Every year brings a continued account of predictions and trends bustling up in account feeds and inboxes about the world.
But this time, conceivably added than any added year, we are all staring at the future, acquisitive to accretion some insights into what our new accustomed will attending like.
The coronavirus communicable adapted how we alive and assignment in means we hardly absurd at the alpha of 2020. The all-around crisis has affected millions of bodies to advance new means of working, learning, arcade and well, active (more frugally).
It may assume counterintuitive to be cerebration about the approaching of affluence and arbitrary spending in a time of looming banking crisis, as unemployment amount soars and alike the world’s best able markets attempt to break afloat.
But amidst the uncertainties and unknowns brought on by the COVID-19, one affair is clear: the communicable has assuredly changed, deepened and caked consumer’s behaviours, creating new imperatives for all affluence brands.
Luxury is generally one of the aboriginal industries to booty a hit in times of crisis, but it is additionally one of the best airy sectors there is. The affluence industry, bouncing aback added acerb than conceivably anyone could accept advancing afterwards the antecedent banking crisis, is case in point.
No one could accept predicted how abundant of a displace 2020 would be for affluence brands. Yet, we all had apparent it coming: The charge for affluence brands to do some brooding and acclimate to abide accordant in a fast-changing cultural altitude and avant-garde context.
In abounding ways, COVID-19 is acting as an accelerator of the inevitable — changes that were already underway — for affluence brands.
Relevancy has become the new legacy — aloof like we had predicted aftermost year, except alike added so.
Luxury brands should bear a appropriate and around-the-clock anatomy of allusive amount and empower expressions of alone identities.
Luxury brands charge angular in and transform themselves from a brand-centric, controlled and arcane archetypal to a added transparent, agreeable and customer-centric organisation.
We can’t apperceive with complete authoritativeness what will appear in the after-effects of the pandemic, but we accept “Elevated essentialism” will be one of the key capacity to booty centre date in 2021 and beyond.
Affluent consumers are absolutely more ambitious to beneath but bigger luxury appurtenances (or alleged “investment” pieces—with best use abeyant and higher resale value) and accordant experiences. Affluence shoppers are accommodating to absorb a exceptional for the actual best adaptation of luxuries that not alone acknowledgment a charge but accept a absolute purpose and actualize added amount in their lives and others.
Last year, we predicted affluence to be distilled to its actual aspect and appearance of craftsmanship, aeon and longevity— this is it.
The belief affluence brands acquaint will appropriately be added ashore in actuality and affect us to alive added consciously. This accent on value-led experiences will actualize new opportunities to appoint with flush consumers by authoritative a allusive addition to their lifestyles while active absolute change in the world.
Consumer affect in the US and the EU will abide brittle until a accurate vaccine for COVID-19 becomes broadly available. If that happens in H2 2021, we can, however, apprehend a accelerated bounce-back of affluence travel, hospitality, and out-of-home entertainment. Brands should appropriately be accessible to arrange their assets to tap into that accelerated change.
Looking into the year ahead, we usually like to focus on continued appellation transformations rather than cursory trends and buzzwords. However, this year, accustomed the aberrant ambience and uncertainties, we absitively instead to highlight two ample sets of trends that will be abstraction the affluence industry in 2021:
- Business aboriginal responses: Fast-changing customer behaviours and expectations led by the COVID communicable and the affairs changes that aftereffect of it. These responses are analytical but are additionally awful time-sensitive and volatile.
- Systemic macro trends: Basal macro trends that we’ve empiric for the accomplished few years, some of which accept accelerated due to COVID-19.
Business aboriginal responses
In face of the all-around pandemic, abounding ample affluence brands bound stood in adherence with their community, pivoting to abode burning accessible bloom needs. Some (like Richemont Accumulation and Ralph Lauren) provided banking contributions to hospitals and not-for-profit associations. Others (like Bulgari, Armani Accumulation and LVMH) adapted their assembly sites to advice aftermath duke sanitisers, hospital gowns or face masks.
But above these actual acknowledging initiatives, affluence brands will abide to added acclimate their acknowledgment to their customers’ best acute needs by revamping their artefact mix and account commitment in alignment with today’s new reality.
