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Catwalking With Confidence
The study showed 57 per cent of consumers expect decreased spending in the next six to nine months, while only 20 per cent foresaw increased spending
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IN FEBRUARY 2020, the unthinkable happened! At Milan Fashion Week, Giorgio Armani streamed the brand’s runway show, from an empty venue! It was a telling image on how Covid- 19 has hit the luxury industry! Sample this: LVMH Moët Hennessy- Louis Vuitton as well as Kering, the umbrella company of brands like Gucci and Bottega Veneta, reported YoY losses of about 15 per cent in fiscal Q1 2020. And Bain & Co. says global luxury sales could drop by 35 per cent by end of 2020.
Capgemini Research Institute report, The Consumer and COVID-19, presented findings from 11,000 consumers on the impact of Covid-19. The study showed 57 per cent of consumers expect decreased spending in the next six to nine months, while only 20 per cent foresaw increased spending. How do luxury brands revamp the customer journey to reflect the current scenario? As technology plays a big role in business during Covid, they should leverage the opportunity to strengthen digitisation in customer experience and to optimise operations. Let’s see some key steps brands can take to offset a business decline in the new normal.
Creating a seamless experience
New-age technologies like AR/VR help create a seamless experience between physical and digital ecosystems. For instance, Dior launched a VR version of its flagship Paris store where customers could access product information and purchase them – with a click. Gucci created an AR lens that allows users to try different footwear and purchase it instantly through a ‘shop now’ icon. These voice-based interfaces offer a wide exclusive product range, as well as information on sustainability and craftsmanship.
Taking the re-commerce route
As retail moves to a ‘less is more’ model, where new generations desist from binge buying, the concept of ‘product afterlife’ is dominating the fashion discourse. Credible and user-friendly brand aftermarket strategy can provide both exceptional value through savings of 50–90 per cent as well as super-premium transactions when limited-edition goods are scarce. For instance, France, which is home to top luxury brands, introduced a Circular Economy Roadmap that prohibits apparel brands and retailers from discarding unsold items, and instead donate them to recycling organisations for reuse.
Strengthening online retail
As shoppers move online, retailers are following suit. E-commerce sales accounted for 13 per cent of Kering’s total sales in FY 2020, up from 6 per cent in the previous year. Even as its stores reopened, Kering’s digital sales in China and Europe continued to strengthen. For example, Oscar de la Renta will showcase its 2020 collection on Amazon’s Luxury Stores, operating on an invitation-only basis for Prime members. It hopes to ride Amazon’s superior CX to further its lead in e-commerce.
Engaging virtually with customers
The typical luxury consumer relies more on inner circles and references than mass advertisements. Gucci, for instance, created personalised concierge services for its customers where salesmen bring the store virtually to the clientele. Needless to say, it has had an outstanding response.
Nearshoring and local marketing
As China’s position as a key exporter of luxury goods wavers, luxury players are diversifying suppliers and bringing production closer to home, especially by positioning local products. For instance, Europe’s luxury retailers are shifting from catering to Chinese consumers towards the local clientele. Governments too are incentivising local manufacturers and production, leading in creating entry or mid-range products suited to local customers.
Walking the business ramp … in style!
Beyond technology, it’s important for luxury brands to remain on top of of their consumers. Out-of-the-box purposeful thinking – like promoting a circular economy or displaying a sense of social responsibility – helps to foster strong community connect. For example, Louis Vuitton altered its production from making perfumes to sanitizers and masks. Burberry repurposed its Yorkshire trench coat factory to manufacture non-surgical gowns and masks for patients, garnering positivity. But as attitudes to shopping change , it goes without saying that luxury brands should brace themselves for the long haul. In an industry with the most fickle-minded consumers, only a long-term strategy will sustain luxury retailers in these difficult times.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.