Where and How Consumers Shop in Fashion and Luxury Goods

Delivery

This report comes in PPT.

Key Findings

ramifications for how we shop in the “new normal" and in a post-COVID-19 world  Huge

As with all aspects of life, the COVID-19 pandemic will usher in a “new normal” that will have massive ramifications for how we shop. The pandemic is above all a human tragedy, and luxury and fashion brands and retailers will need to become more consumer-centric to ensure that their customers and staff feel safe and secure as the phased recovery begins. There is also the opportunity to ensure that sustainability, diversity and inclusion play a big role in making luxury and fashion fully accountable in the future.

The wealthy are not exempt from the financial impact of COVID-19

The number of adults in the top three wealth segments fell in 2020 over the previous year, as the pandemic caused financial market volatility and high-end property price corrections, thus denting the net worth of the ultra-HNWI, HNWI and affluent populations. Consumers are likely to cut back on spending in light of these difficult economic conditions.

Asia Pacific will lead the recovery in fashion and luxury retail

Driven mainly by China’s economic recovery, repatriated spending and pent-up demand, the year-on-year decline in spending on fashion and luxury in Asia Pacific is expected to be the smallest of all global regions in 2020, with a strong rise expected in 2021. The wealthy population is also expected to fare best in China, but downside risks remain.

Digital innovation accelerates and sparks corporate partnerships

In order to adapt strategies and remain competitive in a post-pandemic world, luxury and fashion retailers will need to explore the shifts in shopping behaviour that took place during this period of abrupt change. Digital innovation needs to accelerate, and companies should look to maximise corporate partnerships and efficiencies across all operations. Technology and innovation will be fundamental to win, and the “omnichannel experience” must show “zero friction” to survive.

Travel flows remain heavily disrupted, diminishing growth across key markets

  Whilst there may be some loosening of the rules over the 2020 festive season, travel restrictions remain in place across the vast majority of markets worldwide. According to the UN World Tourism Organization, 40% of destinations have eased restrictions, but the majority remain under some form of ban. The impact on markets heavily reliant on international spend, such as Hong Kong and New York, remains significant.