The fashion and luxury industry are feeling the impact of the Covid-19 pandemic as the second wave continues to spread. As governments around the world implement additional health protection measures, consumer confidence is declining, resulting in a significant decrease in spending, particularly in the fashion and luxury sectors.

A recent survey conducted by Deloitte called the ‘Global consumer pulse tracker’ gathered data from consumers across 15 countries between August 22 and October 3. The findings revealed a substantial decrease in purchasing intentions. Furthermore, a separate survey focused on Milan’s luxury shopping district, Montenapoleone, showed a drastic drop in footfall.

The ‘Global consumer pulse tracker’ study reported a 15% decline in consumer intention to spend more on apparel and footwear worldwide in October. This decline is even more severe in certain countries, with a 27% decrease in France, 21% in Italy, and 18% in the USA. The forecast for November suggests a further downturn. However, Asia seems to be an exception to this trend, with a 26% increase in spending intention recorded in China, and a 13% increase in India.

Although there was a slight recovery in fashion spending during the summer months, consumers surveyed by Deloitte are now expressing a strong inclination to reduce their spending on discretionary items due to the gloomy economic and health outlook.

This decrease in spending is particularly evident in the luxury goods sector, as highlighted by a study conducted by Deloitte in collaboration with the MonteNapoleone District. The study focused on companies operating in Milan’s luxury shopping district, specifically via Montenapoleone. Since the beginning of 2020, the number of unique visitors to the district has plummeted by 57%, from over 8 million in 2019 to 3.4 million in 2020. Foreign visitors have experienced an even greater decline of 78%. Notably, there has been a complete absence of visitors from China, and a decrease in visitors from Russia. However, the length of stay for foreign visitors has increased by 23%.

The findings from these surveys paint a grim picture for the fashion and luxury sectors as they continue to face unparalleled challenges during the ongoing pandemic. As consumer confidence declines and purchasing intentions decrease, businesses in these industries must navigate through these uncertain times and adapt their strategies accordingly. The only region experiencing a positive trend in spending intention is Asia, making it intriguing to observe how the fashion and luxury markets will evolve in the months to come.

Useful links:
1. Business of Fashion: COVID-19’s Impact on the Luxury Industry
2. Deloitte: Global Consumer Pulse Tracker September 2020