Business Strategy

Coronavirus:
Luxury
Strategies

The Covid-19 pandemic is driving systematic

change across the luxury sector. Here we outline the
strategic actions that luxury brands should consider
taking during the crisis and the recovery

Gucci
 Analysis
The coronavirus outbreak is disrupting and
casting a shadow over many markets around
the world – and the luxury retail sector is no
exception. McKinsey estimates that the
global industry for personal luxury goods will
contract by 35% to 39% in 2020 compared to
the previous year as a result of the crisis. 
Despite the harsh reality, the top 5% of
consumers still have discretionary income to
spend, and luxury brands are shifting their
strategies to serve them where they are, with
an acceleration of digital capabilities, new
discovery tools and virtual customer service
that echoes the exceptional level of IRL
interaction that luxury shoppers demand and
expect in-store.
Aside from selling, the pandemic is giving rise
to a new backdrop for luxury brand
communications, with a strong focus on
social connection and customer
communities. New narratives of care and
compassion are coming to the fore as luxury
brands have to add responsibility, generosity
and social improvement to both their
products and their actions in order to align Get t y
with new consumer values and a rapidly
evolving retail landscape. 
 Digital-First
Adopting a digital-first strategy is
paramount for brands and retailers to
survive the Covid-19 pandemic. As stores
remain closed in many parts of the world,
people quarantine at home and we continue
to see increased digitisation of products
and services, e-commerce is now the crucial
point of sale, connection and community
building for luxury brands.
With McKinsey expecting almost a quarter
of US and European consumers to increase
their spend online in April 2020, brands
must look to accelerate digital investments
and shift marketing spend to online
channels, with an almost forensic focus on
customer service for the top 1%.
Those who enhance their digital strategy
now will win out, either by launching
innovative new channels or by
experimenting with digital innovation to
simulate the IRL experience online. Burberry,
for example, has teamed up with Google to
launch a new AR shopping tool activated
from mobile web search results. Fine
jewellery brand Annoushka has trained
retail staff to use Hero, a livestream
shopping app, so they can sell even when
stores are closed.
We’re also seeing some luxury brands
pivoting to online for the very first time as
their stores have been forced to close.
Heritage accessories label Delvaux
debuted transactional e-commerce in April
2020, while watchmaker Patek Philippe is
now allowing select retail partners to sell T mall
certain models online for the first time.
Hard luxury brands including Montblanc,
Piaget and Bulgari have launched flagship
stores on Alibaba-owned Tmall to reach
more customers in China.
As people are more receptive to buying
online than ever before, luxury brands
should take this opportunity to ramp up
digital-first strategies. For many luxury
players, this will require a mindset shift as
they will need to begin to operate like pure
digital players, rather than thinking about
what benefits online can offer their offline
channels.
However, this will come at a cost. Since
digital channels can be less profitable
than bricks-and-mortar retail, brands need
to establish a balanced model that Laings
prioritises digital growth with cutting-edge
customer experience.
 Focus on Service
Luxury is synonymous with impeccable
customer service, and this must be
recreated online for top spenders, who
expect the same level of attention and care
as they would in a high-end department
store or boutique.  grow as it allows for immediate, personal
To reach shoppers who still demand a high-
touch human experience, brands should
look to connect them with sales associates
via virtual platforms such as Zoom, Skype
and FaceTime. Watchmaker Hublot has
launched a digital boutique to serve clients
wanting to purchase a new watch during
the coronavirus outbreak. Using Skype or
FaceTime, Hublot sales advisors aim to
recreate the same level of customer
experience as shoppers would receive in-
store, with a focus on personalisation.
With people getting used to life in the new
normal, big spenders could likely expect to
continue shopping via Zoom, especially in
luxury department stores where stylists
could show them around the space and
help them shop – a strategy that Harvey
Nichols has experimented with.
Brands should start planning now how
they can continue and build on online
customer service strategies indefinitely. We
predicted the rise of texters as a key
shopper group for 2020, and expect this to
service, meeting shoppers in an intimate H ublo t
space.
