Recently, in view of the worsening epidemic, Italian luxury brand Giorgio Armani cancelled the Emporio Armani and Giorgio Armani fashion shows scheduled for January 15 and 17 in Milan.
Two years ago, Giorgio Armani was the first luxury brand to cancel its fashion show due to the pandemic. Today, cross-border gatherings are still difficult.
According to the State of Fashion Report 2022 released by McKinsey & Company and Fashion Business, international tourism will not fully recover until 2023-2024, and many luxury users will still have to wait for overseas shopping trips that "travel for cheap".
The State of Fashion Report 2022 (the "Report") presents a vision of the most important trends that will shape the fashion industry over the next twelve months. It highlights the importance of "home markets": with the dynamic shift between travel and luxury shopping, high-end brands need to reformulate new strategies to attract close shoppers and long-term inbound tourism, "In order to grasp the shift in shopping patterns in the coming year, luxury companies should interact more deeply with local consumers in different regions and rebalance their global retail footprint." ”
In Bicester Shanghai, Giorgio Armani became the first brand to be presented in the "Shangshe Space", where the combination of products creates a photo space to meet the needs of many users to punch in and take photos on social media platforms.
Prior to the COVID-19 pandemic, Bicester Village in the UK was one of the main attractions for international visitors to China. Today, these customers are turning to discounted shopping malls in the country.
Despite the growing importance of online sales, the Report shows that the majority of young Chinese consumers prefer face-to-face interaction with brand store salespeople when making purchasing decisions, so brands need to see the store as their media channel, reimagining the in-store experience and catering to young consumers' desire to be different and valued. This winter, Tod's, Coach, Kenzo and other fashion brands held a VIP salon and exclusive sale in Bicester Suzhou, where consumers can taste new products for the first time, as well as blind box wall interaction and other experiences.
In the past two years, European luxury sales have been hit by the return of consumption in China and other regions, and luxury retailers including Harvey Nichols in the United Kingdom and Galeries Lafayette in France are struggling to adapt to the changing environment, and in addition to expanding their e-commerce business, they also continue to enhance their localization strategies to attract customers. Galeries Lafayette has also accelerated its business deployment in China, signing an agreement in Shenzhen to open a new department store and planning to open a soft opening at the end of the fourth quarter of 2022.
Under travel restrictions, the free zone policy is more encouraging for luxury shoppers to spend domestically. The report predicts that by 2025, Hainan Province's overall duty-free sales performance will account for one-third of China's luxury goods market.
On January 1, the Consumption Department of the Department of Commerce of Hainan Province announced that the total sales of 10 outlying island duty-free shops in Hainan in 2021 will be 60.173 billion yuan, an increase of 84% year-on-year. Its duty-free shopping number was 9.6766 million, an increase of 73% year-on-year.
China's booming duty-free market is both an opportunity and a new challenge for luxury brands.
Going forward, the report argues that consumers may begin to travel internationally cautiously, but most likely, "luxury consumers will buy more innovative local designs abroad, while continuing to buy affordable luxury and local brands in the domestic market." ”
To address these dynamics, travel retail and duty-free businesses will need to expand their horizons and offer travelers more combinations of goods than usual, such as unique local products or partnerships, to enrich the customer experience and go beyond simple duty-free offers.