The luxury sector of the future:useless or useful?06 Juillet 2021
Given its “non-essential” nature, at the outbreak of the Covid crisis, the most pessimistic forecasts warned of a 40% decline in the luxury goods industry.Despite the uncertainty related to the context, luxury goods have really taken off. A plethora of figures and studies illustrate this phenomenon.
In 2020, stock market prices exceeded all expectations, withrises of 23% for LVMH, 32% for Hermès and 18% for L’Oréal.The Chinese luxury goods market also strengthened with growth of 48%, while the share of e-commerce almost doubled, from 12% in 2019 to 23% in 2020.
By shaking up the luxury goods ecosystem, the crisis has heightened existing trends (digital challenges, CSR commitments, etc.) at the level of products and brands as well as companies.Previously on a steady upward curve, e-commerce, for example, has seen its figures skyrocket with the boom in digital practices.According to an IPSOS study, 70% of the Chinese, 51% of Americans and 35% of Europeans bought luxury products online during the lockdown and plan to buy more luxury goods online going forward.
Also according to this study, luxury goods remain a real marker of social status and are more than ever associated with the notion of privilege.Already particularly significant in China, this concept is now gaining ground among American and European consumers.
But although it is confirming certain trends, the crisis is also a driving force behind change and giving rise to new aspirations.
There is a clamouring for “experiential luxury”, boosted by phygitalisation or even gamification (product boxes, social media contests, etc.)responding to a quest for heightened sensoriality in a period of physical distancing.The study’s findings show that well-being is becoming the number-one concern of consumers internationally, with the current success of the personal care product segment confirming the trend.
Another trait common to European, American and Chinese consumers is that the criteria of brand desirability is shifting towards the useful.In fact, luxury goods are now tinged with pragmatism, meaning, authenticity, inclusiveness, ecology and feminism, etc. Perceived in times of crisis as a safe haven, the luxury sector would seem to be reconciling the useless with the useful.