Luxury Brands Focus on Local Markets for Long-Term Sustainability
After COVID wiped out the tourism industry, luxury brands shifted their focus to local markets to meet the needs of today’s luxury consumers.
There is a new way of thinking about customers in luxury brands. It’s changing everything from eCommerce, to local boutiques. The very brands of luxury sellers are adjusting to meet this new normal.
This blog will investigate these shifting trends and how it can positively impact your luxury brand.
COVID Upends the Link Between Luxury Brands And Tourism
There’s always been something natural about the connection between luxury brands and travel.
For one, both industries are aspirational, dreaming big, and enjoying all life has to offer. For years, luxury brands have been heavily dependent on tourism to provide much-needed revenue. Especially from those travelers who arrive eager to spend money on high-end items and keepsakes.
All that changed with the pandemic. Travel restrictions forced a massive slowdown – if not a complete stop altogether – of the vital traffic of tourists. Luxury brands could no longer rely on travelers embarking on exciting journeys and buying lavish items to match the experience.
It’s been more than a year since many of the first shut-downs began. While luxury brands are keeping a hopeful eye on the travel industry, they’re quickly adjusting to a new way of reaching markets that are more resilient to the changes of an uncertain stream of revenue.
With every problem exists a solution. In the case of luxury brands, there are now lucrative opportunities to leverage in local markets.
Younger Consumers Are Locally Focused
The leaders of luxury brands have been dealing with the consequences of the deglobalization effects of the pandemic. More businesses realized the need to turn their focus to local markets and strengthen their bond with consumers closer to home.
None of this is to say that globalization will disappear – it’ll just be trending downward for the time being.
Many people believe that once the pandemic is behind us, people will be chomping at the bit to resume traveling around the world.
But the lasting effects of the COVID crisis won’t disappear overnight.
The economy has been rocked, and people have lost jobs and income. Meaning travel isn’t an option for nearly as many consumers as it once was.
On top of that, younger consumers want to be in touch with their local scene and strengthen these economies.
Thinking Local Means Thinking Digital
There’s an old adage that should dictate how luxury brands strategize: think locally and act globally.
Just because you can’t rely on travelers to buy your products doesn’t mean you can’t access customers worldwide. You just need to think locally, and act digitally.
Places like South Korea and China are brimming with young, local customers with money to spend. They’re eager to purchase luxury items with highly visible logos that show off status and success.
While you can’t rely on these wealthy consumers to travel to big US cities and European capitals to purchase your products, you can meet them where they are with a strong digital digital presence.
There are other factors as well, that are changing how brands relate to local markets. Much of the US and European middle-class consumers have been priced out of luxury markets.
The pandemic put a spotlight on the inequities many consumers have felt for a long time. Luxury brands are taking a note from this shift and are changing their messaging and image. Many brands are distancing themselves from a new negative association with glam and glitz and moving toward a more muted, authentic and conscientious definition of luxury.
Dealing with these shifting sentiments requires a significant transformation for luxury brands, which are needing to lean into digital and social commerce channels to serve regional customers.
Ensuring a Seamless Digital Experience
Through Customer Relationship Management (CRM) systems and local content, streamlined digital efforts help luxury brands cater to local clients.
One example is Ruyi Xu & Co’s brand manager for Switzerland who recently started a brand-specific Instagram page. Staff will use social channels to reach, convert, and serve local contacts. This means local sales teams are expected to become micro-influencers.
Moreover, many luxury brands are moving beyond previous hesitations about the digital marketplace and sales channels of eCommerce. Not a moment too soon since in-person shopping isn’t an option right now for most consumers.
It’s becoming more apparent, the only way to thrive in the social distancing age is by expanding online strategies and sales channels and honing the messaging that will connect with today’s luxury consumer. That also means ensuring sales associates have the tools and training to aid in this shift in consumer behavior.
Shifting your business model presents an array of challenges. But you need to pivot toward a digitally-focused strategy if it’s going to flourish long-term. Luxury brands seeking new target markets should contact The Bowerman Group. We have the upper management and C-Suite talent who can help guide your brand with this major strategic pivot.