Davide Ruggiero, founder of Te Atrium, is confident that new communications technologies can best capitalise on an increasingly globalised luxury property market
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International Luxury Property Online: Davide Ruggiero, Te Atrium
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Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.
PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.
In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”
The Fondation Cartier pour l’Art Contemparain building in Paris
Davide Ruggiero, founder of Te Atrium, is confident that new communications technologies can best capitalise on an increasingly globalised luxury property market
Te Atrium’s current user interface
Another in our series of conversations where we explore and discuss the future of the luxury industry. We spoke with Davide Ruggiero, founder of Te Atrium, an international, multi-language portal for luxury homes, serving agents, architects, interior designers and property seekers alike.
It was during his studies at London Business School when Davide Ruggiero discovered a compelling gap in the international property portal space, specifically at the luxury end of the market. After working in roles at Alpha Real Estate Partners and Morgan Stanley Real Estate Fund, the MBA graduate felt that there was a fundamental difference between the needs of luxury consumers and the rest of the market, and that they were not adequately being served.
Combined with his conviction in digital technologies and social media, he went ahead to launch Te Atrium in late 2011, an international online-only real estate resource, connecting everyone from agents to prospective clients to interior designers and architects. The portal currently lists some of the most opulent properties in the world – everything from chalets in Switzerland, villas in St Tropez and a particularly impressive, six-bedroom penthouse in London’s Knightsbridge, listed at £35,000,000.
Tell us some more about the launch of Te Atrium. What was the key opportunity you identified when developing the business?
While studying at London Business School I carried out a brief research on the European property portal market and found at a mass-market level, the property portal space seemed saturated (or reaching saturation) in many countries. Yet at the top end of the market there was no existing portal that was addressing the needs of property buyers and tenants. At the same time I felt that – as in many other industries – there is a fundamental difference between the needs of luxury consumers and the rest of the market.
My research suggested that the luxury property portal market did not have enough scale to be financially attractive at a country level. Being much more international in nature – and becoming even more increasingly so – I believed the opportunity lay in developing a portal on a global level. Also because the incremental cost of adding more languages and countries is reasonably low.
That said, Te Atrium is aiming to be more than just a luxury property portal. We are currently developing our Design section by inviting talented architects and interior designers to share their portfolios. We will also open a section for interior decoration companies later in 2012.
“ Traditional channels present an outrageously high customer acquisition cost & provide little benefit outside plain advertising ”
How has the luxury market operated traditionally? And how will Te Atrium change that game going into 2012
High-end agents and developers are still burning mass amounts of money advertising in newspapers and magazines; these traditional channels present an outrageously high customer acquisition cost and provide little benefit outside plain advertising. On the other side, the vast majority of the high-end audience is now navigating the Internet and more often using mobile devices – because it is much simpler and more fun to search for properties online.
Te Atrium has been conceived to be both a cost efficient media and an effective instrument to reinforce the positioning of luxury property brands. In addition we will be offering our clients more than pure advertising; for instance during 2012 our site will introduce new functionalities specifically requested by our current customers.
The spectacular dining room of a Knightsbridge Penthouse, currently listed at £35 million
Few initially believed that Natalie Massenet’s Net-a-Porter would make success of selling luxury clothing online. Now the business turns over more than £50 million per annum. Can you foresee a future where significant luxury property deals are completed exclusively online?
The Internet is a great tool to search for properties, compare them, gather information about their locations and even choose your seller. However I do not foresee that, whether you buy for investment or lifestyle reasons (or a combination of both), a property purchase will happen entirely online in the near future.
Maybe one day when agents prepare high-quality 3-D property video tours this scenario will be possible but for now it is just too important to physically visit the property, its building and surroundings, before making a sensible decision.
