With retail at the forefront of the sectors impacted by the COVID-19 pandemic, luxury brands must contend with marketing themselves to a consumer base that has been fundamentally changed.
The pandemic has triggered a life-changing shift in values in society in terms of what people are willing to consume and how they consume it. Over weeks and months of lockdown, established patterns of consumerism have been broken down, and new ones have emerged in their place. These are the 5 factors shaping consumer mindsets in a post-COVID world:
1. Re-prioritising wellbeing over productivity
Before coronavirus, people would often prioritise the company they worked for and its productivity over everything else in their life, even their personal health. But COVID has triggered a mass reassessment of values and priorities, and consumers are increasingly looking at companies in terms of what they contribute to society and the environment and making choices accordingly. As a result, all companies are having to reassess the human aspect of their business activities.
Patagonia’s mission to build an “un-company” that prioritises the wellbeing of people and the environment has allowed it to foster a fiercely loyal following united by a shared world view, as well as helping it become one of Fortune’s 100 Best Companies to Work For. Meanwhile, Gucci’s Off The Grid collection uses recycled, organic and bio-based materials as part of an initiative supporting more circular production, allowing wealthy consumers to spend without guilt.
As consumers continue to seek out opportunities to align with companies that benefit people and the planet, recalibrating business priorities and communications in favour of wellbeing is critical.
2. Renewed focus on the smaller things in life
Another effect COVID has had on the consumer mindset is a renewed focus on the things that really matter to them: a connection with people and loved ones, and how we live life on a daily basis rather than on a status-led or career-powered basis. This has huge implications economically because the pressure to consume has been turned off, meaning that consumers will now be much more selective about what they consume.
Crucially, CEOs need to consider what effect social isolation will have on their company’s future relationships with consumers. As we shift in and out of lockdown, people will seek out spontaneous and meaningful human interactions in both online and offline spaces. We will see a spending shift towards simpler ‘luxuries’ like new or existing hobbies and home entertainment, and an increased value on human experiences. Businesses need to be ready to re-align themselves in response to this change in values.
3. Tighter wallets = more selective choices
The shift in consumers being more selective in how they spend their time and what brands they value will be exacerbated by the economic impact of the pandemic. Tighter wallets will necessarily mean consumers are more selective on what they buy, especially now they’ve had a period of time where they’ve got used to staying in and simplifying their day to day life.
To maintain value, brands need to think about how they become a daily essential in people’s lives. Increasingly looking for guidance and support in uncertain times, consumers seek indispensable habit or routine-led products and services that give them positive feedback or reinforcement. Apple is a good example of a brand that has continually given consumers the ability to access things that are important to them. From music and entertainment to health and communication, Apple has touched every aspect of our daily lives. Companies need to find new ways to embed themselves in their customers’ everyday life, whether that’s through product innovations, meaningful content or brand experiences.
To maintain value, brands need to think about how they become a daily essential in people’s lives.
4. Belonging, rather than buying, becomes the new luxury
In line with all of these developments, the idea of what is ‘aspirational’ will continue to shift from buying something expensive as a sign of status to being part of, or belonging to, certain experiences and movements. We’re already seeing this in the rise of stores that have zero visibility or advertising, like the fashion stores Departamento and Bodega in LA, where you have to be ‘in the know’ in order to discover them. Instead of a traditional model of high product volume, high foot-fall and high visibility, their restricted model creates a smaller but very loyal community of people who feel more like members than customers.
Similarly, we worked on an unbranded, invitation-only pop-up for Chanel where the focus was on giving customers a personalised retail experience, rather than pushing them to purchase, to help drive positive hype around the brand from those who felt a deeper sense of belonging to the brand. In light of coronavirus, brands should also be thinking about how to create digital experiences for consumers to belong to. Miu Miu experimented with this when choosing to launch their latest fragrance, Miu Miu Twist, in a video game last year. Despite the inaccessibility of this concept, the fact that only those in the know could experience it significantly boosted its appeal.
5. Consumers increasingly buy into stories
All of these changes mean that consumers increasingly want to buy something that has a story, meaning or purpose behind it, so they can associate themselves with intelligent and aspirational consumerism, rather than an unthinking consumerism associated with excess and non-sustainable goods. We see this in the rise of re-sale and vintage fashion sales: products that are the sustainable choice and have a history and story to them. Mainstays like T.J. Maxx and Nordstrom Rack now compete with resale platforms such as The RealReal, Poshmark and newer ventures like Otrium and Madaluxe Vault.
Moving away from the traditions of luxury, stores are being re-designed to deliver an experiential moment, anchored in story-telling. For example, brands like Louis Vuitton are holding temporary residencies. More like a contemporary art exhibition than a traditional store, these immersive experiences place consumers into visually striking Instagrammable spaces, placing them at the heart of the brand’s unfolding story.
This article first appeared in CEO Today