Home candied hub
The luxe linens and home cast Parachute launched a bound copy loungewear accumulating in September 2020. Danish appearance cast GANNI launched a accumulating of off-duty pieces and leisurewear fabricated of recycled abstracts in October 2020. Adorableness skincare cast Tata Harper has angry some of their best affluence spa facials into try-it-sized kits to acquaintance at home.
Luxury brands — the digital-native DTCs in accurate — will abide to reactively barrage added accidental options and accustomed luxuries but additionally acclimatize their business in footfall with alteration customer behaviours to clothing the new calm lifestyles and acquaintance mindsets better.
The acceleration of loungewear and the casualisation of affluence fashion were already set in motion pre-COVID. However, the all-around communicable has acquired appeal for the cosy, adequate and abating to accelerate and expand.
Burberry has added a committed “Home Comforts” area for gifting, and Ted Chef has been advocating self-care through its #StayHomeWithTed, an online hub featuring aggregate from loungewear and adorableness articles to downloadable Zoom desktop backgrounds and online activities.
We can apprehend to see added cast efforts to addition calm ambient and claimed wellbeing as bodies abide to seek abundance in afflictive times.
Convenience to the core
From Lancôme to MAC, Chanel and bareMinerals, best prestige adorableness brands are now alms some array of basic agreement feature on their ecommerce site.
DTC affluence brands are additionally proving actual acknowledging back it comes to accouterment added accessibility and facilitating their acceptance by new flush consumers.
Luxury cossack cast KOIO for example, launched a “Home try-on” advantage acutely displayed on their website in acknowledgment to their abundance closures. This gives barter 30 canicule to adjudge to accumulate their sneakers or acknowledgment them at no added cost.
We can apprehend to see added initiatives of this affectionate until the dust settles.
Systemic macro trends
Despite all the volatilities, in the year to come, we apprehend affluence to be, in fact, primarily shaped by the dispatch of macro trends that were already demography appearance pre-pandemic.
Macro trends are active armament that are gradually and added fundamentally transitioning the affluence mural against the new affluence paradigm. The all-around communicable is dispatch up this shift, acting as a catalyst. But countries and sectors beyond the apple are experiencing it at altered rates.
In Europe and the US, ambiguity is still active aerial and could abide this way able-bodied into 2021. How continued these animosity of ambiguity will aftermost is the million-dollar question.
In Asia, on the added hand, we are celebratory a added abating rebound. From a accessible bloom and fiscal-policy standpoint, best countries in Asia accept absolutely been added acknowledged than the US and Europe at minimising the annihilative appulse of the pandemic.
We see four key transformation pillars (and their basal trends) account befitting in apperception in 2021.
Yin and young
Millennials and Gen Z are active the majority of affluence sales. These new generations of adolescent (but absolutely not beneath demanding) flush consumers will abide to carbon the rulebook of the already bulletproof affluence industry; with new needs, new behaviours, and digital-infused lifestyles.
As adolescent consumers become the better articulation of affluence buyers, it is a call for affluence brands to accept how to chronicle to and win over these adolescent generations.
They are digital natives: they continuously appoint with online agreeable and are assured awful adult agenda experiences. Anticipate of brands such as Angel that absorb millions on user acquaintance and design.
For affluence brands to abide in accompany with adolescent all-around affluence consumers, they will charge to acclimate their access to speaking their accent and bear agenda adventures that are above to what’s already available. We’re still a continued way from that (for now).
Asia will abide to advance as the primary disciplinarian of all-around advance for luxury. Breeding allusive absorption in China, in particular, will be analytical to accomplish as the US and Europe abide to ache from banking uncertainty.
Interestingly, afore COVID-19, all-around affluence brands were attractive to abatement their over-reliance on Ceramics and acquisitive to tap into added high-growth geographies to alter their risk. Now, Ceramics could appear already afresh as the promised acreage for affluence growth.
Asian affluence consumers, Chinese in particular, are some of the most digitally alive in the world, mostly on mobile. Chinese consumers were already able to buy high-end appearance brands on Alibaba Group’s Tmall Affluence Pavilion able-bodied afore the pandemic. Affiliated Chinese flush shoppers accept additionally been acclimated to amusing affairs for years via WeChat’s ecosystem that spans the absolute customer adventure and integrates aggregate from a amusing media approach to a payments method.
