The Value of High-Value Goods: E-Commerce’s Next Big Bet
Throughout the pandemic, we witnessed a massive surge in e-commerce and acceleration in digital transformation by many companies that had been, up until then, slow adopters. Online ordering for everything from groceries to toilet paper to fitness equipment and home office furniture became the norm — and has only recently slowed down after businesses were finally able to reopen. Of course, e-commerce isn’t new. We've been able to buy things online for decades, but once people were forced to rely on e-commerce for everything, they didn’t stop.
Now vs. Then: Online Purchasing and Fulfillment
People have the ability to order just about anything online, including high-value goods that were previously only available in person and required a great deal of management and expertise to ship. Items like antique furniture, precious jewelry, fine art, and collectibles are now readily purchased online. The fulfillment of these items is evolving thanks to technology that ensures the end-to-end process is delivered seamlessly. Paired with a greater interest in digital commerce for high-end items, it’s now possible to ship, track and insure these items the same way you would basic consumer goods. For this reason, the value of high-value goods in the e-commerce industry is poised for exponential growth. Optimizing how luxury goods move through the supply chain and ultimately into the hands of the buyer is the next frontier for e-commerce and where investors should be paying the most attention.
On the front end of making and procuring goods, high-value goods are not generally beholden to the global supply chain in the same way consumer goods are when it comes to making them. Remember in 2021 (and beyond) when it was nearly impossible to get a couch delivered in less than six months? Couches are made of several components and raw materials that all require their own supply chains to be assembled together. Fabrics, wood and metals for the frame, and filling for the cushions themselves. When we’re talking about an antique or piece of fine art, that’s not the case. These are one-of-a-kind objects that already exist — they don’t need to be assembled, just packed (correctly!) and shipped. The supply chain of the factory isn’t an issue because there is no factory — the item is already made.
Bypassing Shipment Issues and the Rise of End-to-End Fulfillment Services
When it comes to the post-sale process, things are generally much smoother as well. The consumer goods that famously faced shortages (e.g., toilet paper, baking yeast, and the aforementioned couches) generally travel by sea on container ships. Congested ports and a lack of available containers for shipping these goods caused a ton of chaos from 2020 until very recently, and we’re just now starting to see relief from the situation. The high-value goods mentioned above (antique furniture, precious jewelry, fine art, and collectibles) rarely travel by sea, but rather by land or air. They’re generally not part of bulk orders and ship as one-offs, which allows them to completely bypass the shipping and transit issues that basic consumer goods are beholden to. In addition, thanks to powerful logistics software and end-to-end fulfillment services, the post-sale experience for both buyers and sellers of luxury goods is now streamlined, easy and user friendly.
Luxury E-Commerce Poised for Growth
Lastly, this market is growing. Despite stumbling in 2020 like every other market, the global art market is on the up. It bounced back strongly in 2021, with aggregate sales of art and antiques by dealers and auction houses growing 29 percent year-over-year. Furthermore, the collectibles market is predicted to grow at a rate of 4 percent annually from 2022 to 2028.
Although the global supply chain was put front and center in the news over the past few years, it's something that's always moving, growing and affecting the commerce economy, even more so as people continue to buy more and more things online. People now know they can get their toothpaste and bananas online, but also know they can buy diamonds and rare art as well. It’s the latter where we’ll continue to see growth in the e-commerce landscape over the next several years.
Adam Fields is the founder and CEO of ARTA, a provider of end-to-end logistics solutions for merchants and marketplaces worldwide.
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