How COVID-19 is impacting the Luxury Industry
Amid the coronavirus, the economy all over the globe is suffering a significant hit due to worldwide lockdown. Ir is a unique situation, and our world has never seen anything like this before. The uncertainty of when this all will end is making things even worse for businesses all around the world. Every company’s first priority right now is to protect the health safety of employees, consumers, and business partners. Several luxury brands are thinking beyond business and offering their factories for the mass production of protective gear. But, at the same time, there are millions of people who are dependent on the luxury industry for their livelihood.
In chaotic times like these, it is hard to say anything about what happens in the future. However, there are inevitable tangents on which the future of the luxury industry can be predicted.
What is Happening Now?
The luxury industry felt the first bump when COVID’19 spread through China – a country whose citizens make up to 90% of the total of global luxury market growth. Then, the virus reached Italy – a hub of headquarters of many brands. And after that, it has been nothing but downhill for the luxury industry.
However, recently when China partially lifted the lockdown, people started “Revenge shopping,” and it may be helpful to predict luxury consumer trends all over the world.
How Consumers Will Behave Post COVID’19?
There is no denying the fact that there will be a “before and after” coronavirus world. Once all this is over, economies, societies, cultures, even morals, and ethics will be changed. Therefore, there is a great chance that customer trends will also change.
Conscientious Value Rather than Conspicuous Value
Due to the crisis, buyers may prefer shopping from sustainable brands. People may believe more in fair trade product consumption. It can result in an ethical question in their decision making. Therefore, luxury brands must think beyond business and make the necessary changes to satisfy the moral questions of their clients. For example, giving discounts amid the COVID’19 might just do the trick just like there is a discount on all Hublot watch models.
“Feel Better” Purchases Might take A Surge
Contrary to the above, there is another extreme called “revenge or retaliatory spending” when it comes to predicting shopping behaviors post COVID’19. A glimpse of this trend was seen when the record surge in luxury brand sales made when the lockdown was partially lifted in China. However, it is still very soon to say that the luxury industry could get back to its feet through a V-shaped recovery pattern as a result of revenge buying.
What Does the Luxury Industry Need to Do?
Given all these circumstances, the luxury industry needs to revisit its roots and make the long term changes to overcome the sustainability question. But that is a long road, and it may be a while till the luxury industry gets there.
In the meanwhile, here are a few quick patches that can work:
Review Inventories and Reimagine 2021 Collections
Luxury brands need to review their summer inventories and give massive discounts as the customers didn’t really have the chance to explore this summer’s collection. Along with that, they need to come up with reimagined and creative ideas for 2021’s collection – ideas that fit the post COVID’19 world.
Improve and Increase Digital Engagement
It’s time that luxury brands come out of those glitzy malls and spread their digital footprint. It will help them to be more accessible to their customers. It is the only way to save the dangling luxury industry, and there is no telling how it will take for life to be back to normal.