Just like pretty much everything, sales of luxury goods were also affected by Covid-19.
However, due to the recent news (Lifting of restrictions, vaccines, etc), an almost 29 percent increase has been noticed in the sales of luxury goods. Especially in luxury handbags. As reported by Bain & Company, who happened to be a leading consultancy in the industry.
With shipping and trading infrastructures getting back up and running, and tourism slowly opening worldwide, sales of luxury goods and items is expected to bounce back to around $330 billion. Which is even more than the last previous years.
Bain and Company predict the recovery in the luxury sector will be fast, but let’s be honest, it only dropped by 24 percent.
Which is a drop in a bucket for the amount of losses other industries have suffered during the pandemic.
Also, the only reason the luxury market declined during covid-19 was due to uncertainty around the shipping of goods and services. So mainly logistic issues. After all, when you have the financial resources, even a global pandemic can’t really stop you.
So the main reason for decline in luxury sales was due to restrictions on travel.
Another major setback for the luxury industry was a complete halt in travel. Reuters explain “Tourism is also a great factor behind the sales of high end luxury goods, especially from foreign tourism. Once that took a back seat, the majority of the market suffered from it. At least initially . . .
Ironically, the luxury industry didn’t suffer much in China. In fact, it has recovered quite nicely and looks very bullish for the year 2021 and beyond. The US also got a boost in their economy thanks to stimulus checks. Research shows a lot of that money was also spent on high end products and services. Mostly on clothing and accessories. Most of these buys were identified as ‘feel good’ purchases or gifts.
This temporary drop in sales also fueled new innovation in this sector as a lot of brands went online that were hesitant to do so in the past.
In fact, the luxury industry has embraced ecommerce solutions wholeheartedly and are now one of the leading users of the technology. A popular payment processor PYMNTS, recently shared that the luxury sector now counts for 20% of online retail sales.
This trend is expected to continue and more online sales records will be broken.
Especially during 2022, as most of our economy is expected to bounce back around this time.
Covid-19 has definitely changed things. For some it’s been a blessing in disguise, for some, maybe not. One thing is for sure, the market, and the people are ready to get back out there and enjoy life.
As far as we know, nothing makes life better than enjoying luxurious items with the people you care about.
So although a lot of people have been affected by Covid-19, including the rich, when it comes to a full recovery, it seems like we are all looking forward to it.