Digitalisation the way ahead when going out is a luxury   

The Covid-19 pandemic has provided us with a skewed reality, our normal lives altered irrevocably for the foreseeable future. The pandemic has affected not just people, but various businesses across the world, especially the luxury business.

Experts are still figuring out if it is just a temporary blip or is it time for a complete overhaul in the way things are run. However, things are not as bleak as they may seem as many luxury companies are adapting to the ‘new normal’.

So how bad is the damage? By the end of 2020, a report by Bain & Company said the market for luxury goods had come down by 23% to €217 billion. However, the report also stated that online shopping of these goods had doubled. The only country to show any signs of resurgence was China.

However, by this year, the luxury market has slowly started limping back to normal. A report released this year by Bain & Company stated that while China continues to stay strong, the United States too has started showing signs of recovery thanks to the vaccine rollout. The report estimates that more than 85% of the purchase of luxury goods was online.

The turnaround, albeit slow, is visible. As per ANI, India Sotheby’s International Realty has made more than 50 transactions on luxury properties in India and Sri Lanka. Despite the lockdown, they have witnessed a 100% rise in sales from last year for the first six months of 2021. The luxury automobile sector as well is seeing a turnaround. Italian automobile giant Lamborghini has sold 26 cars in the country so far as compared to 13 last year, a 100% jump in sales. Mercedes witnessed a spike in sales too.

E-commerce websites have been flourishing during this time. Unable to go out, people have started looking online to satisfy their craving for luxury items. Websites such as Darvey, Nykaa, NNNOW and AJIO Luxe among others are leading in terms of online sales.

Luxury brand Gucci has started allowing shoppers to video chat with employees before making a purchase. The sale of luxury beauty products, specifically, has gone up.

A recent Euromonitor International report said a total of 12.1% of luxury beauty and personal care items are sold through e-commerce platforms.
Luxury brands have started using technology to provide consumers with a more immersive experience. For example, Burberry allows shoppers to add things to the cart from their Instagram page or the memory mirror at Neiman Marcus. As per internetretailing.net, online store Farfetch has reported a 40% increase in sales since it joined hands with retail partners and started trials of customised omnichannel experiences for its customers a month ago.
On the other hand, some industries are struggling to get back on their feet. The hospitality industry has been badly battered by the pandemic. The vaccine rollout has begun and yet most luxury hotels have done very little business, with many small establishments shutting shop. According to the Federation of Hotel and Restaurant Associations of India, the industry has incurred a loss of $17.4 billion due to the pandemic. Many high-end restaurants and bars have had to do a complete rehaul of their menus and/or stick to takeaways to stay afloat.
The retail sector has not been able to recover completely either. Malls have been allowed to open in some states but they can only allow a limited number of people. Shops too can only function during fixed hours. People, even if they are vaccinated, are still very apprehensive about going out, especially after the devastating second wave.
However, on the jobs front, many luxury companies are still hiring. “E-commerce platforms and companies are hiring a lot of people. Companies that have started their own apps need people. Companies are looking for people with experience or those who specialise in specific fields,” says Smit Mehta, owner and founder of Talent Bay.

The luxury industry is going to adapt and survive no matter what. Why? Because people love buying. In the current situation, retail therapy helps make the current situation a little more bearable for many. So even while you sit tight and wait for the crisis to end, you can still get your favourite bag, shoes and dress, even if going out is not an option.

To pursue a career in the Luxury Industry, join the Master’s degree in Luxury Brand Management at the INSD School of Luxury. A 12-month program that lets you study in India and Paris and work for up to 6 months, accredited by College De Paris.