What Can We Expect From The Luxury Market After COVID-19?
The COVID-19 crisis is the kind of situation that our world has never experienced before. Not only has it turned into a global pandemic but, more importantly from consumer behaviour point of view, it has impacted individuals from all walks of life and all social and economic statuses. The virus does not spare members of royal families or top political leaders, individuals who often appear to be resistant to any other kind of crisis.
The unique character of this situation has immense impact on customer's willingness to spend money or, perhaps more accurately, their perception of spending money.
As reported by the Index of Consumer Sentiment (ICS), coronavirus has strongly impacted the way consumers perceive their financial situation. This sentiment has particularly affected the high-income customers (the Index focuses on American market) and consequently their confidence as to discretionary spending. In other words, people no longer feel comfortable spending high amounts of money on goods and services which are not strictly necessary.
Consequently, Altagamma in association with Boston Consulting Group and Bernstein estimated that COVID-19 global crisis will lead to between €30 billion to €40 billion drop in sales in luxury industry.
Despite these gloomy analyses however, there is no doubt that the industry will bounce back, question being when and in what format. There is a number of elements that luxury companies should be taking into consideration right now in preparation for this revival.
Source: Hospitality Net
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