Coronavirus: A Challenging Turn for the Global Luxury Market

  • Being almost entirely unexpected, the COVID-19 pandemic has posed unprecedented challenges for governments, businesses and societies.
  • Luxury brands have remained confident in facing the short-term repercussions of the COVID-19 outbreak; however, questions and doubts remain over its ultimate consequences. The longer containment continues, the greater the problems luxury brands will face – and the more time will be required for their recovery.
  • Since the successful containment of the Coronavirus in China, the country’s luxury market has entered a period of accelerated recovery fuelled by so-called “revenge buying” following lockdown. However, it is unclear whether this phenomenon will occur elsewhere in the world, owing to differences in the demography of wealthy clients between countries – particularly in Europe.
  • We have seen a change in the marketing tools employed by luxury brands, especially on social media. Some have succeeded by communicating positive messages and health advice on how to deal with quarantine, and delivering engaging educational and artistic programs. Others have taken actions that have been detrimental to their interests, having exaggerated their charitable achievements in combating the epidemic through propaganda campaigns whilst simultaneously over-selling their e-commerce platforms.
  • During this global health crisis, the most important challenge is to maintain client loyalty – hence the importance of training and development, especially among frontline staff.
  • Training is important to aid understanding of the needs of clients and to build trust and intimacy by delivering core brand value, especially during this unprecedented situation.
  • Amid the COVID-19 pandemic, it is necessary to alter client engagement plans to reflect shifting customer priorities, sentiments and behaviour.
  • It is commonly accepted that the world will be divided into pre- and post-corona eras –two phases with different features; this may be especially true for the luxury industry above other sectors.
  • During this global health crisis, there is a clear need for luxury brands to adapt to achieve not only their survival but continuing excellence.