This slideshare is about the current environment in the luxury and fashion industries due to Covid-19 including accelerating trends, interesting initiatives launched by companies across industries, challenges and opportunities faced, and resulting calls-for-action.

1. Leveraging
the “new era”

2. Luxury industry amidst Covid-19
How labels began navigating the crisis back in March 2020
From the earliest stages of the pandemic, the luxury industry has been highly
attuned to the spread of the coronavirus and its massive implications, especially
steep declines in revenue. Luxury brand owners felt the first rumblings of the
storm when Covid-19 spread through China, the country whose citizens
accounted for 90% of the global luxury market growth in 2019. Labels had to
rethink and re-evaluate their overall strategy, battle rapidly changing consumer
sentiments, and manage challenging work ecosystems
More than 65% of
consumers in Europe
and the US expect to
decrease their spending
on apparel2
25%-30% is the
estimated decline in sales
for the year 20201
1 Bain & Company: Luxury after Covid-19: Changed for (the) Good? (Mar 2020)
2 BoF & McKinsey & Co: The State of Fashion 2020 Coronavirus Update (Apr 2020)

3. All luxury goods categories have
been heavily impacted by the crisis
Each facing potential double-digit declines by the end of 2020
BCG: Post-Covid-19 scenarios for different product categories (Apr 2020)
Perfume &
Cosmetics
Leather Goods Shoes
20 – 30% 30 – 40% 30 – 40%
Apparel Jewelry Watches
35 – 45% 35 – 45% 40 – 50%

4. “Caring Economy”
People prefer to buy from
companies who demonstrate
care and concern for
employees
Consumer sentiments have
evolved as a result of Covid-19
Leading to the emergence of new behavior themes
Shift to value and
essentials
People are more mindful
about their spending
purchasing more essential
products
Flight to digital and
omnichannel
During the pandemic, the
population shifted to online
shopping, a habit that will stick
Heightened
environmental and social
consciousness
Post-crisis, people will opt for
eco-friendly brands
Need to appeal local pride
Especially within the European
region, people will tend to buy
more locally manufactured
goods
1 Bain & Company: How Covid-19 Is Reshaping the Luxury Market (Apr 2020)
2 McKinsey & Co: Consumer: Consumer Sentiment is Evolving as Countries
Around the World Begin to Reopen (June 2020)
Demand for more
accessible price points
People will look for products
within the affordable luxury
segment

5. Trends accelerating

6. #1 Digitalization is on the
go
The society will live and
operate more in the digital
space
#4 Purpose moves to the
forefront
Concern for society at large is
a main priority for both
companies and customers
#2 Stressed importance of
the commitment to
sustainability
Sustainability will be a defining
value for brands and
consumers; there will be a
new luxury segment, the “eco-
luxury”
#5 Business models
evolve
Companies need to have
omnichannel flexibility to
survive and thrive
#3 “Localization”
Local shopping will increase,
and people will look more at
the origins of the products that
they buy
#6 Re-enchanted in-store
client experience
Hyper-personalized touches
and localized experiences
The crisis has accelerated trends
All impacting and shaping the “new normal”

7. #1 Digitalization is on the go
As consumers act more in this space, brands must increase online
capabilities to keep up
During this time of uncertainty, one thing is for sure: a digital explosion is guaranteed. Social distancing and
lockdowns have pushed digitalization to be an urgent priority across the entire value chain. Brands must scale up and
strengthen their digital capabilities to keep up with consumers’ new digital lifestyle
Valentino collaborated with an online video game, “Animal Crossing: New Horizons,” to launch and feature its latest collections
The global luxury personal goods
e-commerce market will move from
$37bn to $59bn by 20231
From $3.5tn, the global e-
commerce market will reach
$6.5tb by 20231
1, Forrester Analytics: Luxury Retail Forecast, 2018 to 2023 (Feb 2019)

8. Phillip Lim partnered with secondhand e-commerce store, The RealReal, to embrace
resale for an archive sale of seasons’ past collections
#2 Stressed importance of the
commitment to sustainability
A game accelerator as the new “eco-luxury” segment will rise
More than ever, consumers are becoming eco-conscious and are seeking
brands that promote sustainable practices. Luxury brands and related groups
will lead the way towards a greener future as various initiatives can be seen in a
vast number of announcements of luxury brands
The new “eco-luxury” segment is emerging with
various theme including longevity of a product’s lifetime,
eco-friendly, clean industrial processes and supply chain
traceability and anti-plastic and recycling sentiments

9. #3 “Localization”
Consumers and brands are acting more in their local
environments
The crisis quickly placed restrictions preventing cross-border travel and
consumers were forced to travel and buy locally, causing travel retail and
tourist-dependent stores to take a massive hit that will likely continue to suffer
into 2021
Consumers are moving from being “global travelers” to “local shoppers”:
Extending support to local
small businesses
Seeking products grown and
produced locally
Mega luxury brands who have produced locally and emphasized craftmanship since their
inception are at an advantage such as Hermès, Louis Vuitton and Dior