For multibrand boutiques stocking luxe
streetwear, consider product drops just for
the virtual store; and for niche categories
such as high-end skincare or bridal, look to
private, paid-for Zoom consultations
between customers and associate experts.
Above all, one-on-one, online customer
service can help to combat the loneliness
that many people are feeling in self-
isolation, and creates deeper connections. 
Convenience and fast delivery are also key
considerations for luxury brands serving
customers during the pandemic. Women's
RTW designer Mary Katrantzou has
implemented an "at your doorstep" service,
which invites shoppers who live in London
to try pieces on at home, delivered by T hr ead s S t y ling
contactless couriers who wait outside as
you try on in case of any returns.
 Pivoting to Live Video
Livestreaming is a key priority for online
engagement with luxury brands throughout
the pandemic.
In China, livestream events emerged as a
winning strategy for luxury retailers to give
consumers a way of interacting with their
brand in realtime, immersing themselves in
live storytelling and educational events.
Burberry, Prada and Bottega Veneta all
signed onto Tmall’s monthly luxury
livestreaming promotion, while Chinese
social community Xiaohongshu actively
began rolling out its livestreaming tool
when coronavirus first forced people to
shelter in place, with Louis Vuitton one of
the first luxury brands to use the feature on
the platform to promote its summer 2020
collection. Some 15,000 users watched the
streaming with 6.25 million comments and
likes.
Live video has similarly taken off in the
West, with high adoption rates. Instagram
and Facebook Live views doubled in March
2020, with CEO Mark Zuckerberg saying that
usage was so high that “the company was
just trying to keep the lights on”. During the
third week of March 2020, Instagram
reported a 70% increase in Live views.
Livestreaming is a key opportunity for
luxury brands to drive sales and engage
authentically with consumers, and can Lo uis Vuit t o n
also be an innovative way to market high-
end product launches during this time.
Dior, for example, introduced its Gem
Clutch in China on WeChat just before the
brand began to roll it out in the West.
For smaller brands, accessible live video
platforms allows them to continue
intimate, one-on-one dialogues. High-end
skincare brand Dr Barbara Sturm is using
both privately scheduled and public video
streams, including personal consultations
Bur ber r y
through FaceTime and WhatsApp, to drive
sales. It also hosted a digital masterclass
on Zoom where, for $10 each, almost 100
customers tuned in to a 75-minute
skincare lesson, with more than 50% of
people going onto place orders
afterwards. 
For going live to work, it should be
participatory and interesting, giving
customers a glimpse into the brand, rather
than look like jumping on the bandwagon.  Dr Bar bar a S t ur m
 Building Creative
Communities
We previously highlighted how creative
communities are banding together with new
grassroots initiatives to help keep their
industry afloat during these difficult times.
We’re also seeing a major shift towards
luxury brands creating their own online
creative communities, engaging shoppers
through outlets that support the arts and
young creatives, or building platforms that
educate and inspire while putting forward
their own social mission.
From Marc Jacobs’ WFH series to Ganni’s
new Talks podcast, across categories
brands have been pivoting to lifestyle
content that aligns with culture and
creativity. Often using Instagram’s Live
feature to showcase everything from
meditation to cooking, live music, book
clubs and virtual exercise, luxury retailers
are moving away from traditional product
marketing and exploring a new cultural role.
With their stores closed and operations
drastically reduced, this opens up a new line
of communication with their consumers
and making them feel part of a community.
In mid-March 2020, Loewe launched its
Loewe en Casa digital series, featuring the
brand’s Craft Prize artists, who host live
streams on everything from metalwork to
weaving. Prada has launched a series of
digital talks on Instagram, called “Prada
Possible Conversations”, connecting
different people from the fashion through
Lo ewe
live dialogues on fashion, art, cinema,
literature, architecture and more,
broadcast on the brand's official account. 
