The last two years have shown to be a real challenge for retailers, especially those whose products were marked as non-essential. Multiple lockdowns during the COVID-19 pandemic shook the world of retail like nothing we have seen before.
Whilst the impact of the pandemic has been deeply explored over the past two years, it is interesting to analyse the impact on the luxury goods sector, which has seen a specific impact on the traditional way that consumers buy products
Cutbacks on personal spending and an uncertain economic climate drove a sharp fall in demand for the luxury retail market through the early months of 2020. Although recently there has been a resurgence in spending on luxury goods with the global market returning to pre-pandemic levels, it is clear that demand for the traditional shopping experience has certainly evolved, and we are witnessing a new era of luxury goods.
Pent-up demand and recovery of luxury retail
The pandemic had a huge impact on consumer spending habits, as the time spent in lockdowns created pent-up demand for certain products. Many consumers who enjoyed treating themselves to luxury goods had to focus on their basic needs in the short term, with so much uncertainty around how the pandemic would develop.
As fear of rising infections slowed and restrictions were lifted, there was a massive uplift in brick-and-mortar shopping. Consumers who found their inspiration for shopping online headed to the stores looking for a human connection. Although the main objective is making a purchase, retailers must not forget about the importance of human interaction in the decision-making process. For many consumers, trust in a brand or product relies on an emotional connection with sales assistants in the store.
Rise of technology
Life in lockdown gave many a new perspective on their health and personal space. Many consumers are still wary of crowded spaces fearing new variants of the virus, and we can’t dismiss how deeply COVID-19 changed the lives of immunocompromised and vulnerable people.
Retailers have invested significant time and expertise in developing e-commerce solutions that allow consumers to come closer to the products online, having witnessed the impact of the pandemic on how people shop. Solutions such as virtual dressing rooms have become widely utilised, but there has still been something missing in creating that next level of connection with the customer. This is especially the key with luxury brands’ demographic who expect the best.
Personalising an online world
Live video and chat services gained popularity due to the personal touch that e-commerce mostly misses out on. Live chats supported customers in online shopping in a practical sense but still failed to deliver on replicating the experience of face-to-face interactions with sales assistants in-store.
Video chats, conversely, allow for the clear presentation of high-value products which typically require more consideration and research from a customer before purchasing. As such, face to face conversation certainly fills the gap in the online customer journey. Live video chat service – with trained advisors on the other side of the camera presenting all product features that specifically interest the customer – can help recreate a real in-store experience.
Interestingly, some retailers that began exclusively online are now opening brick-and-mortar stores to drive people to online stores for purchasing, and to cement their brand’s legitimacy; demonstrating that in-person and online shopping go hand in hand, and those retailers that utilise the omnichannel experience will find the most success.
The future of luxury shopping
Retail e-commerce sales have continued to grow throughout the pandemic, even as brick and mortar stores reopened, reaching a value of 28.9% of all sales in 2021. The trend is a sign of a consumer habit that is not only here to stay but to grow even more. Why spend time in a busy store and queue, when booking a slot with a trained representative is within reach? Technologies like video chat have become fundamental in providing a high-end, personalised experience from anywhere in the world.