A record current value sales decline was seen in luxury goods in 2020, due to efforts to curtail the spread of COVID-19. These included domestic and international travel restrictions, lockdowns, and other significant limitations on in-person gatherings and events, as well as social distancing and hygiene regulations in stores, dealerships, hotels, restaurants, and more.
Impacting sales of luxury goods throughout 2020 and much of 2021 was a lack of consumer need, not only amidst actual lockdowns and quarantines, but also for the rest of these years, as consumers continued to spend significantly more time at home than usual. Without an opportunity to show off their personal luxury goods, including luxury eyewear, luxury leather goods, luxury timepieces and designer apparel and footwear, at the office, on foreign travel, or during large social gatherings, many consumers with discretionary income instead prioritised spending on goods and services to help make the increased time spent at home more comfortable, such as food and alcohol delivery, furniture, home décor and home entertainment systems.
While most domestic travel restrictions in the US were eased in the first half of 2021, alongside the rollout of COVID-19 vaccines, many foreign travellers were unable to enter the US until November 2021. Therefore, with wealthy foreign tourists representing a key driver of sales of luxury goods across categories in the US prior to the pandemic, brands and retailers increasingly shifted their marketing and product efforts to focus on attracting local consumers instead.
The vast majority of sales of luxury goods across categories occurred through store-based retail channels prior to the pandemic, such as non-grocery specialists and luxury department stores (classified as mixed retailers). However, many consumers found themselves either unable or unwilling to purchase their preferred products and brands in-store throughout much of 2020 and the first half of 2021 amidst COVID-19 restrictions, which varied across states in terms of timing and severity.
As consumers were already increasingly prioritising spending on out-of-home luxury experiences, including travel, dining out and other forms of entertainment, even before the pandemic, some personal luxury categories had also benefited from the shift, as consumers chose stylish and versatile items to wear and be seen in on these outings, including designer apparel and footwear, luxury leather goods and luxury jewellery. As pandemic restrictions eased during summer 2020 and again in spring 2021, before being largely eliminated by summer 2021 in most states alongside the vaccine rollout, consumers were quick to resume local activities, domestic travel, and international travel when possible, delivering a boost to growth across categories.
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