Daniel Langer, consultant for some of the world's leading luxury brands, in an article in Jing Daily says that despite our intuition - people spend and will spend less on luxury in and after a crisis - the luxury segment is more resilient than others. Studying the effect of crises and recessions on luxury spending, Langer says his findings, that brands that can realize what he calls extreme value or "Added Luxury Value" become more important for consumers, are supported by recent reports, such as the record one-day sales at the Guangzhou Hermès flagship store, the 50% rise of LVMH sales in mainland China, and the 40% increase in luxury cruise bookings compared to 2019.
In every crises, Langer continues, luxury brands have rebounded faster and outperformed non-luxury segments, and he predicts the same mechanisms will apply for the remainder of 2020 and 2021 as markets all over the world start opening up again.
The author wars there is a big gap between brands that will come out stronger and those that will be damaged severely. Brands that have (further) lost connection with their customers and with the inherent Added Luxury Value of their brand during the Covid-19 pandemic, will not survive. Those that have continued to make relevant connections with their customers, through online advertising and presence, and that have invested in their people to come up with ideas, solutions and new sales approaches combined with swift and decisive action, will have a strong rebound, those that didn't or don't will be forgotten.