Last week, we saw more evidence that social media platforms are becoming marketplaces, while marketplaces are seeking to become more like social media. Elsewhere, Cucinelli and Ferragamo showed the diverging paths of the luxury industry, while improvements in the Swiss watch export business were a good sign for the category’s health. Don’t forget to subscribe to the Glossy Podcast for interviews with fashion industry leaders and Week in Review episodes, and the Glossy Beauty Podcast for interviews from the beauty industry. –Danny Parisi, sr. fashion reporter
Why does a shopping app need to be a social app?
Last week, Amazon announced a new addition to its mobile app, called “Consult-a-friend.” Essentially, while shopping on Amazon, you can send an item or your whole cart to a friend and, through the app, they can send reactions or guidance on what to buy.
It’s an inoffensive feature — although it’s unclear whether it provides more value than just texting a friend normally — but it did get me thinking about both the benefits and pitfalls of the merging of shopping and social media.
Increasingly, shopping apps are turning into social media apps, and vice versa. You can scroll a TikTok-like feed of short-form videos on Amazon and Etsy, and you can shop on TikTok and Instagram. It’s obvious that shopping is often a social process. According to Amazon, its customers copied links to products while shopping, presumably to send to friends, billions of times in the last 12 months.
But I’m not sure I need every single app and service in my life to also be a social experience. Why does everybody need to see who I send money to on Venmo? But according to Amazon, more than 50 million people use its Inspire feed every year, so there must be an audience.
The flip side of social commerce — social platforms like TikTok introducing shopping options — seems to have more potential downsides. A recent survey from Hubspot found that only 41% of respondents felt comfortable buying something on a social media platform. The No. 1 concern of those respondents was not knowing whether they can trust the companies that sell on those platforms.
On the Glossy Week in Review podcast last week, I spoke with our international reporter Zofia Zwieglinska about this subject. Last week, TikTok began working with the authentication company Entrupy to verify vintage handbags sold on the platform, specifically to mitigate the fear that some people have about buying on such a marketplace. As reported last week, there are plenty of counterfeit beauty products sold on TikTok.
The presence of counterfeits and sketchy sellers has historically been a barrier to brands wanting to sell on marketplaces like Amazon. As social media and commerce continue to converge, the social platforms will need to do more to assuage those concerns if they want to get more brands on board.
Cucinelli and Ferragamo diverge
In a near-perfect symbol of the divided fortunes of the luxury industry, Salvatore Ferragamo and Brunello Cucinelli reported very different earnings on Thursday.
For Cucinelli, the future is looking bright. The company expects to see total revenue growth of 20-22% this year, above its initial projection of 12%. Meanwhile, Ferragamo saw revenue decline by 8% in the last nine months compared to the same period in 2022.
It’s a good microcosm of how the luxury industry is standing on a precipice. While the category as a whole has seen incredible growth over the last three years, a combination of worsening inflation and economic slowdown in China has seen many luxury brands, even titans like LVMH, suddenly coming back down to earth.
The Swiss watch industry stays strong
Speaking of luxury, the Swiss watch industry had some good news last week with the report that exports grew nearly 4% last month. Watches are one category that’s proven more resilient than other luxury sectors as the market as a whole slows down. That continued growth, even in spite of prices slipping for some high-end models, is what’s driving more luxury brands to enter the category.
Louis Vuitton, for example, is currently in the process of transforming its watch business into one that can be more competitive with big Swiss brands like Rolex. While it can be difficult for any new brand to break into the highly competitive collector’s watch market, Tim Stracke, CEO of watch marketplace Chrono24, told me last week that, if any brand can do it, it’s Louis Vuitton.
“To build a pedigree within watches is not just a marathon, it’s a few marathons,” Stracke said. “But [Vuitton] has the power, the resources. They know luxury. It’s quite likely that in 5-10 years, they’ll be a very competitive [watch] brand.”
