While it is true that the novel coronavirus pandemic and subsequent restrictions have upended businesses around the world – with stores selling non-essential commodities like fashion being the worst affected and shuttered for months together – it is also true that crises such as the COVID-19 pandemic present opportunities to think and act out-of-the box.
Reports from across the world showcase numerous positive stories of brands that have done exceptionally well in reinventing themselves by introducing innovative categories for their customers and keeping them relevantly engaged during stressful times. Luxury brands have also led by example, resetting businesses wherever necessary This has led to reset of businesses across industries and luxury is no exception.
Measures taken to offer innovative products and services by many luxury brands have hugely appreciated. Luxury firms focused on digitalization, going green and going Phygital, but, overwhelmingly, global attention has been driven to a holistic approach to sustainability and how to make luxury more meaningful and purposeful.
A virtual India Fashion Forum panel discussion, powered by Istituto Marangoni, deliberated over reformation of the luxury industry post the ongoing COVID-19 pandemic.
Topics of discussion ranged from:
– The effects of the pandemic on the industry
– The learnings for the luxury industry and how are key players prepping to bounce back
– Insights into how the industry is re-engineering for the new world order
– New platforms being used to showcase collections in the absence of physical shows
– Foreseeable changes in the future
– The new models/ formats that are being embraced for a triumphant revival
Moderated by Bijou Kurien, Strategy Board Member at L Catterton Asia, the webinar featured the following eminent names from the luxury fashion industry:
– Ganesh Subramanian, Founder, Stylumia
– Abdullah Abo Mihim, Programme Leader, MA Fashion Business, Istituto Marangoni London
– Shirin Mann, Founder & Creative Head, Needledust
– Gitanjali Saxena, Business Head, Global Luxury, Tata Cliq Luxury
The novel coronavirus pandemic and subsequent restrictions have upended businesses around the world. Stores selling non-essential commodities like fashion were the worst affected and were shuttered for months together. This has led to reset of businesses across industries and luxury is no exception.
“We are all trying to fathom how to maneuver in this uncertainty and what the future holds for us all. This are very precarious times and even established brands across the world are seen struggling for survival. From Louis Vuitton making masks and Bvlgari venturing into making sanitizers to Bentley attempting to make ventilators, luxury companies are being forced to repurposed themselves and adapt to the new reality,” stated Bijou Kurien.
This gives others an opportunity to learn from these changes and understand from their perspective and reflect on the takeaways if there are any. “Are these changes just transient? Are some of these changes likely to be permanent? How has the consumer sentiment changed in the last few months of turmoil? These are the questions that we need to address,” he added.
Change in Category Preference
The COVID-19 pandemic and the subsequent lockdown have increased online shopping usage globally. Even in India, a huge surge in the number of first-time e-commerce users were registered. Talking about the response that TataCLiQ Luxury witnessed, Gitanjali Saxena said, “I wouldn’t say that we saw a surge as such, but the revival of businesses through the online medium has been definitely faster. Today we are almost close to pre-lockdown level of sales. But overall, there has been a shift in consumer preference of categories. Interestingly, we saw a renewed demand in the gifting category. People were sending luxury watches, fragrances to their parents, friends and loved ones. We also have seen good demand for categories that we use at home like gourmet food, high end cookware, cooking essentials, chocolates, etc.,” she said.
In the fashion category, loungewear and top wear were on top of consumers’ minds. Although there has been a shift in category preferences, Saxena revealed that TataCLiQ Luxury has witnessed strong brand loyalty during the present time.
Interestingly, loungewear has witnessed upsurge in sales across the global markets post the pandemic. “My analysis is that while we have sleepwear, casual wear, formal wear, swimwear, etc., there wasn’t a category that was designed keeping in mind the present scenario – where people spend days on end in homes. I think that’s what a lot of people discovered that there has been a shortfall in their wardrobe to suit their new routine,” said Kurien.
Market Shift: What Analytics Say
According to Ganesh Subramanian, preferences used to shift by the season, even before the pandemic and brands had to keep up with these changing preferences in a bid to stay relevant. But post the pandemic these changes were amplified. “We see shifts on multiple levels to be honest. One of the chief trends that has emerged post the pandemic is ‘ethics is greater aesthetics’. Search trends on sustainability has gone up by 5 times in the last two years. What this means is that it is not a trend that has started now – it has only increased post the pandemic. This is the time for amplification of the groundwork which is happening around sustainability – particularly in the luxury space,” he added.
Now consumers are hyper conscious and luxury brands are compelled to demonstrate their commitment to social and environmental causes.
Another trend that has emerged of late is the blurring of lines between categories in fashion. People are confined to their homes most of the times and their preferences of apparel has undergone massive change. “We are seeing a higher demand for top wear post the lockdown. In fact, top wear is growing 3 times faster than bottom wear. In the bottom wear category, shorts and anything comfortable like track pants are doing better than other categories. People are working from home and their preference will naturally lean towards comfortable apparel,” he added.
