3 Luxury Trends That Prove COVID-19 Changed The Industry Forever

It’s no news that COVID-19 greatly affected most sectors of the economy, but for the Luxury market the pandemic impact might have been much more profound.

Historically, luxury brands especially in Europe and in the United States have been fueled by international travel and tourist spending. However, with the health crisis dragging itself for more than a year now, the world’s most esteemed brands aren’t likely to see travelers returning to their favorite shops anytime soon. 

The industry has been reticent to embrace e-commerce fearing it would damage brands’ reputations, but the luxury market’s 23% fall in current exchange rates—one of the largest ever recorded—is accelerating its online innovation and transformation at unprecedented pace.

As luxury brands focus on generating revenue from the only channel available in many countries—ecommerce—and encouraging customers to spend more money at home instead of abroad, current macro trends are making it clear that the pandemic will result in long-lasting consumer shifts for the sector.

Check out below 3 luxury trends that are arising in 2021 and confirm how the industry has been evolving to increasingly embrace digital:

1. Gen-Z and Millenials: brands need to meet the digital needs of the majority drivers of the industry

The time has come for the digital natives. With an expected market share of 45% by 2025, Gen-Z and Millennials are the generations that are currently driving global personal luxury good sales, and are naturally bringing new needs, habits and digital-infused lifestyles to the industry.

Unlike previous generations, they often engage with online content and not only want but expect highly sophisticated digital experiences. Luxury brands need to understand these expectations in order to win young generations over.

Therefore, investing in user experience and design to remain in sync with younger global luxury consumers is simply not negotiable. Brands will need to adapt their approach to start speaking their language and delivering digital experiences that are luxurious and superior to what’s already available. 

2. Luxury digitalization & virtual initiatives: fueling major industry opportunities across the value chain

As customers get increasingly more used to surprising digital experiences to make their purchases, luxury brands need to step up their games. In the pursuit of audiences’ attention with a wow factor, luxury brands are developing an appetite for artificial intelligence and augmented reality applications. 

Many fashion houses are now using a variety of channels creatively to promote and display their new collections, engage customers, and increase loyalty. The pandemic has undoubtedly contributed to the adoption of disruptive technology to compensate for the lack of in-store experiences.

Burberry, for example, recently launched an AR shopping tool that allows customers to experience and buy their products in its virtual shop, while Dolce & Gabbana filmed webcasts, recreating the interactions between customer and sales assistant to explain products online.

3. Athleisure & loungewear: the “Netflix & Chill” fashion

The rise of loungewear and the transformation of luxury fashion were already set in motion pre-COVID. However, the global pandemic has caused demand for the cosy and functional to skyrocket and expand.

Retailers at every price point are already taking note of consumer interest in wearing clothes that feel good. For luxury brands, it will be all about making the bridge between comfortable and well-designed elevated pieces.

Proving that getting comfy can be considered high fashion, Dior put its first loungewear collection—Dior Chez Moi—as a part of its Cruise 2020-2021 collection. Rodarte has also included rose-splashed sweats in its 2021 ready-to-wear lookbook.

All in all, these trends clearly demonstrate that the pandemic has also left deep roots in the luxury industry, and how the global lockdown has made luxury brands get creative to find solutions to survive. Even though the pandemic is more likely than not to bring more uncertainties into 2021, one thing is for sure: luxury’s digital shift has only begun.

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