Will eCommerce platform BlinQ be able to save luxury retail?
In the first part of eTail’s special series on Luxury Retail in Coping with COVID-19, we speak with Bob Chua, Founder and CEO of luxury fashion online marketplace BlinQ, a leading FashionTech enabler in the AR and eCommerce space, focused on the Southeast Asian markets.
In an age of fast changing trends, luxury brands have started to keep an eye on several factors in terms of global expansion, community, digital technologies etc. 2020 was supposed to be a breakthrough year for personal luxury, having achieved a 4% growth reaching €281 billion in 2019 [Source: Bain & Company]. This growth was set to continue as luxury brands redefine their purpose to reflect societal shifts.
However, with the outbreak of a pandemic, this could make for a bumpy road in the short term with a change in consumer’s mindsets and value of luxury goods underpinning their buying decisions.
“Covid-19 has been the black swan of black swans to have hit the Luxury industry; be it retail, travel, hospitality or fashion.”
With a bleak outlook, Bob feels fellow brands and retailers have started to reel from a shocking obliteration in supply-chain, store closures, and consumer demand. Some luxury retailers have found themselves needing to slash prices to keep inventory moving and offer free shipping to weather the storm.
Fast forward to 2021, Bob shares 3 main pillars that will allow the industry to get back on its growth trajectory for the long run.
“The Supply-Chain for luxury (specifically luxury fashion) will need to get moving again. Whether that involves manufacturers in Milan, Cambodia, Bangladesh or China, we need to get the eco-system back up and circulating in order to get goods manufactured and fulfilled.”
“Demand is a manifestation of sentiment. Discretionary spending for luxury will take time to re-activate, as people will re-evaluate their financial situations, as well as ability to once again splurge on a relatively un-essential part of our daily lives.”
“China now represents more than 55% of luxury consumption as well as revenue for some of the largest luxury groups globally. There is no doubt that it is in the industries best interest to have China return to its optimum GDP levels, which will be a bell-weather for the rest of the industry, as well as global trend.”
In fact, China has been a growth driver in the luxury industry in recent years despite political volatility and financial crisis. This drop of Chinese tourists during the pandemic is bound to affect the overseas luxury market. Would luxury brands bounce back once the pandemic ends?
“The impact of the drop in Chinese tourist has been felt as far away as the lobster divers in Australia, to the souvenir shops in Hampton Park, UK. It is a matter of when borders will start to re-open, and some form of normality in terms of global tourism returns when we may see a shift of travel and consumption behaviours change. There is no doubt however that whichever curve we may see as a recovery, the Chinese consumer will come back in great force. So it’s in our best interest to be prepared to meet this pent up demand…whenever that may arise.”
Aside from waiting for operations to go back to normal, luxury brands have to try to reverse their sluggish sales by planning ahead as Bob mentioned. More and more people are starting to make purchases online due to lockdowns and even avoiding physical shops or crowds. Such a change in behavior might become a norm, and brands need to develop and execute an online and omnichannel strategy to connect and engage with consumers. Also taking into account the attitudes of current and future consumers whom are more digital savvy, they expect to interact with and buy from luxury brands through a variety of digital channels – demanding convenience and ease of purchase.
The “right” digital presence may differ from brand to brand but what is certain is that right now they get to monitor these impacts closely, and scale up effective approaches quickly. Does this mean eCommerce will be able to rescue luxury brands?
“I’m slightly biased, as I operate a Luxury Fashion Marketplace; www.blinq.fashion which has always driven this quest. From a technical and futurist standpoint however, I would say ‘most definitely’. Retail will change forever, as will online learning, remote working, online fitness etc. There has to be that equilibrium in how we manage how we consume luxury, and if tech companies can provide a similar if not better user-experience then walking into a store, such an asset-light model will be a way of the future. Amazon and Alibaba has lead the way, followed by niche eCommerce players such as Farfetch, ASOS etc. so the writing’s on the wall. Those who fail to disrupt, will ultimately be disrupted.”
In today’s competitive environment, we can learn it is not OK to be good at just one thing; you have to constantly reinvent and provide unique services or exclusive offerings to stay ahead. The true essence of luxury is not dependent on product features alone but driven by intangible factors like value creation. If brands do not adapt to the direct needs of the customers, they will be at risk of losing out to their competitors. After all, we would not want customers to forget about us while they are cooped up at home during this pandemic.
Getting to know Bob
- 1. What are you searching for online in isolation?Browsing sites for new bikes, cars and watches. Using TOR anonymous browser so my wife doesn’t find out.
- 2. Which food would you ‘deliver/takeaway’ most often in this period?I’ve been cooking a lot during this lockdown. In fact, cooking too much. Yesterday I ordered some frozen Wagyu’s which I plan to BBQ later on today, to my neighbours dismay.
- 3. First thing you would want to do immediately once the circuit breaker/lockdown is lifted?Get a haircut, then play a 36 hole round of golf.
- 4. Lesson learnt/quote to get you through this period?Use this time productively.