Luxury in 2022: old markets shine, resales shimmer, digital accelerates

Luxury emerged as an unlikely winner in a pandemic that shut down the closely related travel sector, but 2022 could be different.

Why it matters

As it turned out, when luxury services – restaurants, hotels, flights – shut down, luxury goods remain accessible. Moving into the third pandemic year, it appears that with restrictions still in place in many parts of the world, this trend could well continue.

What’s happening?

• A shift: who’s spending on luxury and where they’re spending. The direction of travel in luxury spending pre-pandemic had been toward Asia, with Chinese luxury spenders equalling if not surpassing their American counterparts. However, in 2021, it was Americans and Europeans driving that recovery. In the US, there has also been a shift in spending from the coasts to the interior.
• New avenues are emerging. The second-hand market, which has long threatened to become a major player in the space, is now piquing brands that have spotted an opportunity for both sustainability credentials and even further revenues.
• This plays into a deeper trend toward experience and vertical control. Increasingly brands are building out their online shopping capabilities when facing the customer and buying suppliers in service of greater transparency. For brands, this means more control.

Quote

“The irony of the past 18 months is that the uncertainty generated by COVID-19-related restrictions has forced management teams to be more nimble, less risk-averse, more daring and has helped them make tough decisions they may have postponed prior to the crisis on staff, rents, digital transformation and more” – Erwan Rambourg, global head of consumer and retail research, HSBC New York, speaking to WWD.

Sourced from the FT, WWD