The Impact of COVID-19 on Consumer Behavior in the Luxury Industry

Abstract

The following paper is aimed at understanding how the COVID-19 pandemic has changed consumers’ attitude towards consumption of luxury and discretionary goods, what are the consequences of these disruptions, and what strategies brand can employ in order to survive in a post-pandemic future. This situation served as a catalyst to accelerate some of the True Luxury Consumer trends that were beginning to gain popularity in the past few years, such as the prioritization of experiences over physical items, resulting in a tendency towards minimalism; the increased interest in sustainability, ethics, and the Corporate Social Responsibility commitments of brands; the enhanced use of online distribution channels, and the consequential need for a seamless omnichannel strategy which could effortlessly and efficiently replicate the offline, in-store experience on digital platforms; and, finally, the emergence of new ways to experience luxury goods which prioritize accessibility over ownership, such as the second-hand market for luxury as well as luxury rental services, like Rent The Runway. The pandemic has highlighted a series of issues in society, healthcare, and businesses; the consequences of these issues have beentragic, but also eye-opening for brands as well as consumers. In the clients’ perspective, big companies hold the responsibility to not only provide a product or a service, but also to be helpful assets to their communities. Brands should live up to these expectations, not just to survive in the “new normal”, but also to genuinely help build a better future once the dust settles.