COVID-19 ACCELERATES CONSCIOUS CHANGE IN THE LUXURY SECTOR.
Economic uncertainty imposes and accelerates conscious change among firms in the luxury sector, offering considerable scope for innovation and competitive profit. Bain and Company estimated a growth of 4% in 2019 to 1.3 billion worldwide, covering both luxury products and experiences. This positive outlook contrasts with the current reality after the pandemic, according to Boston Consulting Group, the first quarter of 2020 has suffered a dizzying expected 30% drop [between € 80 and € 110 billion in annual sales]. The impact has undoubtedly resulted in an accelerated reaction by brands, adapting to the new mentality of a more suspicious and fearful consumer, digital transformation and ethical and sustainable practices have made their way, establishing themselves to stay.
1. COMMITMENT TO A CONSCIOUS LEADERSHIP
With an increasingly prominent economic gap between social classes, a consumer is identified who analyzes and bases their consumption and perception of the brand on their social and environmental values with which they feel identified. The sector is rethinking its strategy, turning to offering an image of luxury that is sensitive to the environment but maintaining the line of quality and crucial excellence in luxury.
2. CAUSE MARKETING
Post Covid-19, consumers are even more sensitive to the need for investments that respect nature, climate and social causes. Firms should look beyond their calendars and objectives, focusing on elevating their proposition as 'Meaningful' purpose marks for the consumer. Groups like LVMH have already bet on their collaboration, driving the recovery from the pandemic and donating $ 2.3 million to the Chinese Red Cross Foundation to address the shortage of medical supplies. Among many of its actions, on March 16 it converted its cosmetics and perfume facilities, Guerlain, Christian Dior and Givenchy, to manufacture disinfectants and on March 21 announced the order of 40 million masks to support health workers in France.
Dolce & Gabbana announced on March 16 its association with Humanitas University to finance a research project, focused on the responses of the immune system to the virus, with the aim of developing diagnostic and therapeutic interventions against the disease. Other groups such as the Mayhoola Fund, owner of firms such as Valentino, Balmain and Pal Ziler, announced the donation of a million euros to help in the extension of the Ifema hospital in Madrid.
Ralph Lauren is one of the fashion brands with the greatest awareness and positive environmental and social impact, always publicly expressing their good practices in their ´Ralph Lauren 2019 Global Citizenship & Sustainability Report`. The brand pr fin bets on a more circular economy, launching proposals such as its Earth Polo, made entirely with plastic bottles and dyed in a process without water, reducing its water consumption by 20%. Ralph Lauren announced his intention to recycle more than 170 million plastic bottles in products and packaging before 2025. They reinforce with their campaign "Designed with Mother Nature in mind", what luxury laser can turn towards sustainability, without sacrificing high quality , nor design.
It is clear that during this economic downturn, luxury brands must and have the opportunity to rethink their core and underlying values. Turning towards that new luxury back to the origins, which was already developing just before the pandemic. Brands must focus on highlighting values such as quality, craftsmanship, purpose, service, inclusiveness... Now more than ever Storytelling, consistent collaboration with social and environmental causes and consumer support will be the only way to raise your confidence again and strengthen your relationship and long-term loyalty.