Will consumers be quick to return to stores and will their purchasing habits be the same in the COVID-19 world? I was recently part of the Retail Rundown podcast along with Anne Beall where we discussed luxury retailer Valentino suing its landlord to get out of its 5th Avenue lease and what this means for the future of luxury brands.
Anne provided some interesting insights from her research that showed 46% of Americans were looking to treat themselves to something nice, while 26% said they were buying things during the pandemic to feel good. The intent to purchase is there but luxury brands need to do a better job presenting their goods as an investment piece according to Anne.
I’ve noticed that apparel sales have been struggling for some time now and you can see this when visiting your local mall where fashion-based retail shops have dropped from 70-75% to 30-35% of leasable space. Many luxury retailers have been hit harder as very few of them have been able to pivot to meet the needs and wants of millennials, Gucci being a great exception. International luxury consumers not able to visit anytime soon just adds to the list of growing concerns for many luxury brands.
On the other hand, second-hand shopping or re-commerce is on an upwards trajectory. For Gen Z there is no stigma around buying second-hand and you can see this in the booming second-hand sneaker business. Anne also believes this category will continue to grow fueled by the young generation.
Sticking with Gen Z, Anne spoke on how they are value-driven and focused on causes. They aren’t concerned with the price, rather make purchases based on what companies are doing. I personally think price isn’t a factor for them because they still live at home with their parents.
During the podcast, we also spoke about Amazon, technology, and future trends in the retail space. You can listen to the entire podcast here.
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