After one of the most disruptive periods in recent history, luxury brands are gradually shaking off the dust and starting to look forward again.
To find out more about where the sector is headed, we asked decision makers in luxury brands around the world about their risks, opportunities and challenges over the coming years.
Our survey was carried out by our partner Coleman Parkes Research in July and August 2021, using a mixture of phone interviews and web-based survey forms.
We received 100 responses from senior decision makers within luxury retail brands based in Europe, the U.S. and Asia.
We found that luxury brands are confident about the future despite current headwinds.
A large majority think their business will be more profitable in the near term.
While the pandemic has accelerated the pace of digitalisation in the industry, there is no rush to abandon physical stores.
Most participants said they did not expect the proportion of sales made online to increase in the next five years.
But brands say they do face an increasing challenge in engaging with younger, more socially-minded consumers, and will need to step up their digital experience to reach these Millennial and Generation Z consumers.
Our survey shows decision makers feel intense pressure not only to reduce their environmental impacts but also to demonstrate good governance practice.
Business travel risks also rank highly, perhaps reflecting a nervousness about returning to the skies post-pandemic.
The need to protect customer data against increasing risk of cyber-crime is a major concern, while supply chain management and trade issues, including Brexit and looming tariff wars, are also high on the list of future risks and challenges.
Getting any of these issues wrong can seriously damage a company’s image.
Because of their status, luxury brands may be held to higher account for their actions than other businesses.
Reputation is not a single risk but a ‘risk of risks’, a complex matrix of issues that needs to be handled with care.”David Bennett | Global Head of Sales, Direct and Facultative
Reputation is not a single risk but a ‘risk of risks’, a complex matrix of issues that needs to be handled with care – which may contribute to the perception in our survey that such risks are more difficult to manage.
Luxury brands are yet again proving their resilience, bouncing back from the pandemic, just as they did from the financial crisis a decade ago.
But while the road ahead is clearer, there’s a growing list of risks and challenges that could make for a bumpy ride over the next few years, to learn more download our 2021 Global Luxury Brands Survey Report by completing the form at the top of this page.