The luxury sector sees the relaunch in 2021. After a year of Covid-19, the sector returns to grow globally, driven by Chinese and American demand and the boom in e-commerce. To break the news, which sees the first three months in line with the pre-covid values, are theAltagamma Consensus 2021 and the last one Altagamma Bain Monitor on World Markets, realized by Bain & Company and high gamma.
The trend in consumption in 2021 was revised upwards on the 2020 and should go up in double digits (+ 18 %), but will likely still be in decline compared to 2019. The general uncertainty and the variables related to vaccination campaigns and the slow recovery of tourism do not allow a precise estimate, the report explains.
“Thanks to their reactivity and resourcefulness, in the annus horribilis 2020 the high-end companies worked not only to contain the damage, but also to immediately build the foundations for the recovery. The first signs of the year are very positive: investments in digital and the rationalization of their management and business models are bearing fruit and our companies can already look to the near future with moderate optimism ", comments the President di high gamma, Matteo Lunelli.
The focus of the recovery are China e Usa, while the 'Europe proceeds more slowly. Clothing, which suffered last year, is expected to recover strongly, led by 'revenge spending'; jewels hold, by virtue of their safe-haven profile; among the accessories good leather goods and cosmetics thanks to the performance of skin care. Distribution channels have been remodeled, increasingly omnichannel, as well as the media ecosystem and product innovation: online dominates - which is estimated to affect more than 85% of luxury purchases in the year.
“EBITDA reached + 30%, driven by domestic consumption, especially Chinese and American ones, and by the explosion of online sales, whose share of the total is estimated to rise from 23% to 30%. The resumption of travel will not be relevant for 2021 and travel retail will continue to suffer, while physical retail holds. The performance of the brands improved, which, due to their size and financial capacity, were able to invest in digitalisation as well as in greater control of pricing, in a fluid and constantly evolving distribution ecosystem ", he explains. Stefania Lazzaroni, General Manager of high gamma.
Despite the positive trend in the first quarter of the year, which returned to growth of 0-1% compared to the same period of 2019, the trajectory of the market is still uncertain, which this year could already catch up with pre-covid levels for a value from 280-295 billion (+ 0-5% on 2019).
"Due to the crisis, luxury brands have been forced to unhinge the traditional rules of the game and innovate rapidly," he said. Federica Levato, Partner of Bain & Company and co-author of the study, “As we return to a normal life, consumers expect a 'human', but technologically enabled, relationship from brands. The winners will be those who remain in close contact with the trends that are shaping the new normal lifestyle - all this while still managing to differentiate themselves and create a narrative that is faithful to their culture ”.
