The Impact of Coronavirus on Luxury Goods

Delivery

This report comes in PPT.

Key Findings

Luxury goods hit from every angle

Whilst some luxury goods categories and retail channels may be less negatively affected than others, the pandemic represents an absolutely unprecedented shock to all areas, and no luxury goods category is likely to “benefit” from the COVID-19 crisis, with all categories affected in the short term.

Consumer confidence hit, whilst fear of contagion rises

Consumers fear contagion in the luxury retail space, whilst others see little point in buying personal luxury goods, such as leather goods, apparel and footwear, timepieces or jewellery. Owing to the conspicuous nature of some products many feel there is little opportunity to wear or use them in the foreseeable future. In addition, consumer confidence has been hit and spending on “on-essentials” has been put on hold.

Luxury hotels and hospitality hit hard

The ongoing COVID-19 outbreak is hitting the luxury travel market hard. Luxury hotels, travel, high-end travel retailers and hospitality services have all already suffered significant losses due to falling global demand with the long-term outlook looking uncertain as consumer spending on all such services is pulling back dramatically.

Experiential luxury but not as we know it

Whilst luxury foodservice has been severely impacted by the challenges of COVID-19, with all of the world’s luxury foodservice operators facing mandated shutdowns, many luxury hotels are now focused on home delivery services and providing online tutorials on how to replicate luxury hotel services at home, with lessons on services such as bed-dressing, creating the perfect “turn-down service”, flower arranging and fine-dining.

COVID-19 and business with purpose

Despite the extremely difficult times that luxury businesses are facing, many brands have been able to shift their focus and support local communities. These shifts include the reworking of supply chains to make the products consumers and the health industry currently needs as well as providing special discounts, food and shelter to healthcare workers.