He also highlighted a new trend in attitude that has been witnessed post COVID – preferences have shifted from the widely prevalent ‘buy to throw fashion’ (fast fashion) to ‘buy to keep fashion’. “We have now seen a decrease in fashion elements in winning products across categories by 40 percent from same time last year. This means that people are now going for classics. In the context of luxury, we can say people are gravitating towards silent luxury than ‘bling’ luxury. For people now want to buy something and keep it for a longer time,” he said.
If he is to be believed, it is a boon for luxury businesses, luxury is something that we all want to treasure.
Learning from International Markets
Talking about learning from the overseas markets in China, Europe and the US, where markets have resumed again, Bijou Kurien asked if there are any discerning trends that were prominent in these markets that Indian brands could pick up.
Abdullah Abo Mihim pointed out that the economic factors have to be considered to understand the shifts that have taken place or are slated to emerge in the near future. “During the lockdown, people are sitting on large amounts of cash. There are people who are spending money by shopping online but a majority of them are either conserving cash or focusing more on clearing their debts. This is definitely going to create new variables and trends for the fashion industry. When these consumers go to the market after lockdown are lifted, there will be very large amounts of buying in the early stages,” he stated.
This was apparent in the Revenge Shopping trend that caught on in China after the lockdown was lifted.
“It became a big trend but we have to be cautious because even though it was well expected, we know that it is not going to last very long. Retailers can’t actually count on revenge shopping as a growth driver because this enthusiasm will wane as time passes. As of now, Asia and the UK are at this stage,” said Mihim.
In London too, the lockdown has just been eased and sales have exploded. In the luxury space, some brands have been enjoying exceptional sales while some are still struggling for consumer attention. “So, for London particularly, I believe we might take some time for things to pick up as relaxations have been just announced,” Mihim added.
For brands and retailers, it is imperative to carefully gauge what the consumer is going through and what s/he is expected to be doing in the next few months and years. There has been enough job losses and furloughs and a major chunk consumers are now more focused on saving cash. At the same time there is another consumer base for whom luxury is a part of their genetic makeup; this affluent consumer base has not been affected much by the pandemic and are still consuming luxury like they used to before the pandemic. According to Mihim the industry need identify who their customers are from these two groups.
Apart from low consumer sentiment, there are lot of confusion in the industry at the moment because we still aren’t sure how long this crisis is going to last. But, according to him, there is a silver lining. Financial markets have a deep connection with the luxury market and the fashion industry. The financial markets are booming at the moment and this expected to have positive impact on the future of luxury.
“There are short term trends at the moment, and we probably will be in the process of re-balancing for at least about a year or so. The industry, at the moment is weighing different things to see if it is going to be the new trend like virtual fashion shows and digital fashion weeks, etc. One of the big things that I personally think will happen is that the voice of sustainability is just going to get bigger. I think, the biggest reflection should be on reconfiguring the value chain and the business model because it is apparent that many of our business models are not strong enough to sustain a crisis like the one we are going through now. There also is a huge opportunity here for technology to create new trends in terms of new supply chain models for luxury brands,” stated Mihim.
Role of Stores in Luxury Fashion
Brick-and-mortar stores take the centerstage in luxury fashion. From giving consumers the chance to physically see and touch their products, building relationships to offering compelling shopping experiences, a store is the epicenter of a luxury brand’s story-living.
“In the wake of the pandemic and how things have become, what can we expect in the future? Will stores continue to play its eminent role or is Omnichannel experience is the way to go forward?” Bijou Kurien asked.
According to Shirin Mann, nothing can replicate the experience that brick-and-mortar stores offer, and consumers will wait for them to re-open. “Consumers today are still afraid of going out and being in a public place, but they yearn the experience that physical stores offer. It’s physical stores where consumers can actually experience the brand story. In fact, we have just launched a brand new store 5 days ago, right in the middle of the pandemic. Also, we have seen consumer sentiment differs from city to city – like we are witnessing more footfalls in our Chandigarh store than the stores in Delhi, for obvious regions. At the same time, we have noticed that, at least for us, the conversation rates have increased manifolds. I think, people not really wanting to come out and shop in physical stores is interim – once this is over, things will definitely come back to normal,” she said.
Mann further added that it also is imperative for brands to prepare a digital contingency plan for ‘this period’. “While we have had a very strong online presence, we have stepped it up even higher post the pandemic. We have now inculcated a live chat that even stays active for late hours to serve our overseas consumers. Our digital story telling has become even stronger, and we are interacting more with the consumer in a bid to understand them and offer them a better experience,” she stated.
She also went on to explain how sales have now picked up for Needledust and are at par with pre-COVID times. “Sales took up from the US, Europe, Asia, and now we are even enjoying good domestic sales. So, like I said, we believe that it’s just temporary; once the fear of the contagion subsides, consumers will be back to physical stores,” she said.
Needledust had 2 more store launches planned for India in 2020, but Mann added that the plan has been shelved keeping the current crisis in view.
The Pandemic Has Reset Consumer Values
Bijou Kurien highlighted how the pandemic has ‘reset values’ which in turn has changed the key motivational aspects for luxury fashion consumption. “Today, simple living and simple joys of life has become the new mantra of living. Luxury suddenly seems meaningless! How are luxury brands looking at this?” he asked.
