In 2020, lockdowns caused a number of disruptions that could have proved terminal for luxury fashion brands. To name a few:
- Physical retail shutting was a massive issue for a sector in which 78% of revenue went through offline channels.
- Fashion show cancellations meant marketing plans needed to be changed overnight, since these flagship events typically formed the cornerstone.
- Social issues – from COVID-19 redundancies to BLM – heightened scrutiny of brands’ values and added pressure to get messaging right.
For several brands already facing financial difficulties, these disruptions and others proved too much. We saw the likes of Brooks Brothers and Ralph & Russo enter administration. But many others survived. Some grew their market share considerably while developing more robust processes along the way. How?
Three Key Areas for Luxury Leaders
Gartner’s Luxury 2021 Digital IQ index tracks the performance of 73 luxury brands across the fashion, watch and jewelry sectors. In conducting this research, we found three key areas in which leading brands outperformed their peers.
- Firstly, leaders found navigated market uncertainty and shifts in consumer behavior by balancing their advertising strategies between brand awareness and driving sales. These brands resisted pressure to push product discounts, instead leveraging campaigns to showcase their sustainable credentials, their care for their staff and communities and the services that differentiate themselves.
- Secondly, successful luxury brands tested and scaled new technologies that could help them address the shortcomings of their digital customer experience relative to their in-store services. There were a number of areas to this – from expansion of ‘buy now, pay later’ offerings to virtual consultations. All of these were geared towards assuring prospective customers that the products they were looking at were ones they’d like to purchase.
- Thirdly, luxury brands experimented with new channels to find reach. After initially holding out, luxury brands turned to TikTok, setting up new accounts. Pioneers pushed further forward in previously untapped channels such as gaming, which has seen the likes of Burberry, Ralph Lauren and Louis Vuitton lead the pack.
Takeaways for Luxury Leaders
The combination of these three areas helped leaders to survive the aftermath of lockdowns, but crucially also gives them a strong foundation for future success, regardless of the exact nature of lockdown easing.
The team processes, agile ways of working, and structural changes that were necessitated by the pandemic will put businesses in an even better position to survive future black swan events. For marketers who don’t believe they’ve maximised the digital opportunity in 2020, I’d strongly urge you to read the Luxury 2021 Digital IQ, since the implications can make a difference to your business in 2021 and beyond.