In 2019, the luxury industry was worth an estimated $1.4 trillion dollars globally. That same year, it was recorded that the Chinese market accounted for 90% of the overall growth of the industry worldwide. The outbreak of the Coronavirus pandemic had an immediate crippling effect and with Italy as Europe’s Covid epicentre, more than 40% of global luxury goods production halted almost immediately.
Although sales were predicted to plunge up to 80% in March 2020, now in 2021, industry experts believe the luxury industry will bounce back stronger than before, with McKinsey & Co. anticipating growth of 4% for luxury retail in 2021.
Millennials and Gen Z consumers make up 30% of all luxury shoppers, and this is predicted to grow to up to 45% by 2025. With the young consumer demanding more than they did before, with sustainability, ethical consumption and the ‘sharing economy’ having deepened during Covid-19, luxury brands must accelerate their work towards sustainability and conscious living if they want to retain this market and stay relevant.
How can the luxury industry, so heavily reliant on global supply chains, bricks and mortar shops and a predominantly global consumer bounce back after the pandemic, appeal to the local shopper and build sustainable practice into brand behaviour?