Gitanjali Saxena explained that the values that luxury stands for will always hold patronage and that the wane in demand is just temporary. Values like craftsmanship, quality, personalisation, etc., have always been relevant and continue to be in the future. But it is imperative for brands to shift focus now and be extremely careful about their brand values what they communicate to consumers. “Consumers now have higher expectations, especially with regard to a brand’s social stand. E.g., we have seen how luxury brands across the world have poured in their support for the #blacklivesmatter campaign. Social and environmental responsibility is one of the most important aspects for a brand now – it’s all about your contribution as a luxury brand to society,” she added.
The Need to be Digitally Native
Retail experts around the world have ubiquitously called the COVID-19 pandemic has as unexpected catalyst for technology adoption. While most of these technologies were already there, the crisis has amplified the adoption rate. “Back in 2012, when I joined Myntra, people were skeptical about the success of fashion through online channels. But see what we have today! Most innovations look too futuristic but today we have to consider that adoption rate is too high, and technologies become mainstream very soon. Today, we have think digital by default and not just by design,” stated Subramanian.
The consumer today is digitally much ahead of most brands. So, the need of the hour for brands and retailers is to become digitally native. This implies that businesses need to relook at the skill sets they have and re-model their modus operandi and strategies accordingly. “It just cannot be an extension of our current way of working – we have to build a digitally native organization – because the business is now driven by consumers and not by what we wish to do,” he added.
The future of luxury, as per Subramanian, is providing exclusivity by catering to individual consumer requirements – one unique design sold with an experience which is personalized.
“Gone are the days when fashion forecasted future trends and end up with heaps of waste. Now brands need to transform, leverage on data for consumer preferences and make products accordingly. This will help them in mass customization and ensure that the waste is zero; we all know how sustainability is going to take a center stage in fashion going forward, and the luxury fashion industry can definitely take this route to deal with a perennial problem like textile waste.,” he said.
He also highlighted the importance of luxury brands letting consumers to experiment with their products. “Google search trends on DIY videos have gone up by 3X during the lockdown period. This accentuates the fact that consumers now want to know how they can do things themselves. How does this translate to luxury fashion? Let them play with your products! It can be an old product sitting with you for months which becomes a completely new product after a DIY experimentation,” he explained.
Post pandemic, as per him, technology will transform the fashion industry at an unfathomable speed. Towards this, Stylumia is participating the Helsinki Fashion Week a digital event encompassing 3-D fashion shows, interactive livestreams and cyber networking.
“The Helsinki Fashion Week features 100 percent 3D avatars – draped with 3D imagery of fashion – created by real designers. Stylumia will, for the first time create an AI driven design, without any human input. The point is, there are a lot of virtual experiences in store for consumers post the pandemic; can we bring them to our consumers to give them a virtual experience of going to a physical store and buying a product?
Summing it up, Subramanian advised brands and retailers to get behind the science of being digitally visible and relevant, as well as know how to use proper product description. “When I say digitally relevant, I mean that products should be appealing enough in the screen to attract clicks. Another important factor is product description; product description is no longer just text to describe your product. You have to get behind the science of writing proper meta description that drives clicks,” he added.
Post COVID Strategies
Echoing similar sentiments, Mann said that the digital fashion market is dynamic and to get consumer attention the it is indispensable for businesses to focus on the creative angle of marketing – right from proper product photography to engaging product description that conveys the story behind the product. It also crucial to have a super strong social media presence along with a website that can ensure that the entire buying process is easy and quick.
In an uncertain stage as now, brands and designers need to frequently experiment with newer strategies in line with changing times. Yet, Mann pointed out that designers need to align themselves to conscious designing and production which will help them to not only cut waste but also add exclusivity to their creation.
While the outcome of the ongoing pandemic is fundamentally uncertain, the world has been through similar crisis before. “And what we have learnt from them is that every crisis gives rise to ‘new normals’ and opportunities. This actually is the time to learn new skills that can potentially be demand in the times to come. This might not necessarily be fashion skills, but skills that will prove to be relevant to the fashion industry in the near future like, risk management, analytics, technologies like blockchain, AI, automated commerce, etc. There will be disruptions for the next few months but, personally, I think the luxury fashion industry will not be affected for a very long time. I have strong reasons to believe that from January 2021, we will see massive rebound and things getting back to normal,” stated Mihim.
In a nutshell, the ongoing slump in the luxury fashion industry is temporary. Although it is hard to predict when the epidemic will end, the recovery in the markets after it is likely to be swift and sharp. But the pandemic has forever changed the way businesses across industries function and the fashion industry is no exception.
Going ahead, the luxury fashion industry of the future will require multiple skill sets and all stake holders will have to adopt to these requirements and do business in the way changing times demand. Sustainability, care for the environment, social responsibility, etc., are some of the consumer values that are going to gain prominence in new normal. While the relevance of physical stores might have gone down in course of the last couple of months they will continue to be a crucial part of every luxury business even in the future. At the same time, the power of digital technology is apparent after the pandemic hit us and the industry will have to use it to strengthen itself to cope with the times that lay ahead of it.