In an elaborate update on the impact of COVID-19 on the global luxury industry, Bain & Company details how the luxury goods industry, has witnessed its sharpest drop in decades, estimated to reach recovery by 2022-2023.
Changing dynamics, such as little to no travel or tourism, changing spending patterns and beliefs and enduring restrictions are shaping the luxury industry of the future, which Bain believes is resilient enough to transform and redefine its purpose to remain relevant, especially towards new, young consumers.
A few key takeaways:
- For Q4, Bain expects the signs of recovery to continue, to a -10% y-o-y drop, worst case -20%, best case -5%
- Bain expects a return to 2019 levels not sooner than end 2022, early 2023 with partial recovery in 2021
- Mainland China is the only region to end year positively to €44bn, +45%
- Largest drops in HK & Macau -35%, EU -36%, Americas -27%, Japan -24%
- Online sales globally increased sharply from 12% (2019) to 23% (2020)
- Online expected to become leading channel for purchase by 2025, brick-and-mortar will stagnate/decrease
- Experience-based goods (fine art, luxury cars, fine wines, gourmet food) will recover faster than other categories
- Sustainability, environmental awareness, diversity and inclusion are top of mid on the social agenda of consumers