The Covid-19 pandemic has significantly transformed the way luxury goods are consumed, according to the World Luxury Tracking report by Ipsos. The report highlights that luxury consumption is now closely tied to personal well-being and is increasingly viewed as a localized, digital, and sensory experience. The survey takes into account the current situation and the challenges brought about by the health crisis, shedding light on the reshaping of luxury driven by accelerated digitalization and a heightened need for indulgence and well-being. Additionally, the report reveals that consumer expectations have been influenced by the halt in purchases while traveling, which was previously a vital aspect of the luxury market.

The World Luxury Tracking report has been surveying the expectations, influences, brand relationships, and purchasing patterns of affluent consumers since 2007. The 2020 edition focuses on 8,200 affluent consumers from the United States, China, and several European countries including France, Italy, Germany, Spain, and the UK.

As a result of the lockdown measures, affluent consumers have significantly increased their online browsing time. The survey shows that nearly 70% of Chinese respondents, 51% of Americans, and 35% of Europeans have made luxury goods purchases online. Furthermore, they plan to continue shopping for luxury items online, particularly on multibrand platforms and through labels’ e-commerce websites. Personal data protection is a crucial expectation for 86% of consumers.

During periods of lockdown, luxury goods have once again become an essential pleasure associated with personal well-being. Product categories that provide sensory experiences, such as skincare, perfumes, wines, champagnes, and spirits, have experienced high demand. Fashion and accessories are also sought after, whereas jewelry and watches have seen lower purchasing intentions in western countries.

The consumption of luxury goods is now viewed as a privilege, with consumers increasingly aware that they belong to an exclusive group. While this has been a longstanding phenomenon in China, it is a more recent trend in Europe and the United States.

The report also identifies a polarized attitude towards luxury consumption across different regions. Chinese consumers exhibit optimism and materialism, Americans display resilience and a new hedonistic approach, while Europeans tend to be cautious and seek shelter from anxiety.

Affluent consumers prioritize authentic, high-quality products that offer added value. Chinese consumers believe luxury items should boost self-confidence, Americans focus on delivering exceptional emotional experiences, and Europeans view luxury purchases as safe long-term investments. Despite the impact of the crisis on their earnings, Chinese consumers continue to view luxury as an essential part of their daily lives. They are increasingly utilizing digital platforms to engage with luxury brands, demanding fluid, intuitive, and enjoyable digital experiences.

Similarly, affluent American consumers have shown resilience and an increased attraction to luxury. They perceive luxury as a dreamspace, providing an escape from the anxiety-inducing context of the pandemic. Their interest lies in product categories related to well-being, such as beauty products, skincare, and wine, rather than traditional luxury items like watches and jewelry.

On the other hand, affluent European consumers have experienced a lesser impact on their earnings but a decrease in confidence in their respective economies. They are less inclined to make changes in their purchasing behavior but are open to new luxury experiences, particularly those related to personal care and well-being. Moreover, there is a growing demand for cruelty-free and ethically sourced luxury products in Europe.

In conclusion, the Covid-19 pandemic has redefined luxury goods consumption by placing emphasis on personal well-being, digital experiences, and sensory pleasure. Affluent consumers prioritize authentic, high-quality products and seek to indulge in luxury as a means of self-fulfillment. While there are regional variations in consumer attitudes and behaviors, the demand for luxury remains strong across different markets. The industry must adapt to these changing consumption patterns and expectations to thrive in the post-pandemic era.

Useful links:
1. Business of Fashion
2. Vogue