Alexander McQueen has debuted the
“McQueen Creators”, a community project
to inspire creativity during the crisis. Each
week, the brand launches a new creative
concept to encourage followers to “engage
artistically” with imagery and pieces
shared on the brand’s social media
accounts.
Now, more than ever, in order to capture
the attention of high spenders, brands
should communicate not only in an
emotional way, but also through fun and
interactivity. Creating community through
storytelling is crucial to establish a long-
term relationship that can be further
enhanced in the future. Alexand er McQ ueen
 Soft-Sell Strategies
Mastering the subtle art of the soft sell is a
key strategy for luxury brands looking to
deepen connections with customers while
still improving the bottom line. Now more
than ever, soft selling strategies should be
considered given heightened sensitivity
around discretionary spending as the
wealth gap widens – something that the
Covid-19 pandemic is likely to exacerbate.
With marketing budgets frozen and new
campaign content put on hold, luxury
brands should use this time to create
curated experiences that invite customers
into their world, with entertaining and
uplifting branded content that can be
pushed out alongside links to buy
supporting products and items.
Women's RTW label Tanya Taylor has
pivoted its e-commerce to drive storytelling
and ramp up loyalty, rather than pushing
heavy discounts during the crisis. The brand
has offered sporadic flash sales featuring
archival items, with each purchase
triggering a donation of five protective
masks for organisations in need.
The company said the archive sales
have influenced full-priced purchasing on
the site as well. 
Luxury jeweller Irene Neuwirth has taken a
soft approach to marketing and sales
during the pandemic. Where the brand had
typically tagged Instagram posts with
shopping links back to the website to drive Ir ene N euwir t h Ir ene N euwir t h
revenue, Neuwirth has decided to remove
hyperlinks and prices from all posts going
forward. The idea now is that people can
simply enjoy images of the products
without being fed a sales message.
"Do people need jewellery right now? Of
course not, nobody needs jewellery,”  said
Neuwirth. “Does anybody want to enjoy a
beautiful picture? Tons of people like to do
that.”
As digital services become more
embedded in our everyday lives, luxury
brands will have to differentiate through
soft-sell strategies that closely connect
consumers to relevant branded content
and offer seamless inspiration-to-purchase
processes.
T any a T ay lo r
 Discovery Evolves
With people shopping solely online during
the coronavirus pandemic, the brand
discovery process has evolved to reflect new
digital behaviours and advances in
technology.  mall in the southern Chinese city of
Luxury brands and retailers are working
with developers to create virtual stores and
new platforms that enable online discovery,
emulating the feeling of visiting a mall or
boutique IRL, when they are in fact closed.
In February 2020, Dior unveiled a new
virtual beauty boutique, which looks
identical to its store on Paris’ Avenue des
Champs-Élysées and allows viewers to
wander around, learn about products and
make purchases.
The boutique will be changed six times per
year, with different collections, products and
store design concepts showcased each
time. Once inside the virtual space, visitors
can check out the perfumes, gift boxes, bath
and body products and a video display wall
at the back. It’s also possible to find out
information about specific products and
order them simply by clicking on them.  and foster discovery will resonate with the
In China, luxury art mall chain K11 is
trying to keep customers' attention and
share of wallet during the crisis by offering
a 360-degree panorama tour through its
Guangzhou.
K11 launched the virtual store via a Chr ist ian Dio r
WeChat Mini Program in March 2020 that
allowed users to tour the mall and
purchase from 46 different luxury stores.
Going forward, luxury consumers will
be increasingly comfortable with online
platforms and new methods of digital
product discovery, especially as word-of-
mouth recommendations diffuse amid
prolonged social distancing.
As highlighted in our AR-Powered
Shoppers report, virtual and augmented
reality are also likely to play a bigger role
in the customer discovery process, such as
the virtual shoe try-on feature in Gucci’s
app. In spite of these difficult times,
brands who service consumers with digital
initiatives that embrace new technologies
next generation of luxury shoppers.
