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The Super-Rich Are Buying Luxury Online Like Never Before

Christie’s auction house has launched its worldwide “Luxury Week” | Source: Courtesy
Christie’s auction house has launched its worldwide “Luxury Week” | Source: Courtesy

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 this year is a loose designation, given that some of the sales have already started, and many last through mid-December.)

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

Last year, Christies 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 percent increase.

“It’s just a response to the market,” Ervin says.

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

Meanwhile 1stDibs, the online platform for high-end furniture, art and jewellery, has seen gross merchandise value rise year over year by 30 percent for the 10 months since Covid-19 hit. And in the last two months leading up to the holidays, “we’ve seen an acceleration in growth,” says David Rosenblatt, 1stDibs’s chief executive officer.

It’s not just the number of online auctions that have risen. Buyers’ price threshold has 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.”

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 percent 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.

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 behaviour has changed dramatically, overnight,” says Rosenblatt. “We’ve seen 10 years of digital adoption over the last 10 months.”

Buyer behaviour has changed dramatically, overnight. 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 between $200,000 and $250,000, or (and?) a 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 a quarter-million dollars can bid in its online jewellery 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.

Alternately, if someone has lost out on the “Himalaya” Birkin at Christie’s, they can take a crack at the same, slightly smaller version of the bag—this one from 2010—which is offered at Sotheby’s for $260,000 to $300,000 in a sale that closes a day later.

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 another 47 carats of multi-shape diamonds. They can have it shipped express for an extra $100, according to the site.

For a holiday surprise, they can buy a $365,000 Victorian fire screen filled with taxidermied hummingbirds. (Disclosure: sales tax will run you more than $32,000.)

All of 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.”

By James Tarmy.

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