Carnet indicates that between 1,000 and 2,000 watches were for sale on the site two years ago, while today there are between 7,000 and 8,000 timepieces looking for buyers.
He cautions prospective sellers: “It is not easy to sell new products on eBay because buyers are looking for low prices. It is also necessary to carefully choose the emphasis options, without which there is practically no chance of selling the item. It costs a lot to place an item on the front page of a category or in the gallery, and there are numerous products on the front page. In any case, the item must appear on the first page of the search results. In terms of products, to sell an item on eBay, in other words, via a thumbnail image and a description, it is necessary to offer more spectacular products, for example, watches with original functions, a transparent caseback, a catchy look. The products must also have a significant profit margin since the use of the online platform requires fees and management time. Finally, the seller must try to have a beginning price that is not too high, in order to entice the buyer to bid, as well as to avoid having to pay high listing fees. If the beginning price is too high, potential buyers will wait and only bid at the last minute.”


Study: Women to help spike online jewellery sales

SEPTEMBER 19, 2005 - Cambridge, Mass. An increase in the number of female shoppers will
contribute to 14 percent of jewellery sales moving online by 2010, according to a new forecast from Forrester Research released Monday.

Last year, it was estimated that 5 percent of jewellery sales were occurring online, according to experts consulted for NATIONAL JEWELER's $100 Million SuperSellers supplement.
But jewellery is just part of a retail online picture which is growing even faster across the board, according to Forrester. Thanks to innovations that will make online shopping simpler and more engaging, online retail sales will nearly double within five years; from $172 billion in 2005 to $329 billion in 2010, according to the report. That increase includes a 14 percent compound annual growth rate over the next five years.
“Businesses are debating their online strategy. Many believe they became too focused on sales. Now they're looking at their Web sites as a way to drive in-store traffic and increase their engagement with customers,” said Forrester Research Vice President Carrie Johnson in a release. “This is a huge shift in philosophy, as e-commerce enters a more sophisticated phase. But it's also creating tension, as CEOs demand return on investment (ROI) for expensive Web sites with hard-to-define metrics, such as loyalty and brand.”
Since more and more mainstream consumers are already shopping online, retailers are investing in improved online shopping experiences by using state-of-the-art technologies, such as sophisticated analytics and personalization tools.

Other highlights from the Forrester report:

 E-commerce will represent 13 percent of total U.S. retail sales in 2010.

 Travel remains the largest online retail category, growing from $63 billion in 2005 to $119 billion in 2010.

 General merchandise (all retail categories, excluding food and beverage, auto and travel) will top $100 billion for the first time in 2005.

 Online sales of health and beauty products will grow at an annual rate of 22 percent.

 Twenty-nine percent of small appliance sales will migrate to the Web by the end of the decade, as a generation that grew up with the Internet marries and attends weddings.

 Categories showing significant growth (i.e., growth outpacing the overall 14 percent compound annual rate) include: apparel, consumer electronics, health and beauty, food and beverage, home products and sporting goods.

The $329 billion Forrester projects for online retail sales for 2010 represents a minor downward adjustment from its 2004 forecast of $331 billion, due to recent softness in overall consumer spending.

For more details, visit: www.forrester.com


Second-quarter eBay watch and jewellery sales dip

JULY 21, 2005 - San Jose, Calif. Sales in the watches and jewellery category on eBay dropped slightly in the second quarter of 2005 compared with the first quarter, but still showed year-over-year gains.

The online auction house handled $1.5 billion worth of gross merchandise volume in jewellery and watches for the second quarter ending June 30, 1 percent less than in the first quarter of the year but 27 percent more than in the second quarter of 2004, according to an eBay statement released Wednesday. Overall, eBay's net revenues for the quarter totaled $1.09 billion, 40 percent more than for the same period last year.
U.S. marketplace net revenues for the quarter amounted to $423.6 million, rising 27 percent year-over-year.
The company reports that it had 64.6 million active users worldwide in the past 12-month period, a 34 percent increase over the same period the previous year. For the second quarter, eBay facilitated 440.1 million listings, 32 percent more than it handled in the second quarter of 2004.



Source: October - November 2005 Issue

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