McKinsey estimates accounts for between 20-to-30 percent<\/a> of luxury goods sales.<\/li><\/ol>\n\n\n\nAll Those Familiar Places: Closed<\/h3>\n\n\n\n
Not only are jet setting tourists grounded, most luxury consumers are not dining out, going to work or attending events. The need for new things has been reduced, especially those luxury essentials, out of reach for most customers. \u201cLess socializing has reduced the need for fashion apparel; it\u2019s exacerbated by less travel these days as well,\u201d says one luxury insider.<\/p>\n\n\n\n
What little shopping luxury consumers are doing is now primarily conducted online, which doesn\u2019t have the service experience or thrill of in-store shopping. \u201cAs a luxury brand, we have an intimate relationship with customers. We can\u2019t meet, talk to or interact with customers like we used to,\u201d says a luxury brand executive.<\/p>\n\n\n\n
Online is often a poor substitute for that personalized, one-on-one contact, but luxury brands have been forced to pivot. \u201cMost of our clients have had to move from offering special, targeted, bespoke in-person experiences to their luxury customers to pivoting to imaginative and innovative ways to offer luxe experiences digitally,\u201d explains an agency executive.<\/p>\n\n\n\n
Home as Luxury Commerce Center<\/h3>\n\n\n\n
The pandemic has forced luxury brands to fully embrace ecommerce, something that many brands had been slow to do. After doubling its market share in 2020, ecommerce is set to become the leading channel of distribution of luxury goods by 2025, reaching 30 percent.<\/p>\n\n\n\n
With luxury consumers saving vast sums from not traveling and dining out, they have invested that money back into their homes. The $51 billion in 2019 high-end home furnishings market will enjoy a boost this year, as will the companies that provide services to luxury homeowners, such as interior designers, architects, lighting designers, landscapers and contractors.<\/p>\n\n\n\n
As a result, any number of luxury brands have been testing the waters in home decor or expanding their existing products, including Louis Vuitton, Herm\u00e8s, Gucci, Bottega Veneta and Ralph Lauren.<\/p>\n\n\n\n
Luxury Reset<\/h3>\n\n\n\n
Over the five-year history of our luxury insiders\u2019 survey, one concern keeps cropping up among respondents: The traditional meaning of luxury is under threat. As a new generation of affluent consumers has emerged globally, the old ideas of luxury seem to have less meaning and relevance, and it caused the industry to question how to move forward.<\/p>\n\n\n\n
\u201cIt is not so much that luxury has lost its meaning, as it is that luxury has to evolve its meaning,\u201d was an insightful comment from last year\u2019s survey. This year, respondents say, \u201cWe need to reinterpret luxury from labels and conspicuous consumption to a quest for goods and services that are personal, authentic and unique,\u201d and \u201cIn an effort to drive growth, luxury loses its meaning and unique place in the consumers\u2019 frame of reference. It becomes too intertwined with digital accessibility and catering to the mass. Luxury still needs to feel special and luxurious!\u201d<\/p>\n\n\n\n
It\u2019s been widely reported that the pandemic didn\u2019t necessarily change trends in the market, rather it accelerated their evolution. So, this past year has forced luxury brands to more closely examine their businesses and business models, as luxury consumers have been examining their own behavior and values.<\/p>\n\n\n\n
\u201cIt has made people drill down to what is really important, what has lasting and enduring value in their lives,\u201d says one insider. \u201cPeople are reassessing what is important to them and what they can and cannot do without \u2013 what is truly essential in their life. The pandemic has been the biggest reset ever,\u201d says another.<\/p>\n\n\n\n
The research reveals that needs have won over wants, which threatens luxury since it is the most discretionary of all purchases. That being said, it all depends on how needs are positioned; one person\u2019s luxury is another\u2019s basic need.<\/p>\n\n\n\n
The End of Conspicuous Consumption<\/h3>\n\n\n\n
Luxury insiders repeatedly refer to a rising \u201cconscientious consumer,\u201d deeply concerned about the environmental and societal impact of what is perceived as conspicuous, \u201cshop \u2018til you drop\u201d consumerism.<\/p>\n\n\n\n
\u201cOver consumption or blatant consumerism is perceived as inappropriate and insensitive. Going forward, luxury purchases will be based more on what is individually important or valued. People are now thinking first before making a spontaneous purchase. It\u2019s rationalized buying,\u201d says an insider.<\/p>\n\n\n\n
Unlike in previous recessions where only people\u2019s financial status was affected, the pandemic has threatened our very lives. \u201cPeople are rethinking what is really important. They are literally taking stock of their possessions. Priorities are shifting to what is really important in people\u2019s lives. They are evaluating what they want versus what they really need to live a happy, healthy life,\u201d observes an insider.<\/p>\n\n\n\n
The prescription to unbridled consumption is described by a luxury marketer, \u201cWe have to return to fundamental and universal values of health and well-being, a quest for more sense of how people think and live. We have to return to excellence and the mastery of crafting things. It is a privilege to invest in luxury, show luxury and engage in luxury. We have to build the desire to create a meaningful life in meaningful surroundings with added value experiences about what we [our brand] are and what we stand for.\u201d<\/p>\n\n\n\n
