When luxury brands falter and miss estimates, it’s not a good look for the luxury sector. Yet, it’s been proven that luxury business are able to rebound from uncertain times.
Luxury thrives when consumers feel happy and wealthy, not when people fear for their health and that of friends and family. We believe that these businesses are likely taking a hard hit now and will recover fully in a few years.
The biggest loser of the crisis period has been Bernard Arnault, head of French luxury conglomerate LVMH LVMUY, +2.45%, whose wealth sank $30 billion — some $20 million per hour — according to Hurun. This is a dramatic reversal of fortunes for Arnault, whose booming 2019 made him second only to Jeff Bezos on the world’s-richest-people list.
Luxury Brands Should Engage Their Most Loyal Customers. Sales of small and large ticket items are suffering amid the uncertainty and the closure of physical outlets. In this environment, it is those who already know and connect with your services or products that are more likely to make a purchase.
What you can do:
- Invest in identifying who your loyal customers are, and ensure you actively connect with them in a personalized way. It’s crucial to view this time as an opportunity to assess your brand and understand what to do in the short term versus what to do once this is over. Work hard to strengthen your relationships with top clients and take the time to understand more about them beyond their luxury purchasing habits.
- Wealthy individuals will look to the future for inspiration – they may be planning a vacation, seeking to invest in real estate, or upgrading their major assets like yachts or private planes. If your organization is providing incentives for customers to make purchases during these trying times, understanding a wealthy individual’s known assets, interests and passions can provide a road map for viable sales.