LUXURY RETAIL: ADAPT, DIGITISE & WIN

In its latest report titled ‘Fashion and Luxury: Winning Recovery Strategies in a Post-COVID-19 World’, Euromonitor International provides a positive outlook of the sector in times to come, adding that it is set for a strong rebound driven by pent-up demand and domestic consumption. Players in the sector thus need to be well-equipped to make the most of the upcoming demand.

With key shopping destinations opening up again, vaccination programmes being rolled out further and life returning to normalcy, the luxury and fashion industry is poised for a strong rebound post the COVID-19 pandemic, predicts the latest report by Euromonitor International. Pent-up demand and domestic consumption are going to fuel this growth, it adds.

Luxury goods and fashion were amongst the hardest hit consumer markets by the global pandemic. With international shopping destinations, the major driver for luxury goods, recording poor tourism flows in both 2020 and 2021, the total global tourist spending on personal luxury goods fell by 54% in 2020, and is still down by 50% of pre-pandemic levels. The top 10 source markets saw sharp contractions is sales that fell from anywhere between 12% and 88%. And while COVID-19 continues to threaten both fashion and luxury goods market as global travel remains down by 72% and there are new risks on the horizon, luxury goods, apparel and footwear are expected to see a sharper rebound in sales than the wider fashion industry.

What is accelerating consumer shift?

1. Digitalisation: The COVID-19 pandemic has accelerated working from home and encouraged more people to move away from large cities in favour of suburban areas. The digital transformation has changed the rule book and the rise in e-commerce and new lifestyle habits is challenging long-held ideas. Such changes in consumer behaviour will shape future retail strategies. Luxury and fashion retailers must rethink their distribution strategies and explore new business models, the report states.