As e-commerce has continued at a steady pace, diamonds and even homes are among the offerings in e-commerce, which has reached 6.3 trillion by the first quarter of 2023. Technology has made it easy to shop for anything – recall the days when selling 20-lb. bags of pet food online seemed far-fetched, not to mention diamonds and other expensive items including big brands like Gucci and Prada that are easy to ship but expensive to buy.
Diamonds and luxury jewellery
Online demand for fine jewellery and diamonds dates back to the start of the e-commerce frenzy when online jewellery brand Blue Nile appeared on the scene. The company quickly established a reputation deeply rooted in ethical sourcing of diamonds.
The company was taken private by an investment firm in 2016, according to a CNBC report, and Blue Nile officials entertained a merger deal with Mudrick Capital Acquisition Corp. in a move that would have enabled the company to go public. However, early in 2022, Blue Nile sold to Signet Jewellers (SIG), the parent company of jewellery retailers Zales, Jared and Kay Jewellers, in a $350 million cash deal.
As sales of diamonds dipped around 2015, online retailers scrambled to satisfy a generation of sceptics who wanted more assurance of quality before they purchased. The use of AI was deployed by tech company Rare Carat to help buyers make more informed decisions about diamond purchases.
Online diamond retailer JamesAllen.com developed a digital business structure that combines the sale of loose and set diamonds, gemstones, and other fine jewellery items using innovative technology. The company displays their certified diamonds with 360-degree HD video and offers real-time diamond inspections.
Publicly traded high-end department stores like Macy’s (M) have seen market stability due in part to online jewellery sales, including luxury watch brands Versace and Longines. Danish jewellery brand Pandora (PNDZF), best known for a wide variety of charm bracelets, has also had a strong online presence.
Homes are another item that sells well online. A study commissioned by Seattle broker Redfin (RDFN) revealed almost two thirds of all homebuyers in 2020 purchased their home without even seeing it. The trend continued through 2023 according to the company, with about 1 out of every 10 requests to agents asking for a virtual video tour rather than an on-site visit. Online homebuying has helped boost the company’s stocks through the last two years.
Online real estate marketplaces Zillow Group, Inc. (Z) and Realtor.com under parent company News Corporation (NWS) can connect a buyer to an agent, get a potential buyer pre-approved for a mortgage and show listings complete with 3-D video tours in a matter of hours.
Real estate firm eXp Realty also caters to those looking for cloud-based homebuying. The Bellingham, Washington company has had a global search growth of 237% over the last five years. Newcomer Originpoint, a private joint venture between Guaranteed Rate and Compass Real Estate, is another must-watch company after the announcement in March 2023 that prospective buyers can secure a home loan approval online in less than 24 hours.
Fine art and NFTs
Fine art is another high-ticket item that has a large digital following and steady e-commerce sales. The global online art market reached $11 billion in 2022. Well-known online auction sites Sotheby’s and Christie’s both run platforms for bidding on high-value artwork, with an average selling price of $64,000 and upwards of $100 million for some pieces. The artwork for sale through the two auction sites is traditionally only available for sale in art galleries and auction houses around the world.
The last five years have introduced a new dimension in fine art to the market – non-fungible tokens (NFTs). Both Sotheby’s and Christie’s include NFTs on their auction sites. In fact, Beeple’s “The First 5000 Days” sold at auction in March 2021 for $69.3 million through Christie’s site.
Privately-owned SuperRare is quickly becoming a rising player in the cryptocurrency space with a curated marketplace of unique NFT digital art. Artnet is another company to watch with its marketplace that offers both auctions and fixed-priced art sales. At one time, Artnet traded publicly before going private in the 1990s. The company has said they are considering returning to public trading in the future.
High-end designer clothing
High-end designer clothing by the likes of Gucci, Prada, and Chanel has also made a solid showing online through upscale department stores like Neiman Marcus, and Saks Fifth Avenue. In fact, almost any high-ticket item you can think of has likely been sold via e-commerce as consumers have become more comfortable shopping and doing business online since the early dot com boom days.
With a market value expected to reach $74.4 billion by 2027, luxury fashion is being driven by standout companies such as Farfetch Limited (FTCH). The company has seen substantial growth and analysts predict the stock to be a strong buy. Farfetch recently announced a movement that would create a consolidated luxury grand platform with Yoox Net-a-Porter and the company’s parent Richemont. The announcement of the deal, which is expected to complete by the end of 2023, resulted in rising stocks for both companies.
It’s just one more indication of the promise of high-ticket e-commerce.
Courtsey - Nasdaq.com