Updated: Jul 28
Luxury brands must secure a place in the hearts and minds of their customers, their partners and the public.
As companies try to ride out the severe economic impact of the Covid-19 pandemic, certain industries are more badly affected than others. In particular, the luxury sector is likely to take one of the worst hits. Sales for this year’s spring season are 70 percent lower than last year’s. Swiss watch industry exports are expected to decline by 25 percent this year, the biggest drop in half a century. The future of fine dining is also far from certain.
The problem of the luxury industry is three-fold. First, consumers who feel control-deprived tend to buy more functional products than hedonic ones, as it helps them regain a sense of certainty in their lives. As such, consumer demand for luxury goods and services tends to fall to a greater extent compared to that for functional ones in times of crisis. Indeed, discretionary goods and services have been among the worst-performing asset classes since the outbreak of Covid-19.
Second, the luxury industry is traditionally reliant on tourism and high-touch selling modes in-store. Hence, many brands are behind the times in terms of digital marketing. They need to up their game in the areas of online assortment and user experience.
Third, as consumers shun unnecessary spending, luxury brands need to stay connected to their various stakeholders. Beyond their exclusive customer base, they must work harder to gain or maintain the trust of their partners and the public.
While letting go of suppliers or terminating dealership contracts may seem an easy way out in response to lower demand, luxury brands must earn the respect of their channel partners, both upstream and downstream. They should build trust by treating them as an extended part of the brand’s family.
Beyond the tangible goods and offerings luxury brands provide, people seek authentic values that they can connect with emotionally. For too long, luxury brands have only stood for excess and ostentation; it is time they truly inspire a whole generation and stand for something great.
EIU Paris offers a Luxury Brand workshop to help you understand all the economic factors revolving around the Luxury Industry. Develop your business with Sophie PLADEC, International Business Developer, Retail, Marketing and CRM Manager for the biggest Maisons de Luxe like Chanel, Godiva, Delvaux with more than 20 years in fashion and Luxury business.
You will learn to rejuvenate and boost your luxury business. Discover the latest inovative concepts in Paris, introducing 3 major topics: Boutique Layout, Mix Product Strategy and sourcing collections.
Learn more : https://fr.eiu-workshops.com/retail-ol