Luxury Contends With a New Reality

Blog | by Norman Kay | 05.21.2020

The sky is falling as the highly discretionary luxury shopper is flooded with anxiety and in exile. Post-pandemic brands will need to alter their story and re-examine their identity, as people are hungry to explore new meanings and emotions. Consumers are evaluating brands based upon social, cultural, and environmental contributions. Success with luxury must still define exceptional personal experience, but sustainability of product, process and packaging will rule.

High-end department stores and boutique segments that experienced disappointing results prior to the pandemic are now suffering through mandated lockdowns.

Travel, cruise, resort; major foundations underlying the luxury shopping experience, will take years for anything resembling full recovery. It will never resemble business as usual.

Fueled by the pandemic, the growth of DTC e-commerce will offer brands a path to re-invent the channel for their purpose. Personalized digital execution is primary. With social media carrying their message, all brands will now have the ability to curate their lifestyle image, integrating their charm, taste, and vision into a cross-category lifestyle marketing effort. It’s no longer just about innovation, it’s lifestyle integration. Value as a virtuous characteristic will become one with the luxury conversation. Going forward, Luxe will only be bestowed upon ultra-quality craftmanship; products that will last beyond continual style iterations.

Products will continue to be heavily entwined with social connection and community.

I see a shift toward healthfulness, soundness and authenticity. People are worn out. They want to feel better. They will purchase quality brands that provide an emotional high. Retail interactions will evolve – personal appointments, purchaser-centric experiences, and yes, designer protective-ware to align with the latest health recommendations. Sales personnel will be trained to fluidly act as on-line brand ambassadors within virtual showrooms.

Historically, major negative events spur consolidation and this will not be different.

One example – the largest luxury lifestyle umbrella LVMH – Moet Hennessey, Louis Vuitton. It boasts a dossier of top luxury designers as well as wine & spirit front- runners making them a power player in multiple pockets of wealth.

The question is, will the new consolidated entities manage to overcome the same challenges that threaten individual brands.

Furthermore, Luxury and discounting policies are acid and water. Diminished pricing will erode any exclusive franchise. Supply chains are shifting their production to supply critically needed equipment and sanitizers.

Will the future continue to chase high-end trends or is society bored with ‘stuff, deferring to remarkable experiences?

What will it take for the entire industry, including clothing, cars, accessories, and the like to sustain and then thrive?