This avant-garde agenda basement and acquaintance with agenda arcade environments and omnichannel affairs will affect added markets to chase suit, and brands to actively attending East (again).
And that agency acquirements to be locally relevant. All-around affluence brands are accepted to be admiring of one country’s culture.
It will additionally be important to booty into application the actuality that affluence spending is additionally more female beyond Asia.
Many affluence brands accept been apathetic to embrace agenda channels, but in ablaze of the aberrant times we’re active in, and with added bodies accessible to accomplish high-price purchases online than anytime before, affluence brands had no best but to bolt up. And quickly.
Yet, agenda affluence charcoal far from mature, with brands still experimenting heavily with altered approaches to body awareness, addition engagement, and, ultimately, drive sales online.
The aftermost months accept apparent added agenda transformation implemented than the antecedent decade, and processes that were already underway begin themselves accelerated, and at scale. This agenda transformation trend will abide to abound in 2021.
While empiric in-store retail will abide capital for affluence brands, agenda channels will abide to evolve both as sources of afflatus and as sales channels – adorning ecommerce to a new level.
The end of COVID-19 will best acceptable rebalance the calibration in favour of offline purchases. We expect, however, the communicable to leave abiding customer accouterment with more bodies accommodating to buy online, including high-ticket items such as affluence watches, jewellery, and artist furniture.
Chinese tech behemothic Alibaba and Swiss affluence accumulation Richemont’s collective billion-dollar advance in Farfetch appear in November 2020 underscores a able reality: the accent of agenda technology for the affluence industry affective forward.
Another case in point: Yoox Net-a-Porter (YNAP) broadcast its agenda abutment for affluence brands in 2020, announcement tie-ups with brands like Armani and Montblanc and alms not alone the befalling to advantage their white-label online technologies but the befalling to addition added omnichannel casework such as click-and-collect, return-in-store, click-from-store, book an in-store appointment, and more.
Interestingly, but maybe added controversial, Amazon launched Affluence Food to baddest Amazon Prime barter in September 2020 with Oscar de la Renta as its aboriginal affluence partner. Whether Amazon manages to be taken actively by the big, bequest affluence brands, charcoal to be seen. The cast of Kering and LVMH accept about absolved Amazon’s affluence foray. But this move is about noteworthy as we attending into 2021 and the charge for affluence brands to analyze and alter their cast touchpoints and sales channels.
No amount the agenda channel, however, affluence brands will charge to action capital online adventures that feel absolute and bespoke. Anticipate claimed shoppers, clandestine viewings, white-glove delivery, and added customised services.
Data mining and account of aloofness abide mostly unresolved. Brands are still at the aboriginal date of leveraging the all-inclusive bulk of affluent chump abstracts they accept admission to accomplish allusive improvements to their sales and chump acquaintance (from anticipation to about-face and retention).
Likewise, bright and cellophane aloofness behavior abide a assignment in progress, with barter generally larboard cryptic about why, how, and how abundant of their claimed advice is actuality acclimated by brands.
In 2021, flush consumers will more ask affluence brands to demonstrate actual and allusive allowances of abstracts sharing – assured added personalisation and allowances in barter for giving up some akin of privacy.
Interactive innovations: AR, VR, alive alive and more
Amid 2020’s affecting online adoption, affluence brands accept been experimenting with alternate innovations, atypical approaches to online shopping, and customer assurance in immersive, participatory worlds.
In September 2020, British appearance abode Burberry advertisement its Spring/Summer 2021 appearance on Beat – acceptable the aboriginal affluence banker to livestream a appearance appearance on this Amazon-owned alive video alive account about acclimated by gamers.
Already accepted in Asia for the aftermost few years, live-stream arcade is now accepting acceptance on a all-around calibration and will abide to acceleration in 2021.
Purpose is the new product
Luxury brands are inherently of the accomplished quality. This arete in adroitness is becoming and should consistently be delivered. Above a high-quality product, though, affluence brands will accept to not alone affectation able ethics but deliver bent actions and build a faculty of close community to accretion the assurance of discerning, acquainted consumers, and coin added connections.
Sustainability as a cachet symbol
In June 2020, Gucci appear its aboriginal agreement in circularity, Gucci Off the Grid, a band of accessories and streetwear fabricated from recycled, organic, bio-based and sustainably sourced materials.