10. #4 Purpose moves to the forefront
Putting people ahead of profits
From the outset, most governments and businesses have been clear that they
plan to put people ahead of profits and as companies retooled their business
models to support first-responders, consumers were judging brands by their
more meaningful to their consumers by offering value beyond the products and
build authentic and personal connections based on shared values
Through employee referrals, LinkedIn provided free access to its premium features to
help employees at small businesses
65% of consumers
choose to buy from a
companies they believe
are doing socially good1
1 McKinsey & Company: Connecting with customers in times of crisis (Apr 2020)

11. #5 Business models evolve
Alternative strategies have emerged and will transform
organizations in the “new normal”
Companies need to have omnichannel flexibility to survive and thrive because
those with no existing online or delivery channel will struggle to survive during
and after this challenging time. Companies must anticipate change while
leading the growth through enterprise transformation, leveraging the role of
new valuable assets such as data and building new operating models and
collaborations
The most popular omnichannel services that consumers say they will continue
using are:
In-app shopping Home delivery
Ananda Hotel is offering a new range of online classes centered around wellness to help
customers reach their wellness goals in the comfort of their own home
Shopping via social media

12. #6 Re-enchanted in-store client
experience
Retail stores will be driven by experiences and services
Covid-19 has encouraged retailers to think about how they can better
personalize the in-store experience as shoppers are likely to spend even
less time in stores. The crisis has called retailers to offer unique experiences
that go beyond the transaction as buyers are expected to spend less time in
stores with shopping efficiency as a main priority
Private shopping
appointments
Genuine interactions with
clients
“No Touch” retail:
contactless payment
solutions
Interactive and immersive
digital experiences
New purification and
cleanliness standards
Convenient services: click-
and-collect, curbside
delivery, etc.
What is happening in “new retail”:

13. The 4Ps of marketing have been
reshaped by Covid
Taking into consideration the quickly accelerating trends
PRODUCT
• Smaller and functional assortment
• Products with a purpose
• Made with sustainable, eco-friendly materials
• Made-to-last
PLACE
Home deliveries, mobile shopping units, pop-up shops,
accelerated mobile ecommerce,shoppable online
media
PRICE
• Less frequent discounting with an eventual stop to
mid-season sales
• Lower entry price products
PROMOTION
• Messaging focused on health and saving the planet
• Online fashion shows
• Increased use of augmented and virtual reality
• Live streaming to sell clothing
4Ps

14. Challenges &
opportunities

15. The crisis is testing companies as
they face unexpected
circumstances
Leading to the rise of numerous challengesReimaging retail stores
Covid-19 created an over-night retail shutdown which made companies
implement new in-store standards
Rapid digital escalation at all levels
Companies had to undergo a digital transformation overnight as the
crisis shifted all business operations across the value chain in the digital
space
A new, local clientele with rapidly evolving sentiments
As consumers are spending more in local regions and powerful
shoppers are travelling less, labels have to maintain VICs while also
targeting new, local clients and balancing rapidly evolving shopping
habits and needs

16. However, with all challenges come
opportunities
Covid-19 has presented multiple opportunities for companies to
act upon
Use digital services to bridge the online and offline world
AR can compensate for experiences that you may normally only get in-
store. For example, Too Faced offered virtual makeup tutorials and
Louis Vuitton used its logo to trigger “virtual installation” that includes an
image of its iconic suitcases
Expand service and product offering
As consumers’ sentiments evolve, brands need to find ways to adapt
different levels in demand and changing consumer sentiments.
Adopting services such as home delivery and curb side pick-up or
entering the second-hand market is a way to capture increasingly eco-
conscious and local shoppers
Enhance branding and marketing strategy
More than ever, brands can put traditional marketing aside to act with
attentiveness towards their customers’ needs. Now is the perfect time
for brands to re-examine and refresh their strategies so that it aligns
with their DNA
1 Jing Daily: Fashion under Covid-19: The measures brands can take (Mar 2020)

17. Calls-for-Action

18. Re-examine and
refresh your strategy
Position your brand to aim
for “future proof-ness”.
Diversify your brand’s
revenue streams and build
a stronger brand ecosystem
Communicate with
authenticity and care
Understand and anticipate
shifts in consumer behavior.
Listen to what consumers
are saying in online and
offline conversations
Calls-for-action
Four areas to ensure brands are well positioned during and
after Covid-19
Understand the new
environment
In this “new era,” there will
be numerous trends which
will accelerate and bring in
new growth opportunities
Fasten up digital along
the entire value chain
Make investments now in
integrating digital practices
and explore partnering with
e-commerce sites for long-
term benefits

19. Brands have already acted upon
these calls-for-action
Proving their agility and reactivity to uncertain circumstances
Lululemon capitalized on the stay-at-home workout
trend that formulated during the pandemic by
acquiring the “Mirror,” a company offering at-home
workout classes in May 2020
Announced in early October 2020, Gucci is entering
the resale market by launching an online shop with
consignment site, The RealReal
At the beginning of the pandemic, Carolina Herrera
hosted a series special bridal zoom meetings
composed of a panel of wedding specialists offering
expert advice and guidance to the help panicked
brides
Sustainable fashion brand, Icicle, has reached out
to customers via WhatsApp, text message, and
WeChat to check on customers’ health and safety
throughout the crisis

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