“ 70% of millionaires have subscribed to at least one social network. It is a high number & very likely to increase as younger generations grow ”
Buying property has traditionally been a relatively intimate and private process, yet your listings have been optimised for sharing on Twitter and Facebook. Tell us why you thought it was important to include social media in your marketing mix…
I recently read statistics affirming that 70% of millionaires have subscribed to at least one social network and access their pages more than once a month. It is a high number and very likely going to increase as younger generations grow. In addition we like social media because it represents a more intimate and conducive environment where a High-Net-Worth Individual is more likely to be receptive to marketing messages.
Alongside a strong digital focus, you have also partnered with physical events to enter the trade and consumer consciousness. How important do you believe it is in the luxury industry to balance online and ‘in real life’ engagement?
We will continue sponsoring events that appeal to either our trade or private customers. Although we are a digital media (or maybe because we are such a media) we are keen to engage with our customers and hear their opinion, exchange ideas and share our strategy with them.
I believe that our market is in the middle of an important transformation and the players that will succeed are the ones that listen more carefully to customer needs (and pains!), and create or upgrade their services to respond to these needs. After all if both sides are engaged in the same conversation there is nothing more powerful than discussing vis-a-vis.
“ Our market is in the middle of an important transformation & the players that will succeed are the ones that listen most carefully to customer needs ”
How do you gauge the current health of the luxury property sector, in light of economic issues plaguing Europe and the US?
It is very difficult to define a common trend because the whole luxury property market is very broad and traditionally subject to local factors. Certainly from a macro-economic perspective it is not a great time and overall, Europeans and North Americans will be more cautious buyers. Tax and fiscal policies may also have an impact on the demand side.
However luxury residential properties are an asset class with an inherent low risk profile and in this time of market uncertainty they can be seen as a stable and tangible defensive investment. In addition they historically present good potential for capital gains and total returns, provided that the investment horizon is long enough to absorb transaction costs.
A bedroom in Chalet Zermatt Peak, currently listed at CHF19.5 million
What do you think will be the most popular three cities for luxury property in 2012? And how has this changed in the past five years…
I believe that some of the cities that will trade better are the ones where a higher percentage of properties are bought for investment reasons (as opposed to lifestyle reasons), there is a higher percentage of international buyers, a more liquid market and a higher price transparency; speaking about Europe, global hubs like London, or maybe Paris, are good candidates from this point of view. I also think that the property market in countries that have a solid or emerging economy, like Germany or Poland will do well, provided that there are no over supply situations at a local level.
“ Luxury residential properties are an asset class with an inherent low risk profile. They can be seen as a stable & tangible defensive investment ”
Barclay’s have suggested that wealth is expected to spread over a far wider selection of countries than has historically been the case. Which regions do you think will generate the most buyers in 2012? And how has this changed in the past five years…
Besides globalization of trade and easier mobility, we are living in a time of significant wealth reallocation. From a property investment standpoint this fact will be even more evident going forward. For example, Russian and Arabic buyers have traditionally been among the biggest spenders on luxury property in Europe, over the past ten years.
Now we are observing the first wave of property buyers from Mainland China and an increasing number from countries like India, Brazil and other emerging economies. I believe that in a few years there will be an increase in not only the number of buyer nationalities but also their level of sophistication and their approach to the purchase of luxury goods.
That is why property agents and developers need new strategies to attract and deal with these customers, which is an objective that Te Atrium can help them achieve.
For others discussions regarding the future of luxury and communications, please see the following:
– Communications After the Digital Boom: Frédéric Fontan, reflexgroup
– Augmenting Luxury Realities: Jonathan Chippindale, Holition
– The Post-Advertising Age: Jim Boulton, Story Worldwide
Creative Strategist, Digital
Sophie Doran is currently Senior Creative Strategist, Digital at Karla Otto. Prior to this role, she was the Paris-based editor-in-chief of Luxury Society. Prior to joining Luxury Society, Sophie completed her MBA in Melbourne, Australia, with a focus on luxury brand dynamics and leadership, whilst simultaneously working in management roles for several luxury retailers.
