IMPACTS OF COVID-19 ON THE LUXURY MARKET AND HOW TO REBOOST

1. Impacts of COVID-19 on the luxury market and how to reboost Table of contents Impacts: Dramatic drop and late recover  Luxury marketing in the time of COVID-19  Shifts in consumer behaviors during the time of COVID-19  Increased interests in digital experiences and online content. 

2. Social involvement is being carefully assessed.  Consumers with medium and medium-high spending powers seeing luxury as an investment.  Foreseeable higher spendings from China.  What can luxury brands do to keep their brands high  1. Conduct in timely communications with all stakeholders  2. Involve in socially responsible activities  3. Carry out necessary activities to maintain brand exposure, as consumers are in need  4. Adjust your channels and go digital  5. Create direct-to-consumer excellency for better understanding and closer relationships  6. Look for potential opportunities and be part of the solution. 

3. Use of technology in post-crisis luxury marketing  Contact Hapticmedia to get a technological boost to your sales  References 

6. Impacts: Dramatic drop and late recover The coronavirus pandemic has strongly impacted the first quarter of 2020, affecting the luxury industry to its core. Signs of a huge influence started in January, when the virus was striking China, the country responsible for 90% of the 2019 global luxury market growth and 35% of overall luxury sales. While things spread and authorities started taking measures, brands found themselves dealing with the inability to produce and sell their goods, since lock-downs began to shut factories and suppliers in countries like Italy and France. China is looking stable for the time being and consumers appear to be slowly returning to their lifestyles; therefore, luxury marketers want to know what to expect from the future. Still, at this point, too many variables prevent specialists from actually issuing a clear scenario of how this pandemic and the measures taken will affect luxury brands: we don’t know when the virus will stop spreading globally and thus, can’t anticipate how it will impact the economy, as well as consumer behaviors. According to Bain and Boston Consulting Group, sales could drop up to 35%this year, resulting in a total decrease of 600 billion dollars compared to 2019, which is significantly bigger than that of the 2008 - 2009 recession. This is an understandable fall, if we take into account certain factors like outlets and factory closing, threats of unemployment due to the pandemic or just a more cautious approach to spending money, powered by a consistent fear of a potential economical crisis. In its Executive Briefing issued on March 25, McKinsey and Company estimated that, as the second most affected industry, after Commercial Aerospace, Air & Travel will get a restart in the first or second quarter of 2021, while Apparel, Fashion and Luxury, which is down by 28% in terms of stocks, should recover late Q2 or Q3 of 2020. There exist, of course, multiple variables to this pandemic, but there is one thing on which we may agree: at one point, this situation will stop and consumption will return to better parameters. To prepare for those moments and to also make the most of the context, marketers need to be on top of the return, re-imagine and reform to develop strong strategies that meet updated consumer trends.

7. Luxury marketing in the time of COVID-19 When going through difficult times with reduced revenues and profits, businesses see themselves as forced to lower costs and one of the first things on which they cut down are marketing budgets. “Why invest in marketing towards a group when it does not have the power to buy?”, appears to be the question. The answer is actually intuitive and those who have been through the 2008 - 2009 recession know it well: an optimized strategy that responds very well to consumer insights, catering to both their emotional and physical needs, helps brands maintain relevance and market shares and strengthen the bond they have with their audiences. This way, when consumption restarts, and it always does, these companies are the first to get back on track and enjoy the benefits. Knowing these, luxury brands have quickly amended their strategies during the crisis to ensure engagement in consumer-oriented and socially responsible initiatives. The first step taken by big name companies was to adjust communications channels and try to move as many offline events and campaigns as possible to online. Extra hygiene and safety measures were taken and, where possible, store traffic was discouraged. This act showed good business acumen while delivering respect and care for both customers and employees.

9. LVMH prepares to manufacture and distribute free hydroalcoholic gel in large quantities; Source:LVMH In addition, Luxury groupssuch as LVMH, Kering and Estée Lauder all decided to involve in the fight against COVID-19 by helping governments and health institutions, LVMH and chanel transforming existing product lines to produce face masks and sanitizers, Bulgari funding coronavirus research, Kering, LVMH, Moncler, Ralph Lauren, Capri Holdings, Gucci and Richemont Group, which owns Cartier, Van Cleef & Arpels, and Chloe, all making donations and collaborating with state officials to help solve resource shortages so on. Taking an example, Moncler announced a $10.9 million donation, highest of all luxury brands so far, towards the construction of a new hospital in Milan, while controversial brand Dolce & Gabbana declared that it was funding a study into coronavirus at the Humanitas University. Shifts in consumer behaviors during the time of COVID-19 Up til now the coronavirus pandemic has spread in 200 countries. With governments and communities dealing with this virus, citizens start to approach daily activities differently with a change in their behaviors. Here are some shifts that are bound to impact the way we look at luxury marketing: Click here to get more info about: covid 19 luxury Increased interests in digital experiences and online content. During the quarantinedigital consumption may increase to 60% or more, according to Nielsen research. Even in Hong Kong, which is mostly a brick-and-mortar market, consumers quickly adjusted and downloaded e-commerce apps. Moreover in Asia, the region that was firstly struck by COVID-19, social media quickly became platforms for sharing news about COVID-19 cases and related regulations.