The fashion industry is facing its most challenging year. It’s no surprise given the craziness of 2020 that luxury brands are among the most substantially impacted. Drama abounds!
LVMH is currently in a lawsuit against Tiffany’s after backing out of their $16 billion sale agreement. This summer several brands declared bankruptcy, including Brooks Brothers; the oldest retail brand in the United States which was founded in 1818. Last year we saw the closure of luxury department store Barney and this year followed with the closure of Lord and Taylor, and the bankruptcy of Neiman Marcus.
In a recent episode of The Fast Traack Podcast, luxury marketing consultant, Rachel Clay reminded us that heritage brands have weathered many storms in their long history and usually find a way to come out the other side stronger. But will they be able to find their footing as the global pandemic forces a reckoning, long time coming, on this industry?
In our 2020 State of Influence Report, we compared influencer data from H1 of 2019 and H1 of 2020. In it, the two fashion categories that showed the steepest decrease in activations and engagements were Luxury and Businesswear. Luxury saw a 24% decrease in active influencers, and a 50% decrease in engagements on posts mentioning luxury brands. While every other category saw an increase in video views (due to the rise of TikTok), Luxury brands saw a 35% decrease. For comparison, activewear saw a 663% increase in video views.
Luxury brands’ most popular products tend to be accessories, and most people aren’t wearing heels or sporting handbags in their commutes from bedroom to home office.
The lack of interest in luxury also speaks to an uncertain economic future; when the markets are difficult to predict, people are less likely to spend their money on investment pieces. Influencers are also hyper aware of appearing out-of-touch with their audiences and getting “canceled” as a result of flaunting their luxury goods.
With that said, there are some luxury product launches that appear to be doing well despite economic turbulence. For example, Dior’s recent launch of the Bobby Bag has seen traction with influencers and their audiences, outpacing even Louis Vuitton’s Pont Neuf launch.
Many people assumed that this would improve after virtual fashion week this past month, but though there has undoubtedly been a bump, it’s uncertain now if that’s sustainable.
The brand that saw the most significant activity bump was Chanel on October 6th, followed by Louis Vuitton (LV) who held their show the same day. Though LV activated only half the number of influencers as Chanel, they chose smart partnerships including Gen-Z superstar Emma Chamberlin and AIC founder Chriselle Lim.
Based on comments and engagements, the general feeling is that the Internet is not interested in seeing tweed party dresses at the moment. The social collective also noticed the lack of masks, pointing out that many designers failed to include masks in their shows and perhaps solidifiingthe point that luxury may be out of touch.
Should we be concerned? I wouldn’t panic quite yet. Luxury and heritage brands are resilient. They have survived world wars and economic crises in the past. Simply put, with the unemployment rate being higher than average and the future of the United States completely uncertain; it’s just not a moment in history where people are celebrating milestones with a new pair of shoes or a handbag.
So what can luxury brands be doing now to prepare for the future?
So, is luxury dead? Although luxury is going through a rough patch right now in this uncertain economic climate, most heritage brands are likely to continue their legacies. However, even though there will always be a place for luxury, their role could be starting to shift. Buyers are making it clear at every level of the economic scale that they want to see brands with purpose. Perhaps this is the next iteration of luxuries adaptable nature?
If you’d like to learn more about how global brands are putting brand purpose at the heart of their company, listen to our discussion with Dove. You can also download our State of Influence 2020 report for more insights into the evolution of influencer content during these #unprecedented times.