The Covid-19 pandemic has received a lot of attention and much has been said about it. In fact, it might seem that we won’t learn anything new from this period. However, this is not true, as pandemics affected consumer behavior, trends, companies, sales and many other aspects. It has even affected luxury sales. But, fortunately, we have many reports available to talk about it.
Today’s article presents insights from McKinsey & Company about digital in the post-covid era. So let’s go into it!
Go online
Luxury shoppers are choosing brands and goods even more based on digital information. Today, luxury shoppers follow a mixed online/offline journey, seeking advice from their peers on social media, visiting trusted blogs before entering a store and then posting about their purchases afterward. Online sales of personal luxury goods — apparel, footwear, accessories, jewelry and watches, leather goods, and beauty and perfume — account for 8 percent of the €254 billion global luxury market. By 2025, online luxury sales are predicted to triple to about €74 billion. This means that nearly one-fifth of personal luxury sales will take place online.
source: Digital in the post-covid era, McKinsey & Company report
New opportunities
The epidemic has opened opportunities for new customer segments and markets for e-commerce.
The coronavirus pandemic affects many areas of the economy. Its effects can be felt in shops, restaurants and cultural institutions. But it also significantly influenced consumer behavior. As a result of the pandemic outbreak and the introduced restrictions, the entire process of making decisions about purchasing and purchasing products has changed. Shopping has primarily moved to digital. In many countries, since the beginning of the pandemic, online sales have been growing, and the newest users of e-commerce stores had increased during lockdown periods when access to traditional points of sale was limited or impossible. Obviously, the number of new e-commerce users it’s still getting higher.
source: Digital in the post-covid era, McKinsey & Company report
What’s more, 24% of consumers opted for the first time online purchasing during COVID; 76% of them recorded a positive experience.
source: Digital in the post-covid era, McKinsey & Company report
Personalized engagement
Personalization in e-commerce creates a shopping experience designed specifically for a single customer, not for a broad audience.
Instead of adopting a universal, homogeneous approach to their entire audience, online sellers create critical elements of the customer journey, including website content, e-mails, social media activity, and paid advertising, so that they change depending on customers’ needs and previous behavior. This has a significant effect on the client’s intimacy.
source: Digital in the post-covid era, McKinsey & Company report
The growth and evolve
Since its inception, the luxury industry has been a growth story. Product extensions, store network expansion, entering growth markets – especially China and digital commerce – have been the drivers of the last years. The growth is also driven by many more consumers craving luxury goods. As a result, we have a constant growth of the luxury clientele. As has been shown repeatedly throughout history, consumer desire for the extraordinary will create the way to the next frontiers of the business of luxury. How luxury business models are evolving? That’s how:
source: Digital in the post-covid era, McKinsey & Company report
Brand storytelling
Nothing stays in your memory as long as a well-told story. Not only is it able to interest the audience with its story, but it also often contains a valuable message. And for this, companies use social media. Especially after the pandemic.
source: Digital in the post-covid era, McKinsey & Company report
Brands help consumers contextualize luxury products beyond brand-controlled campaigns by using social media.
Over to you
Most luxury stores closed during lockdowns, so almost all brands decided to launch digital platforms and invest in digitizing their sales processes. However, the pandemic initially inhibited the development of the luxury goods market, which is understandable.
But the finish needs its good ending, as this state of affairs did not last long and the luxury sales market is returning with force. And reports like those from McKinsey & Company only confirm these facts.
