By publishing one disastrous quarterly results one after another, luxury brands show the extent of the ongoing economic crisis. Hermès, the sector leader, has just this week recorded a 42% drop in sales in the current quarter of 2020. Burberry shares are down 40% over the past year. LVMH, the industry leader, said its profit fell more than the sector’s forecasts in the early part of the year. Richemont, the Swiss giant and owner of Cartier, IWC and Piaget, is also suffering. Johan Rupert, its owner, announced in May that it would take at least 3 years to return to pre-coronavirus results. The decline continues despite the relative resilience of sales in China.
The overall economic backdrop is smart and even gloomy for the rest of the year, according to the International Monetary Fund. The United States just announced its worst quarterly drop in GDP, 32. 9%, in the current quarter. Meanwhile, eurozone GDP plunged through a record 12. 1% in the current quarter. While the virus is making a strong reappearance in several European countries and continues to spread in the United States, South Asia and South America, while activity in Southeast Asia remains subdued, luxury brands still have no choice to reinvent themselves with agility. to survive.
Let’s not forget, we have been talking about luxury for quite some time. So what precisely does a decisive transformation mean for all brands in the luxury sectors, in the automotive, hospitality, fashion, watches, jewellery and cosmetics sectors?
Independent brands, with their lack of restrictions on the head component and their tendency opposite to the current, as discussed in a previous article, are well placed to lead the way.
Here are seven new tactics that independent luxury brands say will withstand the adjustments brought on by the COVID crisis and bounce back stronger. These new practices would possibly benefit the industry as a whole.
There are multiple dimensions of emotion that can have effects on the luxury goods consumer. The coronavirus and our general reliance on virtual communication have undoubtedly helped luxury brands locate their position in the world of virtual marketing. It was a difficult task to do before the coronavirus: virtual was for the masses and luxury was for a few.
Kurt Kupper, a member of the board of directors of Louis Moinet Watches, the specialist in terrestrial and extraterrestrial equipment, explains that his company “has accelerated the virtual wave with business partners to share news, updates, images, videos [. . . ] to create more emotional connections. “Through some new virtual anchors.
He gave an example of updating the production of a customer’s masterpiece in a live chat with the workshop, adding, “I read that Porsche will offer this now with cameras in their factories. “
On the one hand, the coronavirus ruined the game because fashion exhibitions had to be achieved. But beyond that, even when they return, which they actually will one way or another, the industry has begun to question their value. What’s intriguing is that it’s not simply about catching on.
Kurt Kupper of Louis Moinet said: “Our marketing mix will evolve sustainably: in fact, we will question the return on investment in shows, events and product launches of the primary industry and experiment more, implement flexible and virtual marketing initiatives. “
This, like so many others, goes hand in hand with virtual taking center stage, as he suggested: “Our sales and marketing will be more like many other niche manufacturers: more virtual, more nimble with our retail partners, and more direct. . “
For Knirke Fester Schindler, brand director of La Vallée, an independent Swiss luxury cosmetics logo, interviewed for this article, the logo would have in mind a mix of short- and long-term strategies. He explained how La Vallée’s strategy would prioritize society. impact, diversification of the chain of origin and a focus on expanding what is the center of the logo: an agile and independent logo.
She said the component of the strategy review would be to “respond to the new trends and behaviors that our active, ambitious and executive target will follow in the post-COVID-19 market. “
Buben
Florian vom Bruch, CEO of Buben watch safes and winders
You don’t want to think too hard about attaching this concept of responsiveness to visitor centricity, which was perhaps the most discussed domain, with independent brands surveyed for this article.
According to Mario Peserico, CEO of Eberhard
Eberhard
“Our ability to react quickly, even in times of severe external crisis, has been highly valued in recent weeks and has made us realize the importance of streamlining our procedures so that the client feels at the center,” he said.
For Jean-René Bouton, chief executive of Paris-based fashion designer Koché, also known as the high-end streetwear brand, the luxury market and its consumers would now seek more relevance in terms of products: “A collection will have to be more applicable than ever for its consumers: quality, design, sustainability and social messages. The acquisition will be more thoughtful. Brands “that have something to say” will be more desirable than others, he added.
David Candaux, of the watch brand of the same name, said his vision was not to muddy the waters in those times: “The purpose is to continue on the same path we have taken, even if unforeseen demanding situations arise. [. . . ] Value is more vital than ever and that’s what we offer, genuine value, genuine know-how.
If you recognize that this attitude is not new, it marks a sure renewed conviction in a concept that is a bit for sale; One of the most demanding situations for luxury logos in recent years has been to make optimal use of social media without compromising logo values.
Perhaps this is no longer even a fear for luxury brands, newly convinced that values trump safe presence on mainstream social networks.
According to Patrick Delarive, founder and owner of the Whitepod Ecoluxury Hotel in the Hautes-Alpes, “we will have done more in 2020 than in 2019!”thanks to the brand’s ability to attract local consumers, Swiss in this case, and only international. .
By catering to the local clientele, Whitepod Luxury Hotel in the Upper Alps is on the right track. . . [ ] to record your year.
By reconnecting with local consumers, i. e. Americans in the U. S. In the US, Europeans in Europe, Delarive believes it is imperative to keep up with post-crisis trends: lately other people are showing a significant preference for fun and quality. Luxury brands.
“We are better known than ever right now, dealing with the crisis. We look forward to wider margins and infinitely what we can offer in terms of expertise and quality. “
The logo is hopefully going international and plans to open a new hotel consistent with the year until 2025.
Delarive sees long-term luxury as brilliant, especially for independent brands, because they are better placed to deliver hyper-personalized reports than giant multinationals suffering from stifling governance. For multinationals, he says, the only way will be to “increasingly separate their brands” to triumph over this rigidity and become more relevant locally.
Luxury brands intend to be the right people in terms of valuing their staff. Markus Kramer wrote an entire column on how luxury brands can inform a lot about corporate culture in 2014. contrary.
In general, corporations do well to align their corporate culture with the values of their logo. However, institutionalizing those values and defining how they relate to your organization’s unique behaviors and expectations (which the manuals recommend you do) is no small feat.
The Maison Valmont cosmetics space temporarily learned team cohesion, as CEO and co-owner Sophie Guillon said. The coronavirus gave him the opportunity to witness the dynamics of the collaborative team at play and the need to lock them up forever.
Maison Valmont needs to bottle the collaborative and passionate team dynamics that logoArray has. [ ] experimented during confinement.
“We have a percentage [now] of a link, which we highly praise,” he said, referring to how the company has handled itself in combination with COVID-19. “I think we will pay more attention to the needs of others. Our teams have been flexible enough to suspend their day-to-day responsibilities and stick together in the face of any new opportunities, disorders or limitations, which I believe everyone has enjoyed and will continue to do. [. . . ] Team spirit was and will be our motto,” he said. Me.
It turns out there are a lot of headlines right now focusing on the recovery of sales in the “hard-hit luxury sector. “Overall grocery buying patterns have improved there first.
But what if the industry is busy dictating a new breakthrough?So far, it would seem that
Small independent brands in particular rely on key elements of agility – visitor focus, immediate adaptation, team collaboration around a transparent and non-unusual goal, long-term experimental strategies combined with short-term and simplification of bureaucracy – to redefine luxury.
It is not yet clear what the reaction of mainstream brands will be to the new direction of independent brands. But given the trends explored here, it would only be smart if they did the same, given that the technique is healthy and the sector is desperate. Seeking, in the face of the coronavirus, an excuse to reappear reformed.
Thank you Alice Tozer for your help with the research.