# The five steps to help the luxury market recover from Covid-19
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-10-12
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Luxury Market Resilience Amid Covid-19
Meta Description: Discover key insights on the personal luxury goods industry amid Covid-19, including trends, regional dynamics, and strategies for long-term growth.
URL: https://financedigest.com/the-five-steps-to-help-the-luxury-market-recover-from-covid-19html

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![Kevin O’Farrell, Associate Vice President at Analytic Partners](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/kevin-ofarrell-450x450-1736837576904-compressed.jpg)

_By_ **_Kevin O’Farrell,_** _Associate Vice President at Analytic Partners_

Amid the turmoil of the Covid-19 pandemic, while some business sectors thrived, others experienced significant pressures – and luxury products and services invariably fell into the second camp.

However, the [luxury](https://www.financedigest.com/mike-ashleys-frasers-buys-thgs-portfolio-of-luxury-goods-websites.html) [market](https://www.financedigest.com/5-reasons-not-to-ignore-content.html) has ultimately proved remarkably resilient. Just as the sector quickly bounced back following the 2009 recession, we are once again seeing personal [luxury shoppers](https://www.financedigest.com/london-fears-losing-luxury-shoppers-to-paris-and-milan.html "London fears losing luxury shoppers to Paris and Milan") return – whether than be shopping digitally or in the real world in physical stores.

But, depending on what region you’re operating in, shopper behaviour will vary based on local [market dynamics and specific country approaches](https://www.financedigest.com/the-berries-market-to-be-driven-by-the-non-stoical-approach.html "The Berries Market To Be Driven By The Non-Stoical Approach").  For example, China was one of the first countries in lockdown with a massive fall in marketing and [advertising spend in 2019 and early](https://www.financedigest.com/exclusive-microsofts-bing-plans-ai-ads-in-early-pitch-to-advertisers.html "Exclusive-Microsoft’s Bing plans AI ads in early pitch to advertisers") 2020\. However, the country has since returned to full, if not even stronger, economic force.

Our recent [report](https://analyticpartners.com/resources/recovering-from-covid-19-fresh-look-personal-luxury-industry/) gathered insights and trends on the personal [luxury](https://www.financedigest.com/mike-ashleys-frasers-buys-thgs-portfolio-of-luxury-goods-websites.html) goods industry, and has found among others that the continued rise of the second-hand [market](https://www.financedigest.com/5-reasons-not-to-ignore-content.html) and sustainability are crucial to its recovery, as well as investing in brand marketing. [Investing in brand](https://www.financedigest.com/5-compelling-reasons-that-you-should-invest-in-branding.html "5 Compelling Reasons That You Should Invest In Branding") not only allows companies to build their inspirational equity but also entice consumers to visit stores as they reopen and drive

long-term growth.

We’ve determined five key steps that will help [luxury brands](https://www.financedigest.com/top-luxury-car-brands-in-the-world.html "Top luxury car brands in the world") preserve their resilience and be best prepared for any unknown future based on our ROI Genome – this [marketing](https://www.financedigest.com/5-reasons-not-to-ignore-content.html) intelligence collects and analyses data from our global clients of the past 20 years. That way we can help companies better understand how factors such as brand health, country dynamics and competitive landscape impact ROI and performance.

1. [**Global opportunities**](https://www.financedigest.com/cone-crusher-markets-advanced-research-growth-opportunities-in-global-industry-by-2030-edited-by-leading-research-firm.html "Cone Crusher Market’s advanced Research & Growth Opportunities in Global Industry by 2030 Edited by Leading Research Firm")

Where once Europe and the Americas ruled, now Asia is the [top region for luxury with 35% of sales](https://www.financedigest.com/top-auction-houses-cancel-russian-art-sales-in-london.html "Top auction houses cancel Russian art sales in London") in 2020. It is expected to reach [25% of worldwide personal luxury](https://www.financedigest.com/dksh-sells-its-25-stake-in-swiss-luxury-watchmaker-bovet.html "DKSH sells its 25% stake in Swiss luxury watchmaker Bovet") goods’ sales by 2025.

Benefiting from its emerging middle-class looking for entry-level [luxury](https://www.financedigest.com/mike-ashleys-frasers-buys-thgs-portfolio-of-luxury-goods-websites.html) products and improved online distribution, the Chinese market will see [increased local purchasing](https://www.financedigest.com/how-to-increase-repeat-purchase-rates-in-ecommerce.html "How to increase repeat purchase rates in eCommerce") – as opposed to tourist-driven shopping.

Brands looking to expand or [invest further in China should use measurement frameworks to capture the branding media inside and outside of the large](https://www.financedigest.com/large-investment-success-for-basingstoke-cybersecurity-start-up.html "Large investment success for Basingstoke cybersecurity start-up") platforms like TMall – because many purchases are from social platforms that can’t be tracked with last click attribution reporting.

1. **Customer-centricity**

New generations of luxury shoppers will [change the shopping landscape](https://www.financedigest.com/how-will-ios-14-change-the-digital-landscape.html "How will iOS 14 change the Digital Landscape?"). By 2025, Generation Y (born between 1980 and 1995) and Generation Z (born after 1995) will be the biggest buyers of luxury, representing over two thirds of global purchases. As these shoppers want a more personalised experience [luxury brands](https://www.financedigest.com/loreal-buys-luxury-brand-aesop-with-eye-on-china.html "L’Oreal buys luxury brand Aesop with eye on China") must move from a product-centric model to a more customer-centric one.

