As soon as the COVID-19 pandemic began in China, the luxury industry started to take notes and was immediately aware of the impact it will have on the sector. If you take a look back at 2019, 90% of the global luxury market growth happened in China, so there is no surprise that the brand owners took notice of the pandemic as soon as it began. And when it reached Italy, which is the home for many big brands, it became very clear what challenges the industry is facing.
Brands are doing everything to make sure that their customers and employees get through these difficult times safely by respecting the lockdown. And a lot of brands are also using their factories to produce the essentials that are needed in these difficult times.
Also, it is needless to say with the consumers being cautious and preferring not to spend much on luxury goods will have a huge impact on the GDP of the luxury sector. The employment will also take a hit as the financial markets are under extraordinary pressure. And the flight bans just add an insult to the injury, as there would not be many tourists and a lot of luxury markets depend on tourism. Due to the fact that the pandemic is still ongoing, it is hard to predict how it will affect the sector in the future. But one thing is for sure that the result will depend a lot on how the governments and nations deal with it. Let’s take a look at a few trends that may emerge in the luxury sector once the pandemic is over.
Quicker Shift to Online Shopping
Once the pandemic is over, the stores will eventually open, and the people will start going back there. But some of the habits born with online shopping will stick, especially if a brand has somehow made this hurdle into an opportunity and has improved their digital shopping experience. Aviation watches by Breitling are still on display in their digital store, and they are providing a good experience to customers with discounts and quick delivery. A good example of how to benefit from this opportunity. These habits of online shopping are not going to go away, and the brands will have to see this as a new opportunity that they can capitalize on.
Social and Sustainability Issues Will Be Taken More Seriously
Brands will have to rethink their management and their product’s life cycle completely. The concerns about the sustainability issue are only going to rise, and people would like to see brands take responsibility. Brands will also have to focus on their CSR campaigns and will have to show the world that they care about social and environmental issues. Ethics will become an important part of the conversation, and it will matter a great deal to the consumers.
Reinforced Local Pride
The pandemic has changed the mind-sets of people in a lot of different regards. Unfortunately, public opinion during the Cvoid19 outbreak has targeted certain nations and has stigmatized them. Not only it hurts the reputation of brands from those countries, but it has also ignited cultural pride in those nations. Both sides of this coin can affect the markets, and the brands need to be highly aware of that.
Change in Price Points
With the increased need for inclusion, brands are going to have another challenge on their hands. For brands, all the heads at the company will need to come together so that they can find creative ways to change their offers and make their price points more accessible. One thing is certain that when the pandemic is over, the buying power of the middle-class sector is going to be highly affected.