Like dominoes lined up perfectly in a row, the novel coronavirus pandemic knocked down businesses all across the world one after another.
Luxury brands, which are traditionally heavily dependent on their physical stores, were not left unscathed by the health crisis that plunged the global economy into its worst crisis since 2008.
The year 2020 was witness to the closure of a large number of high-end brick-and-mortar stores and the downward momentum of many top-of-the-line brands.
The impact of COVID-19 and the ensuing string of lockdowns and travel restrictions was immediately felt in European luxury shopping capitals from Paris to Milan, which usually dominate the global luxury conversation.
Industry leaders and bellwethers such as Gucci, Hermès, Burberry, LVMH, Richemont, and Versace all suffered, especially early in the outbreak.
The luxury sector in countries beyond Europe also took a big hit. The slump in sales and profits occurred despite the relative resilience of sales in China, one of the world’s most lucrative luxury goods markets.
Drop in sales
Put in numbers, sales of luxury goods worldwide were expected to fall by 23% to $258 billion in 2020, their largest ever drop and first since 2009.
The coronavirus certainly shook some of the foundational aspects of the industry, with e-commerce gaining unstoppable momentum and set to become the leading channel for luxury purchases by 2025.
Online shopping for luxury items nearly doubled its share of the market to 23% in 2020 from 12% in the previous year.
With the virus still growing strong in different parts of the world, those luxury houses that have long been reluctant to sell through digital channels have no other choice but to reinvent themselves and push their e-commerce initiatives into high gear.
Amid this large-scale transition, the world needs companies who can help luxury brands navigate the intricate labyrinth of today’s challenges while future-proofing their operations.
Stellar Digital is one of those firms who has seen the tech-driven revolution coming for a long time and is now showing the way for businesses willing to embrace change while preserving the identity of their brand.
With its finger on the pulse of the latest trends and technologies, this award-winning software development, digital experience, and e-commerce solutions powerhouse aspires to help luxury market players not only get back on their feet but plan for future growth.
Future prospects
It is true that the changes brought by COVID-19 are pressing on the luxury market and pose a threat to established brands that are adored around the world.
However, this surreal experience and the ongoing digital transformation of our world has also created unprecedented opportunities and have opened the market to new and different kinds of competitors that can add luster to the sector and take it to new heights.
So it is hoped that luxury brands, with the help of companies such as Stellar Digital, will figure out how to adapt to the realities of the pandemic era and eventually expand luxury to mean more than it used to.
