In the last eight months, Italy, like the rest of the world, has found itself facing exceptional circumstances. The pandemic has forced people to deeply review fundamental aspects of their daily lives, including their purchasing habits. The first wave of COVID-19 imposed a series of transformations on most industries that not only dramatically impacted the production, distribution, and communication system but also redefined the values of brands. Today, we are witnessing a resurgence of the virus that is jeopardizing the fragile recovery that had only just begun. The second wave of recovery will have to be quickly integrated and harmonized within institutional narratives in order for these to be coherent and functional for businesses.

What is the context that luxury companies are currently operating in? How is luxury brand marketing responding when it comes to establishing and maintaining relationships with consumers? What luxury industry marketing trends are helping to rebuild the “new normal” that is continually threatened by the resurgence of the epidemic?


The luxury sector during the second wave

Even luxury companies have felt, and are still feeling, the effects of lockdowns and travel restrictions, of slowdowns, and forced interruptions to industrial processes. 

Interviewed by Il Sole24ore in May this year, Matteo Lunelli, president of Altagamma, made an initial assessment of the situation: “The pandemic has immediately hit the high-end industry worldwide and will lead to a 20% drop in turnover in 2020.” 

Last year, 2019, had ended with a positive quarter and the beginning of 2020 also proved “very promising.” However, the pandemic and the resulting national lockdowns and air travel restrictions brought the entire luxury personal goods industry to an abrupt halt. The effect was so severe that forecasts on the restarting of the sector, which at the beginning of the summer gave hope for 2-3% growth (for the five-year period 2020-2025), will probably have to be revised downwards.

Nadia Portioli, analyst at the Mediobanca research center, gave a further update of the picture, explaining how fashion has in fact been significantly penalized by the spread of the virus, with an average drop of 7% in the turnover of multinationals in the first half of 2020 and, in the same period of time, a 28% loss of revenues for Italian companies. In the second quarter, the crisis worsened considerably, with industry revenues dropping 41%, nearly tripling the already negative result of the first quarter of -15% (source: 

Even if Made in Italy, the undisputed symbol of luxury in the world, is suffering the long wave of the crisis linked to the pandemic, these are sectors (fashion, accessories, fragrance, automobile, and tourism, just to name a few) that have been driving the Italian economy for decades and that, thanks to the investment in digital in recent years, seem better equipped to react with strength and creativity to the unfavorable economic situation.


Luxury industry marketing trends for the “new” normal 

On October 26, McKinsey published an important update, confirming that in the 13 countries taken into consideration (including Italy), consumer sentiment and behavior continue to reflect the uncertainty caused by the pandemic through: a choice of value increasingly given to essentials; brand loyalty put to the test; a preference for local and national products and services; the urgency of the transition to digital; and the decision not to travel for vacations and holidays.

In Transforming The Luxury Industry For The New Normal, a recent article published in “Forbes,” Christophe Caïs (founder and CEO of Customer Experience Group, a customer experience agency for premium and luxury brands) identifies with the premise that there is significant variation in sentiment and behavior across countries. In fact, a number of trends (and also luxury industry marketing trends) seem to identify the “new” normal of consumption; they relate to three key aspects:

  1. The behavior of luxury consumers
  2. Social responsibility of luxury brands
  3. The digital approach of luxury brands

Now, let’s try to contextualize these “new normal” trends in contemporary reality and the new luxury industry marketing trends.


> INFOGRAPHIC – Digital Luxury Experience: When luxury becomes digital


Changes in luxury consumer behavior

Buying trends have changed and new ones are emerging. To stay relevant, brands must learn to distinguish long-lasting structural luxury industry marketing trends from ephemeral ones and transform their business to adapt to the new normal by first taking action on how they engage with their consumers.


Chinese case: travel shopping and digital 

According to the report released this May by Bain and Company and Fondazione Altagamma, China will continue to play a leading role in luxury goods, reaching almost 50% of the global luxury market, valued at €320-330 billion, by 2025 (source: Bain & Company Luxury Study 2020 Spring Update). 

The diffusion of COVID-19 has inevitably downsized travel shopping (especially duty-free shopping) particularly popular among Chinese tourists used to buying in Hong Kong and various European cities, especially during vacation. To give an idea of the size of the phenomenon, consider that in 2019, about 35% of the global luxury market was from Chinese consumers while only 11% of purchases were made by Chinese citizens within national borders. According to the latest forecasts, however, the latter percentage is set to rise steadily, to settle between 26% and 28% by 2025.

The slowdown in Chinese travel shopping actually seems to precede the pandemic. Since 2018, it has become cheaper to buy high-end handbags, clothes, and jewelry in China thanks to a reduction in value-added tax (from 17% to 13%). At the same time, a systematic crackdown on the practice of daigou, under which agents or tourists buy luxury goods abroad and resell them in China, also began. Further changes introduced in early 2019 made it cheaper to buy directly on e-commerce platforms rather than using middlemen. Finally, the weakening of the Chinese yuan and the delicate situation in Hong Kong had already contributed to increased domestic spending.

Although luxury brands have been building an online presence in the Chinese market over the past few years, the pandemic has forced them to venture beyond their comfort zones, and the results have not been exciting. According to Veronica Wang, partner at consultancy OC&C, the brands that began distributing their content on digital channels during the first wave failed to establish an interaction with consumers that lived up to business expectations, for two reasons: Because the market was just recovering and because the upstream preparation was inadequate.

