More personalized, more engaged and more accessible, the post-Covid industry will be reborn, according to experts.
The image of Chinese travelers carrying large bags of luxury brands has become a panorama of the past. With confinement and restrictions on tourism, the luxury industry is preparing, after the fall of the first quarter of 2020 estimated at 25%, for the market slowdown, which would accentuate in the second quarter and could cause a contraction of between 20% and 35% throughout the year, according to the study ‘Bain & Company Luxury Study 2020 Spring Update’, prepared by Bain & Company and Fondazione Altagamma. “The recovery of the industry to 2019 levels will not occur until 2022 or 2023”warns Claudia D’Arpizio, lead author of the report, who warns that “the Covid crisis will force the industry to think more creatively and innovate even faster to meet a host of new consumer demands and restrictions on sales channels”.
During this pandemic many premium brands have taken the digital leap. “Despite the low weight of ecommerce for this sector, These months have served for many consumers to discover this purchase channel., so we foresee a very positive evolution in the coming months, “says Jacob Alonso, digital marketing manager at the consultancy Labelium Spain. But, can you recreate the shopping experience that involves this industry on a website? Alexis Mavrommatis, member from Esade’s Marketing department, believes that “of the five senses that create experiences, vision and hearing will be the main focal point. For this reason, we will see the proliferation and use of technologies such as virtual and augmented reality, which were already being used in the sector. “” More and more catalog references are likely to be personalized in luxury e-commerce. Another of the most used levers is the launch of exclusive online collections or products that go on sale in advance on the Internet, “adds Alonso.
Consuming luxury right now may seem frivolous if you look closely with your glasses and look no further: “We must think that behind the luxury industry there are numerous jobs direct and indirect that are maintained thanks to the fact that these types of products continue to be acquired, “says the Labelium executive, who recalls that” the message that is being sent to the consumer is that of the involvement of brands with this crisis and their contribution of solutions and measures to overcome it. “
The trends in the sector will be marked by changes in consumer habits. “Brands will have to rethink in some cases their business models and their dependencies on the relocation of production and some processes,” acknowledges Alonso, who predicts a rebound in sales when all stores are open, especially for those consumers who most they long for a more physical experience.
For Mavrommatis, the profile of the buyer will be the same, what will change is the symbolic role that luxury products have in them. “If things continue as they are, where public exposure to the consumer will be limited – with few people in restaurants, for example – lLuxury goods may need to reinvent their role as a guarantee of status. Among other measures, luxury fashion brands will offer a wider variety of informal lines. “Something Alonso agrees with:” The ethical sphere will gain importance driven by a greater social and environmental awareness of consumers. Too brands will need to increase their offer in the most accessible referencess and are considered the gateway to a banner. ”
With the radiography of March, April and the middle of May, it can be predicted which segments within the luxury sector will emerge unscathed from this pandemic. “Given the low supply and demand pressure, local brands will take advantage of the situation where global brands cannot respond,” says the Esade professor. “The verticals with a more accessible price, such as the entire cosmetic part, will undoubtedly be the least affected. It is, in fact, the one that is experiencing the most notable increases in digital sales in this context,” he added. Alonso.
Because as D’Arpizio emphasizes, after Covid-19 “the winning brands will be those that best interpret the spirit of the time, while remaining consistent with your internal DNA and individual history. “