One man’s luxury might be another’s basic requirement. What does the (I would like to say) post-Covid environment look like for luxury brands?
Other than perhaps an aspirational focus, I don’t belief that financial constraints due to Covid are relevant at the real top end. Neither have there been overwhelming negative effects for most luxury brand because of such financial challenges. Those who regularly consume luxury products, are often not as much affected by everyday economic influences. But affordability is not the only factor influencing purchasing decisions.
Businessinsider.co.za this week reported that South Africans are opting for camping rather than booking alternative holiday accommodation. For the average Joe, it might be the more cost-effective option, but there is a host of other reasons why camping might be more popular now. Perhaps we need space and the outdoors after being locked down or perhaps we feel safer in our own caravan or tent and in a “fresh-air” environment than in hotel rooms and dining rooms? In a similar way, the performance of luxury brands are affected by much more than the pockets of consumers.
The trend to prioritise experience above product is nothing new. In tourism, experience – especially when it is authentic and can be customised – has been a very important focus. “Post”-Covid, we see an even stronger trend in this direction. The threat of a global pandemic and being subjected to lockdown, had a significant effect on the way we think and what we prioritise. How are these affecting the purchasing decisions in the luxury market?
While traditional values are changing, the search for a meaningful life is more topical than ever. Holistic sustainability and a healthy community are very important and consumers expect brands to act responsibly. Not even luxury brands are above being kept responsible for their choices when it comes to ethics and the environment. “Consumers want to know: If I buy this product, am I doing a bad thing for the world or a good thing? They want to understand brands’ attitudes towards workers, the environment, fair wages, local production, charitable giving, disadvantaged people and many other things.” (Read more on Forbes.com)
Money makes the world go round, but time is just as valuable a commodity. Real luxury is to have the resources to save time and to open up your schedule for the things or experiences that hold more meaning. And essentially the meaning of luxury products might also have changed. Other than quality products, made with the best material and attention to detail, luxury products now says more about you than your commitment to quality and the depth of your pockets. Forbes.com says: “The attractiveness of products that enhance the experience of avocations consumers love broadens the range of products that compete with traditional luxury and make the sale of luxury as it has been defined for a long time much harder and more competitive.”
I believe luxury brands will stay relevant, but only if they keep very close track of consumer expectations. According to thedrum.com the most important reasons luxury brands might struggle in future are that they are often experience-focused, something that is not that easy to manage into an increasing e-commerce environment and that they will have to change their focus to the intangible, non-material aspects rather than product quality and price.
If everyday brands can embrace a creative approach, stay on trend with consumer expectations and have their values in place, there is no reason why luxury brands can’t do the same. In fact, often, story-telling and heritage are intrinsic to the luxury brand. I think, when addressing the need for meaning and authenticity, luxury brands should have no problem to stay relevant. (Read more).