Indian Luxury Market: The New Beginning 2020 and Beyond
By Dr. Sheetal Jain
Covid-19 has caused havoc across all industries including luxury. Companies are forced to relook at their business models to survive in this new landscape. According to McKinsey report, the global luxury goods market is projected to contract by 35% to 39% in 2020. The only option left with the businesses is to adapt or die; pivot or perish. As quoted by Intel CEO, Andy Grove, “Bad companies are destroyed by the crisis; good companies survive them but the great companies are improved and reinvented by the crisis”.
Luxury companies across sectors, from apparel to auto; from hospitality to health and from food to fitness, have pivoted their business models to ensure immediate survival alongside long-term resilience and growth. Companies have resorted to new distribution channels, product line extensions, innovative services, altering product categories and repositioning themselves to rebound. Luxury industry has advanced five years in just three months.
The hospitality industry in India has been the slowest to recover. From Oberoi and Taj to ITC and Hyatt, all are trying to rediscover themselves to bring back the traction. Many have started providing contact-less services such as self-check in kiosks and digital key technology; door to door packages (pick up from home to drop at home); luxury vans with a butler and chef for nearby destinations; etc. As healthy living has become top priority for all, hotels and resorts are trying to reposition themselves by putting wellness at the center of their philosophy. They are offering wellness therapies, mindful menu, yoga and meditation sessions to rejuvenate the guests. Resorts are also trying to reinvent themselves as workcation destination to allow city dwellers to work from such destinations by spending an extended period of time at these resorts.
Few are experimenting with new revenue generating models. For example, Taj is bringing the dining experience to their guest’s doorsteps. They have lately introduced Qmin app for gourmet food online services. Similarly, fine-dine restaurant chain, Diva has launched the concept of DIY kits for gourmet Italian dishes. CAARA, a catering company, has extended its online food delivery service to include gourmet groceries and Masala Library is sending chefs, servers and food to curate unforgettable moments for their opulent consumers.
Luxury concierge services have tried to put their best foot forward during the pandemic. They have provided all kinds of services to satisfy the whims and fancies of the uber rich- from private air ambulance charter to virtual session with celebrity chef and personalized videos for birthday wishes from client’s favorite Bollywood star.
Similarly, in automobile industry, from Lamborghini and Mercedes Benz to BMW and Tesla, all have been mobilizing their resources to make hospital ventilators, protective plexiglass shields and other medical devices. Mercedes-Benz India has redesigned the complete process of buying a car by making it possible to obtain your favourite Benz from the comfort and safety of your home, through their e-commerce platform ‘Merc From Home’. Demand for pre-owned luxury car segment has seen a surge. According to Big Boy Toyz founder, Jatin Ahuja, 75% of sales is happening via online platform. They have made heavy investment to create webstore that gives immersive online buying experience to their customers.
Luxury apparel and accessory makers such as Dior and Loreal have started making disinfectant gel at their facilities that originally made perfumes and cosmetics. Lately, the luxury British heritage label, Burberry launched reusable and sustainable masks with anti-microbial technology as masks has become not just new necessity for the consumers but a way to make style statement. Similarly, many Indian designers like Anita Dogre and Shivan and Narresh have followed the suit. Delhi-based affordable luxury leather goods brand Damilano, which earlier used its e-store only to liquidate products on rebates, is now focusing on ecommerce platforms as a growth channel. Likewise, many other brands like multi-designer store Ensemble which are finding it difficult to pull sales through offline channels even after easing of lock down restrictions are resorting to invest heavily in technology to bring the inventory of its physical store to its webstore. With limits on the functions and celebrations, some brands have switched to more classic collection with a longer shelf life, while others have been working on smart casual collections. These brands are not only offering private client appointments for physical store shopping but are also providing personal shopping and styling sessions on Zoom or video chat. They are making all efforts to ensure health, safety and well-being of their consumers.
In the wake of coronavirus pandemic, fitness freak consumers have been restricted to go to gyms, therefore, the demand for home fitness equipment has visibly increased not just in India but across the globe. To capture this opportunity, Louis Vuitton has unveiled the most stylish range of at – home fitness equipment like dumbbells and skipping rope. With work from home becoming a new norm, they have also introduced a set of opulent playing cards under their homeware line to engage their patrons.
Many of these notions are surely there to stay in the post pandemic era. Therefore, investment in technology which empowers human is the need of the hour. As per a McKinsey report, after the 2008 crisis, companies that prioritized customer service witnessed a stronger rebound compared with the market average. It can certainly prove as a game changer for the companies in the current crisis scenario as well.
(This article has been previously published in ET Retail.)