Most of us assume that businesses in the luxury industry always have backup plans for everything. Do these plans actually cover semi-apocalyptic scenarios like the one we are witnessing today with the Covid-19 outbreak that’s putting the whole world in a coronavirus lockdown?

By Patricia Issa
While this is being written, the global aviation sector is losing track of its losses; the financial markets are in a free fall; equity is being devalued, while a few governments have already chosen to save the people and bankrupt the economy, and others are planning to resume the work within a week or two.

In the luxury industry, the crisis's ripple effect will be substantial and will likely take several quarters of hard work to begin to balance out. Not impossible, as long as lives are being saved and the world can soon put this experience behind it.

Here are 5 ways the luxury industry is expected to experience the post-crisis phase:

1- The digital business model is accelerating to the top, along with all minimal intervention trends: with social distancing being the new norm during the outbreak, and probably for a few months afterwards, luxury retailers are jumping online to make up for the lost revenue from their brick and mortar shops. The current shift toward e-commerce will accelerate the digital transformation of the luxury industry as a whole.

2- Companies are reconsidering outsourced production and might be relocating to their countries of origin: the moment the lockdown was imposed in China, every single luxury brand outsourcing its production to the Chinese mainland had its business chain completely frozen. The loss of control over the business is prompting many luxury manufacturers to reconsider their outsourced operations in favour of local production.

3- Luxury services are becoming even more private: Providers of luxury and lifestyle management services are considering a significant shift toward minimal human intervention in service delivery. This particular branch of the luxury industry will soon be managed by seasoned lifestyle managers, making human intervention and contact in service execution almost seamless.

4- The market for luxury suppliers is being filtered: with 43 billion dollars of revenue expected to be completely wiped out from the luxury industry over the next two quarters, only solid businesses will be able to balance out the losses within 2 to 4 quarters. The market will filter out competition, while windows of opportunity will close in the face of direct competition, and open for newcomers delivering value and innovation.

5- New openings in the industry will be for value-based luxuries and sustainable business models: The COVID-19 global crisis is introducing a new model of consumer behaviour, redirecting focus to value for money and sustainability. This is why great opportunities and a larger market share will be available to luxury suppliers who introduce these values into their businesses, and to newcomers whose businesses are focused on delivering value alongside brand prestige and a sustainable business model.

The luxury industry post-COVID-19 will not be the same, and we have yet to observe consumer behaviour to draw the full picture.

Patricia Issa is an entrepreneur and Lebanese influencer with a passion to share.