Values-Based Luxury<\/h3>\n\n\n\n
As Covid-19 has forced consumers to question their need to acquire more goods, it has caused brands to refine their business models. \u201cPeople are now treating luxury as investments. The luxury market must convince consumers that their luxury goods purchases are assets. The mindset that these purchases have inherent value will be an important fact as everyone considers their spending power,\u201d notes an insider.<\/p>\n\n\n\n
\u201cIt\u2019s a post-aspirational luxury consumer. People are attuned to the huge separation between the haves and the have-nots. It is a call for high quality and being a brand with a purpose, not just displaying huge logos and calling that luxury,\u201d says another.<\/p>\n\n\n\n
Consumers\u2019 Quest for Deeper Meaning<\/h3>\n\n\n\n
Successful brands are customer-centric, and the dynamic changes to consumers\u2019 value systems calls on luxury brands to align their branding, marketing and operations with this shift. While one insider notes that time will tell whether consumers will continue on this new conscientious consumerism course or revert to their old ways, the extended time people have spent at home has likely changed their old habits and will continue long into the future.<\/p>\n\n\n\n
Dr. Martina Olbertova, founder of Meaning.Global, and arguably the world\u2019s leading expert on brand meaning, provides a perspective:<\/p>\n\n\n\n
\u201cConsumer habits are undergoing a rapid change today as the new generation of consumers focuses on expressing their individuality rather than ownership. The consumption of luxury is becoming less and less about the brands themselves and more about empowering people to become more of what they are. This shift pushes luxury brands to be the active agents in their customers\u2019 identity creation, which goes far beyond the traditional limits of luxury branding. It reverses the industry dynamic from aspiring to own brands to empowering people and their individual identities.\u201d<\/p>\n\n\n\n
Back to the Future<\/h3>\n\n\n\n
In a refreshing way, luxury brands may return to their roots and their true legacy value. Just pumping out more high-priced, mass-produced stuff with prominent logos to feed consumers\u2019 demand for visible symbols of success is no longer luxurious.<\/p>\n\n\n\n
Olbertova believes this health crisis, which slowed down the whole world, will give luxury brands a pause so that they can look inward to probe more deeply into what their brands mean now and should mean in the future. \u201cThis is a time to create and strengthen brand perceptions, which ultimately create value. That\u2019s all anchored in meaning,\u201d she shares.<\/p>\n\n\n\n
For 2021, the opportunities are bright for brands that have learned from the many challenges they faced in 2020. \u201cThere will continue to be some shrinking of the market and that\u2019s actually good,\u201d says a luxury insider. \u201cWe have too much product, and it\u2019s not necessary. People need less but want better.\u201d<\/p>\n\n\n\n
The true opportunity in 2021 is to create a new vision of the luxury market that builds on its great past, rather than simply reacting to the fickle, shifting tides of consumer trends.<\/p>\n\n\n\n
\u201cWe can\u2019t afford to repeat the same solutions over and over again, like only investing more money in tech to solve our problems,\u201d an insider shares, and continues, \u201cWe need to start at ground zero and reinvent the industry proactively rather than simply reacting to current conditions. It requires listening actively and creatively to the voice of the consumer.\u201d<\/p>\n\n\n\n
Note: This article originally appeared in The Robin Report.<\/a><\/em><\/p>","protected":false},"excerpt":{"rendered":"The seemingly insulated luxury market has never experienced a year like 2020 when personal luxury goods sales dropped $78 billion from 2019 \u2013 a 23 percent decrease year-over-year \u2013 to a total $266 billion in 2020. Posted on\u00a0February 14, 2021\u00a0by\u00a0Pamela Danziger With the pandemic threatening both consumers\u2019 health and finances, the industry\u2019s decline was more […]<\/p>","protected":false},"author":2,"featured_media":382,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[42,1],"tags":[],"class_list":{"0":"post-738","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-luxury-market","8":"category-uncategorized"},"_links":{"self":[{"href":"https:\/\/www.luxurymarketreview.com\/zh\/wp-json\/wp\/v2\/posts\/738","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.luxurymarketreview.com\/zh\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.luxurymarketreview.com\/zh\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.luxurymarketreview.com\/zh\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.luxurymarketreview.com\/zh\/wp-json\/wp\/v2\/comments?post=738"}],"version-history":[{"count":0,"href":"https:\/\/www.luxurymarketreview.com\/zh\/wp-json\/wp\/v2\/posts\/738\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.luxurymarketreview.com\/zh\/wp-json\/wp\/v2\/media\/382"}],"wp:attachment":[{"href":"https:\/\/www.luxurymarketreview.com\/zh\/wp-json\/wp\/v2\/media?parent=738"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.luxurymarketreview.com\/zh\/wp-json\/wp\/v2\/categories?post=738"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.luxurymarketreview.com\/zh\/wp-json\/wp\/v2\/tags?post=738"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}