Luxury baubles and bags are finding a strong domain in cyberspace.
Prices for designer handbags are up, luxury watches and fine jewelry are having their moment in the sun, and, according to several e-commerce Web sites specializing in premium accessories, consumers aren't hesitating to buy these goods online.
Ankur Daga, a Harvard Business School graduate and founder of Angara.com, an e-commerce business specializing in diamond and gemstone jewelry, said the site's main business was engagement rings. Angara offers custom engagement rings and other jewelry categories at prices generally 35 to 50 percent cheaper than at traditional retailers. The average engagement ring sale on the site is about $15,000, Daga said.
Prices would be significantly higher with the overhead of a traditional store, which is why Daga never plans to open one. The value of the site's inventory exceeds $180 million.
The target customers earn $125,000 or more a year, are between 25 and 35 and are Ivy League alumni. Angara advertises in the alumni magazines of Harvard, Yale, Princeton and Stanford.
"When I was in school, a lot of people were looking to the Internet to buy jewelry, which is 25 to 50 percent off of Tiffany or Cartier, but the quality was not as high," said Daga, whose family is in the gemstone business.
Many of these jewelry sites, including Angara and Bluenile.com, sell their diamonds with certification from trusted sources such as the Gemological Institute of America.
Angara offers pieces such as baby jewelry for $100 or diamond stud earrings as low as $525, but prices for the heftier pieces, like a South Sea pearl strand with diamonds or a collar made from cushion-cut yellow diamonds, can climb to hundreds of thousands of dollars. The site also features a collection of rare diamonds in colors such as red and orange.
Daga said he would meet in person with customers who wanted to see merchandise firsthand in his Manhattan salon. This month, the firm is introducing a visual chat program via Web cam in which a consumer can interact with a salesperson. Also, the jewelry is photographed with a special camera that shows intricate detail.
Also tapping into the trend is Portero.com, an auction Web site that offers used art, watches and fine jewelry. Portero.com will launch an accessories segment next month selling used handbags from luxury houses such as Hermès and Chloé, and writing instruments from Montblanc and Cartier.Portero.com chief executive officer Michael Sheldon said consumers were willing to spend tens of thousands of dollars online without trying on or even seeing the objects in person.
"I'm surprised that [people] aren't doing it more," he told WWD. "We're at an interesting time in history. People actually do buy a lot. The key to the transaction is trusting the other side."
Some industry watchers are skeptical. One said that sites often highlight a select few over-the-top items to pique consumer interest, akin to what luxury retailer Neiman Marcus does with its holiday catalogue that features items like his-and-hers camels or submarines. Then there's discount retailer Costco, which offers a 3-carat yellow diamond ring for $39,999.99 on its Web site.
"Branded jewelry can do well on the Internet," said Carol Brodie, chief luxury officer of CurtCo Media, which produces the Robb Report and other luxury-oriented publications. "But an educated consumer who wants to buy something that's one-of-a-kind and more rare that is unbranded will go to their jeweler to buy it. While GIA certification is so important, you can't see the brilliance, the fire or the beauty of a diamond on it. You can only read about it on the certificate."
On the accessories side, pricy designer bags and shoes are bringing in sales at sites like Net-a-porter.com and eLuxury.com.
"[Accessories] is definitely a growing business in general," said Holli Rogers, head of retail at Net-a-porter, which has been in business almost seven years. "We've seen it dramatically rise in the past two years."
Cult styles once considered fashion insider items, such as $720 Christian Louboutin platform sandals, are hard to keep in stock.
"There doesn't seem to be any price resistance,'' added Rogers, who said the firm had plans to beef up its accessories business by adding new designers. "Our customers are fashion customers. When they want something, they just buy it. It's always good to add to your mix."
Rogers said consumers also flocked to buy what was in the ad campaigns of designers because they were already so familiar with those runway looks.
As accessories prices have skyrocketed, some say that being able to ponder a purchase on the Internet without the pressure of a salesperson is a benefit.ELuxury.com, which sells handbags, shoes, belts and higher-priced items like Dior fine jewelry designed by Victoire de Castellane, agreed with Rogers.
"When it's a showpiece, it sells regardless," said Sarah Logan, buyer at eLuxury.com, referring to a $5,190 Fendi handbag that was showed on the brand's spring runway. "We're able to show detail, so you can look at an item more closely."
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