How COVID-19 Is Reshaping Luxury Fashion
Posted on February 17 2021
Just like it’s changed the way we go about our everyday lives, the COVID-19 pandemic has had an undeniable impact on the luxury fashion sector.
But while the luxury fashion industry has had to shift in recent months, this doesn’t hearken the end of designer retail. Rather than stopping completely, the luxury fashion industry has shifted in a few key ways demarcating a change in the industry as we know it.
One noticeable difference in luxury fashion in a post-COVID world comes down to something quite simple: Customers want different things. Of course, this phenomenon is to be expected. Why would consumers buy formalwear at a time when large gatherings are prohibited? Most of us (unfortunately) aren’t shopping for ball gowns to wear while working from home.
Because daily life looks different, the “new normal” is being reflected in what’s selling. As far as luxury fashion is concerned, this isn’t necessarily a bad thing. Unlike traditional customers, luxury shoppers are more driven by emotions, Forbes reports. So while a luxury shopper might not need formalwear at this moment, they are potentially more included to splurge on designer loungewear to make them feel more comfortable in what is an uncomfortable global situation.
On average, daily spending on luxury fashion is lower for most major retailers. However, loungewear, resort wear, and lingerie have all seen an increase in sales. While resort wear might seem inexplicable at first, consider that luxury shoppers are likely among the lucky few who can isolate away from home. Many of the affluent customers who loyally shop and luxury brands could be spending time in isolation at a resort or holiday home, necessitating new resort wear options.
But while luxury fashion fans might have the ability to stay at a second home domestically, international travel restrictions continue to limit how they shop. Before the pandemic, luxury shoppers might have spent proportionally more while shopping on holiday. According to DMARGE, stock availability and comparatively lower prices in Europe — where many major fashion houses are located — may have enticed luxury spenders to make big purchases while travelling.
With a shift away from travel shopping, therefore, many Western European fashion brands are seeing a decline in sales in major European cities. However, the change is reflected by an increase in overseas sales in countries where tourism shoppers come from. According to DMARGE, luxury fashion outlets in both the U.S. and China reflect a redirection of spending that would have otherwise occurred overseas.
With a change in consumer demands and shopping habits, it has become necessary for luxury fashion brands to make changes as well. Brands across the world have had to reposition themselves to their audiences by offering support in creative, new ways. Whereas VIP loyalty programs of major fashion outlets and department stores once relied on exclusive events, they are now having to engage digitally with exclusive clientele.
The Zoe Report highlights the example of a live Zoom Call with fashion designer Stella McCartney, hosted by Net-a-Porter. Where high-spending loyal customers of the online retailer once might have received a seat at a fashion show, for example, they are now being offered more virtual experiences to fill the gaps. And the good news is: Customers are satisfied.
“A lot of luxury experiences come from how safe and secure people feel in the current climate,” The Zoe Report shares. To fulfil that standard, it is now the imperative of brands to cater to consumers in ways that were unimaginable before. “We had a customer ask us to source a limited-edition Legend of Zelda Nintendo system,” global vice president at Farfetch Jamie Freed shared. And did Farfetch deliver? Of course. “It came with a price tag of $20,000.”
While it’s difficult to say what might happen long term, the good news is that the luxury fashion industry is well-positioned to survive the COVID-19 crisis. Just like another industry, fashion brands will have to change their approach. However, by understanding customers wants, needs and habits the fashion industry may be able to use the current moment as an opportunity to connect even more personally with consumers.
At the end of the day, change is inevitable. Whether this pandemic has accelerated the inevitable or not, many brands have found themselves increasing their virtual and local presence. By building closer connections with customers in this way, they are retaining loyalty even despite an uncertain economy.