Even in the case of a brand like Louis Vuitton, the attempt in March to stream on the social commerce platform Little Red Book proved insufficient. That’s because, as Chris Gao, an analyst at investment bank China Renaissance, explains, “live streaming for luxury brands is a different thing than what we usually see on “Taobao Live” (the live streaming and e-commerce channel owned by Alibaba). It’s packed with content that’s better suited for new product launches, but focuses much less on sales” (source:

Methods like live-streaming might not convert immediately into transactions, but they do help increase brand awareness for luxury groups. For this reason, they seem destined to become increasingly central to marketing strategies, not only in reference to the Chinese audience, which is already digitally mature, but on a global level. In fact, the final purchase decision is now made at the end of a decision-making process that begins well before the person goes to the store and is developed through multiple touchpoints, most of which are digital and online.


Gen Z and Millennials: seeking value, responsibility, and authenticity

Gen Z and Millennials are shaping the future of shopping, and in doing so, they are revolutionizing companies’ expectations. Luxury brands, as is the case for organizations in most industries, must continually reinvent themselves in order to intercept the consumption habits that the pandemic imposes. But this incessant work of progressive adjustment cannot simply be considered a contingent response to the crisis. Instead, it is increasingly becoming part of the genetic makeup of luxury brands.

In order to expand their target audience, reaching even the youngest consumers (we talked about the increasing importance of the HENRYs category here) brands must move in three directions: 

  • redesign their communication and marketing actions with a decided customer-centric approach
  • adopt increasingly advanced e-commerce methods,
  • exploit the full potential of digital platforms.

The logic that increasingly informs purchasing behavior today, which is also and above all valid for luxury goods and services, is based on a search for value, authenticity, and individual and collective responsibility. The same logic is shared by both Millennials and Gen Z. What changes is the intensity, the degree of adherence to a statement that we might say is identity-based, and the direction of the projection of the value communicated.

Intensity. The tendency to critically, openly, and consciously approach the relationship with the brand certainly began with Millennials, who were the first to participate in a digitized and interconnected world. Today, Gen Z is having the same experience, but in an accelerated way, that is, in an exceptionally intense form and in a decidedly short time frame.

Identity. A purchase choice today, more than before, is a multidimensional choice. The point on which Millennials and Gen Z diverge lies in the degree to which they belong to a particular dimension, and in the (momentary) bracketing of the others. In other words, Gen Z, more than Millennials, seems to want to base the decision purely on values, and neglecting or minimizing factors that have always been considered crucial, such as price. The emphasis is shifting to the ability of the individual to interpret the value content of the brand to match it and make it personal. Marketing must be able to capitalize on this affirmation of self, making use of more interactive and inclusive tools.

Direction. Gen Z, much more than Millennials, appears to be looking for unique, distinctive, and newsworthy objects, and it is able to change direction and mentality, moving from the exclusivity typical of luxury to uniqueness, to be perceived more than shown. The messages embedded in the object or service, after being re-signified in the purchase and use, are projected outward through referrals, microblogging, and social posting. The moment they are introduced into the media ecosystem of social networks, they carry indelible marks of the consumer.


What luxury goods consumers expect from corporate social responsibility 

CSR is one of the most important luxury industry marketing trends. Gen Z expects a new level of corporate responsibility to be an integral part of a brand’s mission. However, this is also common to other luxury consumer categories. 

According to PR Newswire, which reports on the results of a survey conducted in 2019, the priority seems to have shifted decisively to environmental and human-centered causes. The majority of consumers surveyed said attributes that have become essential to a company’s successful operation are a commitment to environmentally friendly business practices (71%), social responsibility (68%), and giving back to the local community (68%), while less than half of the sample (44%) consider price to be key.

In general, customers are more aware of the impact that their purchasing decisions have on the environment and the community, and they trust economic entities that can guarantee respect for these beliefs.

We have written here about corporate social responsibility in times of crisis. The reflections contained in that post also seem valid regarding the economic situation created by the spread of COVID-19. Luxury brands are being called upon to “be there to be relevant” and in order to succeed in this aim, they must adopt a good Corporate Social Responsibility strategy that includes actions that are perceived as essential (environmental protection, sustainable work, waste reduction). If the actions are capable of arousing a reaction from the local community, there is almost an immediate positive benefit for the brand reputation. 

Social responsibility begins as a strategic vision that involves the entire company and is reflected throughout the customer journey in the relationship with the customer. For this reason, in order to reassure an increasingly attentive and aware consumer, in crisis situations, the first step must be to clearly define and communicate the company’s “value priorities,” which must be followed up in a coherent and effective manner.


The acceleration of the digitization of the luxury industry

The new normal has increased the already rapid pace of digitization in the luxury industry: the migration to omnichannel and social media platforms such as WeChat and Instagram has accelerated, the use of teleconferencing apps has become commonplace, and an exceptional boost has finally been given to virtual shopping sessions designed to replicate the traditional in-store experience. In all of these cases, an attempt was made to create a personal and all-encompassing relationship with customers by learning to use the full capacity tools that were already available.

As a result of the new lockdowns ordered by different governments, digital shopping will continue to play a predominant role in all countries and across all product categories. We can also anticipate that digital touchpoint traffic will intensify during the holiday season.

As we have argued elsewhere when discussing the digital luxury experience, luxury customers were among the first to enthusiastically embrace the digital lifestyle, so much so that nearly 80% of sales would now be digitally influenced. The fact that digital luxury is increasingly configured as a C2C economy, with the consumer firmly at the center of the purchase path, has probably represented a resource capable of ensuring brands a resilience that has been lacking in other sectors. In a moment of objective difficulty, the luxury consumer actively contributes to redefine the content conveyed by the brand, provides indications and judgments, feeds the narrative, and maintains a vital relationship, both personal and public, with the brand.


What happens when luxury becomes digital? Download the free infographic to learn more about it!

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