The future of luxury fashion, possibly much less affected than other segments, lies in how they orient themselves in the near future. There can be five comeback strategies
The coronavirus impact seems to be slowing down in some parts of the globe like China, luxury brands sales have started rebounding. Lately, with the lockdown lifted, flocks of shoppers have been found in luxury boutiques in mainland China. The ultra high net worth individuals (HNWIs) are the major drivers of luxury sales under covid-19, as they have been financially the least affected. Even if there is some cut in their numbers, it is just like a drop in the ocean. However, young consumers are also seen contributing to this drive as they are diverting their travel and holiday budgets into buying luxury items
Now, the key question coming in our minds is: Will the similar buying patterns be witnessed in India also after the lockdown is over? Will we see a surge in luxury spending after covid-19 in India? Will the consumers become desperate for “revenge buying” after being in quarantine for so many weeks
Of course, there will be a set of consumers who would be rushing to indulge in luxury shopping experiences to rejuvenate themselves as luxury is the “way of their life” and they cannot live without it. (As we recently witnessed that even after 70 per cent ‘corona’ tax people were still queuing outside the liquor shops after those were permitted to open). Still, there would be another set of cautious buyers who would want to move away from discretionary spending and save for the unforeseen future. Luxury marketers have to devise right set of strategies to entice both these segments
Here are the five comeback strategies for luxury fashion brands
Emphasise on products with “long term value” or “investment appeal”
India is a value-conscious market. Luxury brands will be able to capture the attention of luxury buyers by clearly communicating the long-term value proposition and investment rationale in the ownership of their products. Believe it or not, connoisseurs will be willing to pay even more on quality, timeless items that offer high value and perceived as investment items. The record high sales of $2.7 million of Hermes recently in China on the first day of its reopening after the lockdown is the best case to learn from.
Note:Companies should highlight the legacy, craftsmanship and hard work that goes behind producing such items via Instagram stories, videos and other digital means
Add “new product” categories: Companies will need to introduce new product categories keeping in view the altered lifestyle of luxury consumers. Fashion items which we considered essentials such as pajamas, masks, aprons or comfortwear can be new style statements. Hence, luxury brands should focus on these categories and extend their product lines. Brands like Louis Vuitton are selling designer masks to consumers to turn the new necessity as a way to express one’s identity. Similarly, luxury brands should focus on introducing new sustainable or green products to capture on the prevailing sentiment of luxury buyers. During these times, most consumers have realised that “less is more”; so, they would prefer to go for quality rather than quantity. They might shift from fast fashion to slow fashion. Instead of buying 10 articles from Zara, they may settle in buying one piece from Chanel
Note: The companies should focus on more meaningful luxury.
Sustainability and cause marketing—A must have arsenal in the marketing mix: The covid-19 pandemic has left a deep impact on the emotions, thought processes and perceptions of luxury buyers. Consumers across the globe have realised the power and importance of Mother Nature in our lives. It has made all of us more concerned, attached and sympathetic towards the society and environment we live in. In view of these circumstances, sustainability has become the cornerstone of all strategies and marketing efforts of companies, and luxury brands are no exception to this phenomenon. For instance, haute couture brands from Chanel to Burberry are using their resources to make protective clothing to safeguard healthcare workers. Cause marketing can be a major arsenal for luxury brands to win customers’ attention during these sensitive times.
Note: Companies which will act responsibly will only be able to survive and thrive during these difficult times
Prepare for new business models: During this pandemic, consumers may shift from the unhealthy throwaway culture to a new economic model— circular economy, which brings the notion of restoration and regeneration in place of the traditional end-of-life concept. New business models like re-commerce, pre-owned fashion or consultancy services will emerge stronger. For instance, consumers could pay on an hourly basis, for getting oneon-one styling advice in person or online
These services will facilitate consumers to learn to use already available clothes in different ways rather than buy new ones.
Note: This is the right time for companies to explore new business models
Formulate strategic and tactical plans around digital: Digital has to be the new normal for luxury brands, as post-lockdown consumers due to the fear of pandemic will increasingly shop over digital channels. Companies will need to invest in technologies that offer omnichannel shopping experience to luxury buyers, be it use of augmented and virtual reality, shoppable videos-driven live fashion shows, data analytics and AI-driven personalisation tools or virtual shopping assistants. Recently, for the first time ever, the Shanghai Fashion Week went digital. Over 150 brands livestreamed their collections via Tmall, Alibaba Group’s e-commerce platform. Consumers were given the opportunity to “see now buy now,” which allowed shoppers to buy runway items instantly with their phones.
Note: In the future, more and more brands have to adapt to connect with consumers online
The covid-19 outbreak has altered the shopping behaviour of luxury consumers. The luxury buyers, who were always on the hunt for something new, have become more cautious about value, conscious about environment and concerned about the society. Luxury brands will need to take a serious relook on their strategies in order to reestablish themselves in the post-COVID era.
This article was first published in the June 2020 edition of the print magazine