 New Narratives of Care
The Covid-19 pandemic is helping to rapidly
evolve the meaning of purpose beyond CSR,
accelerating values shifts across the world
to become a central business priority.
This marked shift towards care and
compassion has emerged as a bright spot
on an otherwise turbulent retail horizon, as
brands have found innovative ways to
connect and make a difference, stepping up
to provide emotional, financial and medical
support where governments haven’t.
As explored further in Coronavirus: Brand
Strategies and Coronavirus: Corporate Care
Strategies, the luxury market had led the
way, with major donations and initiatives
from leading luxury brands, individual
designers and conglomerates that have
helped to fight the coronavirus.  bring an added element of personality,
LVMH has also pivoted its annual Prize for
Young Designers into a solidarity fund
for all of the shortlisted emerging brands.
Instead of vying for a main prize of 300,000
euros in June 2020, the eight finalists will
each receive 40,000 euros.
At the heart of these shifts lies a sense of
community and togetherness, helping
luxury brands to seem more warm, caring
and above all, human.
"The prize is a family, it’s a community,"
said Jean-Paul Claverie, adviser to LVMH
chief Bernard Arnault, predicting this LVMH
community would rally around the former
prize winners, whose brands stand to be
impacted by the global economic crisis. 
Brands have the opportunity now to offer
comfort, care and distraction to their
communities, driving long-term loyalty and
brand advocacy.
Look to replicate the high standard of
service in bricks-and-mortar stores via
WhatsApp or Zoom, which in turn can
humour and transparency. Savile Row
tailors Huntsman, for example, is doing
virtual consultations for new and existing
clients, and pursuing a Design Your Own
Tweed competition, with downloadable
PDF templates and a call for submissions
over Instagram. LVMH Pr ize.co m
 Meaningful Action
As Covid-19 has spread across the world,
much of the fashion industry has struggled
to stay afloat, facing major obstacles such
as store closures, an excess of unsold
merchandise and logistical difficulties.
The brands who are navigating these waters
with success are those that are redefining
the luxury playbook, coming up with
inventive and creative ways to give back to
local communities while keeping their staff
in business.  The coronavirus pandemic is a call to
First outlined in our Coronavirus: Corporate
Care Strategies report, a number of luxury
brands are stepping in to help amid global
shortages of PPE, doubling-down on
support and providing medical solutions.  shifts such as these that will stay top of
New York-based designer Christian Siriano
has emerged as a trailblazer in these
efforts: the designer reached out personally
to New York Governor Andrew Cuomo on
March 20 asking how he could help, and
has since redeployed his team of
seamstresses to produce protective
equipment for New York City hospitals. The
team has so far shipped more than 10,000
masks to frontline medics.
What began as a goodwill gesture has set
off a chain reaction of brands following
suit, transforming fashion ateliers from
non-essential to essential workplaces.
Brandon Maxwell has mobilised his teams
to make protective masks and gowns,
while UK designer Patrick Grant has turned
his Lancashire factory over to creating
Br and o n Maxwell
600,000 pairs of scrubs for British NHS
workers. 
action for many brands to pivot, hitting
reset on how they operate. While we've
seen many big luxury players making large
philanthropic donations, it is meaningful
consumers' mind for longer.
Going forward, business success will
increasingly be defined by how much a
company adds value to people's lives,
what it contributes to society and how it
stands up to support those in need. With
the pandemic exposing government
shortfalls on a global scale, brands will be
under the spotlight more than ever. Those
which pursue purpose and take action
without a profit-seeking agenda will win Pat r ick Gr ant
out. 
 Online Messaging Shifts
As the world continues to lock down to
flatten the curve of the Covid-19 pandemic,
luxury brands are shifting gear, pivoting
online messaging to reflect the ongoing
situation.
Looking to the future with a sense of
optimism is a key strategy for online luxury
brands and third-party retailers, which are
using their websites and social channels to
promote new collections alongside
messaging that looks ahead with positivity.
