The COVID-19 pandemic has had a profound effect on both society and the economy, leading to a complex impact on the luxury market and consumer. But in most cases, the pandemic has simply accelerated trends that luxury brands were already grappling with, bringing the future closer.
We found luxury consumers have been resilient – even benefitted financially – during the pandemic. Although spend in some luxury categories declined (notably fine dining, hotels and experiences), resilience meant spend was re-distributed elsewhere in the sector.
Essentially, Covid altered the shape of the luxury market. But, overall, the brands can look forward with optimism if they’re able to adapt and keep up; capitalising on new opportunities.
We’ve seen the luxury consumer segment grow throughout the pandemic and, as a result, it’s become more diverse. High Net Worth Individuals (HNWIs) and Ultra High Net Worth Individuals (UHNWIs) are now younger and less likely to be from inherited wealth in the West. This diversity is creating new demands on what luxury brands should be. Even how they’re defined.
The pandemic also shaped how and where consumers spend. Although most movement restrictions will be lifted, people are placing greater value on isolation and space – and those who are able and willing will pay for this. Luxury consumers at all wealth levels have also used the pandemic period as a time of reflection, with many now putting a greater focus on living in the moment and time with friends and family. And those larger purchases are happening sooner than originally planned.
As with the wider population, sustainability and brand responsibility – both of employees and how brands play a role in society – have come to the fore. This is exacerbated by a younger consumer, and there will be greater scrutiny on luxury brand credentials in this space – something we believe many will be able to capitalise on.
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The evolution of the luxury consumer: post pandemic is free to download.
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