We have witnessed the [rise of the influencer](https://www.financedigest.com/influence-of-the-rise-of-machinery-on-britains-workforce.html "INFLUENCE OF THE RISE OF MACHINERY ON BRITAIN’S WORKFORCE") but before engaging in influencer marketing, luxury players need to set clear objectives and KPIs to avoid damage to their creative control and brand perception. Given the relatively short duration of influence, companies should manage their influencer portfolio in the same way [asset managers](https://www.financedigest.com/asset-managers-on-alert-after-whatsapp-crackdown-on-banks.html "Asset managers on alert after ‘WhatsApp’ crackdown on banks") manage their financial portfolios.

The ROI Genome shows that influencers tend to be more efficient than Celebrity PR, but less efficient than traditional PR; although Asian markets are an exception here. And not all impressions are created equal – brands [must consider meaningful and relevant messages as well as reach](https://www.financedigest.com/engine-parts-makers-must-cross-valley-of-death-to-reach-ev-era.html "Engine parts makers must cross ‘valley of death’ to reach EV era").

1. **The omnichannel route**

In the short term, [restricted travel](https://www.financedigest.com/eu-to-restrict-travel-rules-for-russians-split-on-how-far-to-go.html "EU to restrict travel rules for Russians, split on how far to go") means companies have had to reinforce their local presence. Chanel and Dior are now selling [exclusive products](https://www.financedigest.com/exclusive-volvo-readies-ev-blitz-in-biggest-product-revamp-under-geely.html "Exclusive: Volvo readies EV blitz in biggest product revamp under Geely") through their stores allowing them to collect immediate feedback on new products and adapt quickly to shoppers’ needs. Collecting brand experience feedback and customer relationship [data are key to future](https://www.financedigest.com/investing-in-the-future-with-alternative-web-data.html "Investing in the future with alternative web data") growth.

Distribution is changing because of digitisation. The share of online sales channels for the [established luxury brands](https://www.financedigest.com/2016-the-fight-back-of-the-established-brand.html "2016 – THE FIGHT BACK OF THE ESTABLISHED BRAND") is expected to exceed 30% by 2025 – digital channels have joined TV and OOH as essential touchpoints at the start of the customer journey. Luxury shoppers [expect high standards of service](https://www.financedigest.com/what-to-expect-in-2022-financial-services-trends-according-to-salesforce.html "What to expect in 2022? Financial Services Trends, according to Salesforce") in stores and must now maintain that quality in their digital interactions.

1. **Finding a purpose**

[Luxury brands](https://www.financedigest.com/how-a-british-brand-catered-to-hnwis-can-maintain-its-position-within-the-global-luxury-sphere-and-even-grow-in-these-current-circumstances.html "How a British brand catered to HNWIs can maintain its position within the global luxury sphere, and even grow, in these current circumstances") need to invest in inspiration. Consumer journeys are becoming more complex, so brands [need to be active across](https://www.financedigest.com/tech-awakening-needed-across-uk-workforce.html "Tech awakening needed across UK workforce") more touchpoints, especially social such as Instagram and WeChat. [Luxury brands](https://www.financedigest.com/luxury-brands-e-commerce.html "LUXURY BRANDS & E-COMMERCE") also need to be more responsible – CSR will be an essential requirement.

To be culturally credible, [brands will have to meaningful contribute to affluent consumers’](https://www.financedigest.com/how-financial-brands-can-appeal-to-consumers-emotions-with-sms-rmm.html "How Financial Brands Can Appeal to Consumers’ Emotions with SMS/RMM") lifestyles – while also driving positive change.

However, even the most authentic message can fail to cut through without an effective deploy­ment strategy. As behavioural targeting [becomes more challenging for marketers in this world](https://www.financedigest.com/snowboarding-british-teenager-brookes-becomes-the-youngest-world-champion.html "Snowboarding-British teenager Brookes becomes the youngest world champion") of cookie depreca­tion, brands should look at new ways to serve ads and connect with their prospects and customers.

1. **Technological transformation**

Luxury brands have been slow to embrace digital but the shift to [online shopping](https://www.financedigest.com/the-high-street-is-dead-long-live-online-shopping.html "The high street is dead – long live online shopping! ") and emerging new digital-first luxury brands including Parachute, Shinola and Away, means they can’t delay any longer. Customised features such as virtual try-ons, private shows or personal shoppers can all [improve the online experience](https://www.financedigest.com/improving-customer-experience-through-broadening-your-mobile-offering.html "Improving customer experience through broadening your mobile offering").

Advanced analytics can generate competitive advantage and value and establishing an analytic framework such as [Commercial Mix Analytics](https://analyticpartners.com/solutions/commercial-mix-modeling/) helps optimise marketing investments.

Finally, luxury companies need to collect fitted, agile [data and develop analytic roadmaps with a test and learn approach to help identify](https://www.financedigest.com/new-gleif-challenge-facility-extends-ability-to-trigger-updates-of-legal-entity-identifier-data-to-all-interested-parties.html "New GLEIF Challenge Facility Extends Ability to Trigger Updates of Legal Entity Identifier Data to All Interested Parties") where future growth may lie.


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