Luxury goods was among the industries hardest hit by the Coronavirus (COVID-19) pandemic with sales damaged by temporary store closures, travel bans and weakened consumer spending. In addition, the pandemic also accelerated a channel shift to e-commerce as well as an emphasis on sustainability and wellness. This report provides a top-line overview of market performance and prospects, including the impact of COVID-19, and outlines key trends within the global luxury goods business landscape.
The COVID-19 pandemic is having an unprecedented impact on the luxury goods industry with global sales set to slump across all major markets. Sales in the world’s two most important luxury markets, namely China and the US, are expected to decline by 5% and 18% respectively, in 2020, and existing economic and political problems as well as income and wealth losses of affluent individuals in key markets are adding to the challenging mix.
Asia Pacific continues driving sales and remains the most important region overall for luxury goods making up almost half of all spending. Much of this spending has been driven by China’s middle, wealthy and affluent classes. That said, China’s wealthy and affluent population as a whole is set to contract with no rebound to pre-COVID-19 levels until 2024.
E-commerce and digital innovation will undoubtedly grow and expand as consumers continue to enjoy the convenience of online shopping, and the shift to learning, working, eating, shopping, playing and socialising moves further to the home and online. Both physical and digital retailers will need to go above and beyond to create new bonds and build loyalty with customers who will be looking to be entertained, rewarded and valued.
Luxury businesses are facing increasing pressure from consumers, governments, investors and NGOs to have a more positive impact on people and the planet. Sustainable initiatives and ESG will be key for all luxury players over the next five years, with the bulk of the investment going into projects related to waste, recycling, inclusivity, social and community projects and sustainable product development.
New ways of thinking and doing will be key to building resilience and one thing that should not be paused despite the economic crisis, is innovation. At a time when consumers are worried about the state of the planet as well as social issues, luxury businesses are urged to leverage investment in research and development to create new innovations that will resonate with consumers post-COVID-19.
If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE! Home Page