When Crisis Creates Opportunity: The Luxury Brands Embracing The New World Order

3 min read

Sophie Simpson, CEO and founder of Dubai-based PR agency Atteline, investigates if luxury firms can seize the opportunities that today’s rupture points present


Since the very early stages of the pandemic the luxury sector has been highly attuned to the spread of the coronavirus and what could be its devastating impact on the industry. The luxury landscape felt the initial rumblings of the storm to come when Covid-19 hit China, a country whose population made up 90% of the global market growth for the luxury sector in 2019. When the virus hit Italy, where many brands have key suppliers and are headquartered, they faced the further challenge of operating as and where possible amid a national lockdown.

Crises, however, create as much comradery as they do uncertainty. A whole host of existing luxury brands have entered many people’s lives for the first time, in unprecedented ways. Brands are understanding the challenges and embracing the new world order by mobilising internal factories and resources to aid in the fight against Covid-19 and support those in need. To name but a few, Chanel’s factories are making face masks, LVMH is producing hand sanitizer and Bulgari is funding coronavirus research. The luxury retail world is rallying together and aiding the fight against the global pandemic.

luxury Covid-19

Loewe producing non-surgical masks in its Getafe factory

The crisis has also challenged the luxury industry to embrace these new-fangled connections in other ways. Brands must now challenge themselves to focus on the human aspect of the digital revolution and seek traction with a more diverse (and not just younger) digitally-powered consumer. 

Again, we can see existing brands entering people’s lives for the first time – Zoom, once known for business calls, has become a staple way of connecting children with their grandparents. Meanwhile, groups of friends and families get together on Houseparty, caught between the novelty factor and the realisation there’s little alternative. As recommendations about tech spread from teens to older generations, Covid-19 may do more to change attitudes to technology than anything before it. With this has come business opportunities.

luxury Covid-19

From Instagram initiatives to e-commerce, Covid-19 is forcing the luxury world to go digital

After being slow adopters of the digital revolution, the luxury market has made notable investments to play catch up in the past years – and just in time. With most brands now comfortable selling their luxe online, with the notable exception of Chanel, many of the luxury players have been going deeper into the digital market and Covid-19 will accelerate this.

E-commerce looks to be the clear champion resulting from the Covid-19 crisis. New isolation and sanitary protocols will mean that luxury retail outlets will have to implement similar hygiene practices to grocery stores. For example, entry by appointment might become the norm, and this will undoubtedly lower the experience in physical retail. IMD conducted an instant poll, which reported that 72 per cent of those that participated agreed that luxury brands that are not currently selling online should reevaluate this strategy.

luxury Covid-19

London Fashion Week will take on a new virtual format in June | Burberry AW20

The trend of experiential luxury was already on an upward trajectory. With Covid-19, what is apparent is that the online shopping experience will improve in leaps and bounds. Virtual Reality (VR) and Augmented Reality (AR), combined with the likes of holographic experiences, will transform the digital shopping journey by placing consumers in quasi physical-store conditions. Furthermore, as travel will continue to be severely impacted, luxury will have to embark on digital-first, mobile experiences that are high quality and meaningful. 

Crises create as much opportunity as they do uncertainty and the luxury brands, or indeed all brands, that will thrive post-Covid- 19 will be those that are ready to take advantage of the new world order, understanding the challenges and embracing the possibilities it has created.

This piece was written by Sophie Simpson, an industry expert, and the CEO and founder of Atteline.

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