As the world economies groan under the weight of COVID-19 infection, businesses are uncertain what the future holds after the pandemic is over.
Like all crises before it, analysts believe the Coronavirus epidemic will pass. However, what is critical for businesses is to adjust to the reality of a possible economic downturn and plan for the growth that will eventually return.
To survive, luxury brands will need to adjust very fast. They need to be adaptive and resilient in the face of the new realities of job losses and drop in consumers’ spending power.
No doubt, luxury companies and consumers around the world are pondering on how to adapt to the new reality brought about by COVID-19. Luxury brands must know that their action and decisions during this pandemic will leave a long-lasting impression on their community of consumers. The epidemic stresses the need for luxury brands, and any business for that matter, to be adaptive and resilient.
First, Luxury brands need to care for people who are close to them such as their employees, partners, customers and communities. Right now, people need to be reassured and protected. The first thing to do is explaining the measures that your business is taking to ensure everyone’s safety and security to your employees and clients.
Some luxury brands have started taking actions to support the fight against COVID-19. For example, Polo Luxury Limited distributed relief materials to citizens in Lekki, Ikeja and Agege. Some in the fashion industry who have transited to making Personal Protective Equipment, have put the safety of their workers first through mask usage and social distancing while at work.
Also, Abela Scents produces hand sanitisers while fashion brand, Nojiart manufactures face masks. Also, luxury kids clothing brand, Ruff ‘n’ Tumble suspended its kids’ line and started manufacturing Personal Protective Equipment for health workers.
These examples underscore the fact luxury brands must look at how they can fit into the new process without losing their brand essence.
While adapting to the new reality, a luxury brand must not forget to have the dexterity for relevance. At this critical time, staying relevant is important. Staying relevant will help you rethink, reinvent and self-disrupt. The first step to staying relevant is to take a step back to assess where their businesses stand today. This simply means stocking taking.
After this comes brainstorming and researching into solutions that will enable you to achieve a level of continuity through this fast-changing, unsure times. One way to achieve this is to think creatively about the needs within your communities during and after the pandemic and see possible ways to meet those needs.
Besides social distancing, at this time, offers luxury brands an opportunity to creatively look for ways to foster a sense of community by engaging their customers with valuable content, virtual social gatherings and crowdsourced online initiatives. These are ways to smartly respond to consumer’s changing needs.
The COVID-19 outbreak has increasingly played up the importance of the digital transformation of luxury. Before the crisis, some luxury brands were already taking on the advantages online retail offers while some others were reluctant to embrace it.
With the current crisis, luxury brands have no choice but to fully embrace online retail.
More people are likely to shop online now more than ever before and as professionals work from home online, the entire luxury industry will now be forced to go digital. Early users are best positioned to handle the change, but it’s not too late for the rest to adapt and leverage on digital technology. Ultimately, this strategic digital move could pave the way for more innovation, increased-personalised service, and engaging shopping experiences for consumers online.
The current situation is likely to transform the luxury industry in a new way as an industry largely driven by emotion. However, this is not to rule out the fact that luxury tends to be one of the fastest to bounce back at the end of an economic crisis. Mostly after the dust settles on any crisis, consumers want to treat themselves to luxury goods and services to celebrate positive changes in their lives.
There are many advantages for luxury brands to latch on when they go digital. There is a crop of young people who are multi-millionaires in technology and oil who are now called Millennials and Gen Z. They are the largest and fastest-growing consumer segments for luxury, this offers an enormous opportunity for luxury brands to connect and engage with this segment of customers.
And so, the digital transformation of luxury is essential today as it is easier to connect to new and existing consumers easily online now that everyone is staying at home due to partial or total lockdown as it is the case in different countries around the world.
Analysts believe that e-commerce is likely to be the clear winner of the COVID-19 crisis. However, physical retail stores have to put in place new sanitary rules like many supermarkets are currently doing when the whole crisis is over.
Most likely, more luxury brands will embrace Appointment Only model as social distancing continues even after the world economy is opened. This will certainly reduce the walk-in without appointment customer experience in physical retail. This could also mean a reduction in the number of physical stores operated by luxury brands as they transit to digital retail.
For automobiles, there is likely to be a rise of experiential luxury which has been the trend in the travel industry. What this means is that the digital shopping experience will improve considerably for auto dealers. Augmented Reality (AR) and Virtual Reality (VR) combined with holographic experiences will change the online shopping experience by placing consumers in quasi physical-store conditions. This means luxury brands, have to embrace these digital tools to bring the physical store experience alive to their clients.
NOTE: This article was first published in Business Day in the column ‘Luxe Thoughts With Funke Osae-Brown