Online luxury retailer Matches has reworked
one of its major S/S 20 trend stories as New
Horizons, designed "for future days on the
sand", while Moda Operandi promotes
"vacation-ready minimalism to secure in
advance" alongside a playful suggestion
that "the beach can come later". The luxury
retailer's frank and honest tone of voice
comes across as authentic, calling on
shoppers to have a renewed sense of
optimism as summer approaches, even
though it might seem far off.  language should reflect our new reality,
Mytheresa has also adopted a positive
tone of voice for its new online drops, with
an edit called "The optimist's guide to
spring dressing". Creating a sense of
escapism is also key, with Temperley
London pushing wistful "Summer
dreaming" edits.
As the retail landscape slowly enters the My T her esa Mo d a O per and i
early phases of recovery, luxury brands
should be mindful not to use "we're back"
messaging, but take a low-key approach,
be authentic, genuine and empathetic.
Continue to focus on feel-good messaging,
creating engaging online campaigns that
instil optimism and hope – without being
false.
There is going to be a shift in what people
buy, based on new post-crisis priorities. An
authentic tone of voice and a level of
transparency will be important, revealing a
human side to the brand or retailer behind
the message. Above all, imagery and
whatever that may be.
Mo d a O per and i
 Finding Joy in the Past
Prolonged quarantine measures around the
world are forcing brands to think outside of
the box, finding creative ways to inject
newness and keep customers happy. As
photography studios are closed, savvy
luxury brands are looking to their archives
to communicate and engage with fans on
social while campaign shoots are on hold.
US designer Brandon Maxwell is using his
brand's Instagram channel to spread
positivity and keep people engaged, without
publishing any new content. Throughout
March and April 2020, the designer has
been posting his personal favourite
memories from over the years, from runway
shows to magazine shoots,
accompanied by captions that explain how
much that moment in history meant to him
and the label. 
Louis Vuitton has also been dipping into its
archives, sharing iconic campaign imagery
shot by French photographer Jean Larivière
in the 1980s under the hashtag
#SpiritofTravel. With most consumers glued
to their social media feeds during
lockdown, 
this helps the brand to stay top of mind,
repurposing old content while imbuing a
sense of escapism and wanderlust.  
Other LVMH Group brands are using social
media campaigns to allow consumers to
“escape differently” with branded content
inspired by “nomadic thinking” during the
coronavirus crisis. Rimowa asked Br and o n Maxwell T if f any & Co
Japanese designer Naoto Fukasawa to
transform its iconic aluminium suitcase
into a chair, “an invitation to rest, reflect
and dream of a radiant future”.
Tiffany & Co has also been sharing archive
imagery from past campaigns to drive
engagement. “In hopes of bringing some
joy and optimism to your feed, we’re
looking back on a few of our favourite
moments,” the brand wrote on Instagram.
Amid heightened fears and panic, brands
should look to spread positivity, quelling
people's anxiety by offering a source of
escapism and distraction. Republishing
old imagery is an easy win here, keeping
things fresh and helping fans to stay
engaged.  
Lo uis Vuit t o n
 Action Points
- The strongest brands to emerge from the
coronavirus crisis will be those who quickly
accelerate and strengthen their digital
capabilities, allowing them to leverage future
opportunities and protect their business from
potential risks. Livestreaming services,
omnichannel inventory capabilities and
social commerce are all key areas to invest
in.
- In luxury, consumers are the ultimate
shareholders. As we get more comfortable
with the new normal, luxury brands must
continue to deliver top-notch customer
service that adapts to the current reality.
Adopt today's winning strategies in the long
term to remain relevant and resilient once the
situation has stabilised.
- Foster a sense of community amid social
distancing, through engaging online editorial
content and virtual platforms that give one-
on-one attention to the top customers. Invest
in customer relationship management tools
that help keep up an ongoing dialogue with
key clients.
- Adopt an optimistic and positive tone of Get t y

voice for messaging that reassures and helps

people ease into a new norm in tense times.
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