Luxury after lockdown: High quality, high value
Crises such as COVID-19 present the shopping public with tough decisions.
During the current uncertain times, many are anxious about surging unemployment rates and continued social distancing protocols in public.
Some shoppers will be forced to “make do” and sacrifice “nice to have” purchases for those that are considered “must-have.”
Luxury buyers, however, are less concerned about price, and more focused on quality.
High quality wins high loyalty
Luxury shoppers tend to have a strong bond with the brands they favor; customers are loyal to them for their reputation for quality.
This group is not concerned with price; sometimes, status is part of the allure, but increasingly, these shoppers see their purchases as high quality and as investments.
For instance, the purchase of a limited-run, hand-crafted handbag or a precisely cut French crystal decanter could very well be enjoyed for a lifetime before being handed down to a grandchild.
The worth of those items is tangible: It is evident in their appearance they are quality items. They are not trendy, flashy pieces evidencing conspicuous consumption and thereby casting their owners in the harsh light of criticism.
Practical lux
Instead of being symbolic of an ostentatious life, luxury goods will, at least in the near-term, likely fill a somewhat more practical need.
They will be expensive but will focus on the overall value and their storied histories.
Such brands often have rich backgrounds, and they’ll focus on their uniqueness and heritage to their new and loyal customers who are now shopping in a more discerning manner.
Understatement will rule the day, and prominent logos will fade.
The voice of luxury during the lockdown
But not all luxury brands will come out of this retail lockdown for the better.
Those who were actively promoting their products’ quality as part of an overall “lifestyle” will fare better than those who were passively counting the days until reopening, focused on cash and cutting employees.
Brands who have furloughed their distinguished associates and gone into hibernation are risking their futures.
They have damaged their abilities to create the value for which they were once renowned, and that once drove their customers’ eagerness to buy their products.
Goods & experiences
Pre-COVID, luxury goods were feeling a bit of a pinch, as millennials looked toward more “Instagrammable” high-end experiences.
Boomers, too, having bought and accumulated luxury items over the years were also looking at trips and adventures rather than jewelry or automobiles.
Analysts at McKinsey note that while the positive momentum of experiential luxury will likely persist, it will slow down in the short term as consumers temporarily revert to buying goods rather than experiences.
From depression to recession, the luxury sector has reinvented itself many times.
It is as strong as a colobolo desk, yet as fluid as 1959 Dom Perignon.
Companies that were well positioned before the crisis yet continued to have a positive presence throughout the retail shutdown could well wind up stronger, more innovative and more deeply connected to their core customers – and attract some new ones as well.