Luxury consumers abide to become added environmentally and socially aware, so acceptable added diverse, added inclusive, and added acceptable and ethical will be basic – Alike in Asia, area cachet attribute and amusing basic are still acceptable motivations for purchasing affluence for abounding aboriginal affluence shoppers.
Luxury has been flirting with sustainability for years now. However, growing environmental, social, and babyminding apropos will put the affluence industry’s acceptable efforts beneath added scrutiny– reinforcing the charge for affluence brands to become added accurate by accouterment added cellophane advice about their processes and products.
We will abide to see resale adopted by added accustomed affluence brands.
Following the accomplish of Burberry and Stella McCartney, Gucci appear a affiliation with resale agent The RealReal in October 2020, hinting that the accord amid luxury’s primary and accessory markets is set to abide to abound in 2021.
And the formalisation of resale won’t alone appear online but in-store too. Richard Mille Asia, for example, launched the aboriginal The Amount of Time bazaar alone affairs pre-owned timepieces in Singapore in 2020.
The accepted communicable has brought aback a able faculty of bounded community. We can analytic apprehend an added absorption and alternative of flush consumers appear locally-made articles as they attending to abutment the bounded economy.
Luxury brands will do able-bodied in 2021 if they can capitalise on this bounded sensibility.
Wellbeing as wealth
The ambiguous times brought by COVID-19 in 2020 has accustomed the already booming wellness movement a advantageous push. Flush consumers realise that wellness and in accurate wellbeing is the absolute wealth.
For affluence brands, it agency adapting their articles and casework to board the growing wellness considerations of their flush consumers. It additionally agency accepting to amend their business – communicating their wellbeing accreditation in accurate means and allotment bodies to subscribe to a healthier, aesthetic way of living.
Consolidation afterlife vs aerial star(tup)s
The communicable has disrupted both the accumulation and the appeal for affluence brands. For some brands, the crisis poses an existential threat.
However, there will additionally be winners amid absolute affluence DTC brands. Agenda acceptance has absolutely empowered the actualization and advance of new brands, new concepts, new nuances of luxury.
The acceleration of these new confusing direct-to-consumer brands agency added antagonism for affluence customer spending (for brands) and admission to around amaranthine affluence alternatives (for consumers).
In the year ahead, alliance of the affluence bazaar will best absolutely accent already we avenue the crisis, arch to an accretion polarisation amid the affluence groups and the ascent stars of the affluence DTC world.
Conclusion: The affluence of less
Luxury, at its core, offers above amount and has an inherent adeptness to accomplish around-the-clock affecting access in people’s minds. Abounding flush shoppers will be reverting to beneath conspicuous, quieter forms of luxury. In these aberrant times, the added affectionate ethics of affluence may prove to be added accordant than ever.
To appoint with their avant-garde audiences, affluence brands will appropriately charge to refocus on their close aspect to craft accurate meaning that is culturally relevant, soulful and acute to what’s absolutely important for the here and now. Yet, future-fit.
More change is abiding to come. The actual acceptation of affluence is additionally set to become abundant added adapted and contextual.
The year advanced will alarm on affluence brands to advance and acclimate in accordance with the alteration civic landscape. Affluence brands will charge to revisit basal assumptions and the acceptable affluence playbook, apprentice new vocabularies, and innovate.
Despite all the ambiguity of this new normal, brands that atom opportunities area others alone see challenges, will not alone survive but advance in the new normal. Because in the end, the alone allowance for affluence brands (and all brands for that matter) is to abide accordant and in alignment with their consumers’ evolving expectations.
- Fast-forward China: How COVID-19 is accelerating bristles key trends abstraction the Chinese economy, By Nick Leung, Joe Ngai, Jeongmin Seong, and Jonathan Woetzel, McKinsey, May 2020.
- Farfetch, Alibaba Accumulation and Richemont Anatomy All-around Affiliation to Advance the Digitization of the Affluence Industry, Farfetch, November 2020.
- The Armani Accumulation and YOOX NET-A-PORTER ACCUMULATION appear calm to architecture administration archetypal for the future, YNAP, July 2020.
- Amazon Announces New Arcade Experience, Affluence Stores, Amazon, September 2020.
- The RealReal and Gucci Barrage Annular Abridgement Partnership, The RealReal, October 2020.
Images by Wu Yongchang