3 Major Changes in the Luxury Market due to COVID-19

Well for starters, it seems like everyone has been trying to re-configure their lives around various constrains brought about by the lockdowns over the past few weeks. Especially for businesses, the topic of change IS very much in the spotlight- everyone is trying to understand the effects the pandemic could potentially bring. Noting that change has been a constant in the world, this time however, the disruption seems to go beyond risks and opportunities but finding a way to survive.

In this interview, I found out what Maria thought would be the three major changes brought to Luxury Brand customers in in the long term.

Investment

You’ve probably heard of investments- stocks, bitcoins, bonds etc. that can help grow a fortune. But what else? Is it a wise decision? In times of economic uncertainty, we are looking for smart investments. Maria feels that there will be a strong trend to consider luxury goods as a form of investment now more than ever.

“We as consumers reflect on what we want to purchase, what is truly relevant for us in the future and where we will see lasting value. We don’t only buy what we need but so much more. This shows how much we thrive towards unnecessary buys.”

Well do remember that feeling of standing in your closet filled with clothes, but you felt like you have nothing to wear? I for one have been guilty of that, going out and buying more stuff to fuel that sense of emancipation. Likewise, luxury goods bestow an allure of prestige when owned. Not forgetting the exclusivity and the instant gratification it can offer unlike regular investment.

“Also, the circular economy will receive a push (e.g. for vintage pieces) rather than fast fashion items which lose their value rather quickly. Our purchase behavior will change to one that is more aware and cautious.”

What this means is that luxury brands are naturally more sustainable and have long set the standard in design, quality of materials, craftsmanship, and processes that stand the test of time which you can pass on from generation to generation. Coupled with a growing vintage revival, the products become restorative and regenerative instead of being thrown away. Both you and I would be able to give these luxury goods a second life and purchase them at a much lower price via second-hand stores. More importantly, it’s a step forward towards a more conscientious, environmentally friendly future.

Communication

“Brands now need to create value with their consumer base and inspire them. It is not about selling these days although that is what everyone targets to do- it is about creating a message which emotionally connects with the consumer.”

Every individual has a sense of what constitutes a lifestyle, luxury, affluence… ones’ image. The key in communication is to infuse a brand with a lifestyle, tell stories beyond just products, and be authentic and inclusive in its narrative. In an ever-changing digital era, luxury brands have to strive to get customers to engage with the brands that align with their personal value through various touchpoints. With luxury goods demanding a higher price tag, emotions-based value essentially determines the value of the products.

“In light of the pandemic, the communication will be around aspirational and charity messages with impact for example mask and hand sanitizer production or using the brand’s voice to thank healthcare workers and those involved in this fight during these difficult times.”

It is no secret that luxury brands have to adapt their communication strategies to accommodate the current situation. A study by Kantar showed 77% agreed they feel more positively about brands making an effort to support society now. With luxury brands standing in solidarity rather than simply selling their goods, they will still be able to build their customer base while reinforcing their identity and values.

LVMH for instance mobilized on all fronts to transform its factories line into hand sanitizers and non-surgical masks production lines to support the fight against COVID-19. Such initiatives not only promote compassion and generosity but also shows the adaptability we need to inherit in times of challenges.

“I am a big fan of changing production to economic needs and believe this is everyone responsibility to Incorporate a greater good where possible.”

Gifting

“Gifting will play a bigger role now than ever before- we appreciate, we reflect on how lucky we are to be healthy and we gift our surrounding as we spread the positive energy.”

Gifting to me is an expression of emotions. I would buy a gift to strengthen my relationship with the receiver or to show them how much they mean to me. More so, in this pandemic I would truly send someone a gift to let them know they are missed, loved and remembered. And if the gift is well received, it will create emotional links to the brand, enhancing brand loyalty.

“What applies for yourself also applies to the ones you wish to gift.”

This highlights the needs and desires of both giver and receiver. In any case if you might be afraid is someone might not like the gift, luxury would appear to be a safe option because of its sheer indulgence. Luxury goods are ideal gifts, taking advantage of being exquisite and desirable. Not to mention, it also reflects the importance of the recipient.

In a nutshell, luxury brands are definitely sharing in the misfortune of the pandemic and I hope they find some liberation soon. Meanwhile, brands should take the opportunity to extend their scope, engage in digital transformations and personalizing messages. Any act of kindness right now would be a strategic ingredient in overcoming the crisis- afterall, you’d want a lasting impression!

Quick Fire Q&A

• 1. What are you searching for online in isolation?
  Online courses from top universities, yoga classes and travel destinations to be ready to travel as soon as we can.
  
  
• 2. Which food would you ‘deliver/takeaway’ most often in this period?
  Wiener Schnitzel and Mexican tacos.
  
  
• 3. First thing you would want to do immediately once the circuit breaker/lockdown is lifted?
  See my family and invite friends over for a post corona dinner- obviously taking into account all needed safety precautions!
  
  
• 4. Lesson learnt/quote to get you through this period?
  “We are the change that we seek. If you don't like something, change it. If you can't change it, change your attitude. You must be the change you wish to see in the world.”