April 22, 2020
By DIANNA DILWORTH
As countries in Western Europe begin to loosen restrictions and even New York is seeing its curve flatten, luxury brands are beginning to wonder what is next after the COVID-19 crisis flooded through the world last month.
But as brands consider the early phases of recovery, Fred Reffsin, president of Brandgrowth, New York, warns against any and all “we’re back” messages. “It’s not like they were away on vacation,” he said. “For the short term at least, brands should take a low-key approach, be authentic, genuine and empathetic.”
Another longtime industry observer recommends the same cautious tack.
“It’s not a matter of ‘we’re back,'” said Marie Driscoll, managing director of luxury and fashion at Coresight Research, New York. “It’s ‘we’re here for you and with you.'”
Since the crisis took hold, luxury brands were gentle with messaging about soothing. LVMH and Kering turned perfume factories into temporary hand sanitizer production lines to help hospitals and sewing rooms into mask making factories. Chanel promoted soothing calmness through its soaps and bath gels. Dior focused on its heritage with a campaign that focused on its recent Designer of Dreams art exhibit. The brand’s fragrance played up the organic floral sources of J’Adore in its campaign. Department stores, pummeled by massive drops in sales and a bleak outlook with stores closed unforeseeably, have turned to deep discounts in an attempt to keep the lights on.
Mr. Reffsin said that as brands look for a way forward, they should avoid discounting merchandise, which could lower the value of the items in the long term. “Don’t try to buy back the business with big discounts,” he said. “Avoid off-price channels. Don’t believe in or rely on revenge spending. It’s wishful thinking. Avoid knee-jerk reactions to short-term problems or one bad review.”
Luxury brands should use social media, their Web sites and their associates, and reach out to their clients and deepen relationships of trust during this difficult time. “Sharing stories of getting by and finding the inner strength to get to post-COVID with friends and family will resonate with consumers looking for a copying playbook,” Ms. Driscoll said. “Right now, it’s important that a brand provide more meaning to consumers than a transaction.
“Share purpose and values,” she said. “Share a connection and your clients will want to buy a product to hold on to positive feeling the connection creates.”
As the restrictions loosen, the world will not be the same as before it shut down.
The length and depth of a recession will slow the comeback of luxury and aspirational shoppers. “With international travel likely impacted through 2020, luxury brands will likely see sales declines in global flagship cities such as New York, Paris, London, Rome,” Ms. Driscoll said. “The next leg of growth for luxury will come from better clienteling and personalized offerings.” As brands do send out marketing communications, they should try to keep it relevant by adopting personalized marketing strategies. Most brands have accumulated treasure troves of data about their customers and should use this information to communicate and should focus on targeted, personal and relevant channels.
“If they haven’t done so already it is critical to invest in their ecommerce platforms and customer experience,” Mr. Reffsin said. “They should not rely on traditional retail channels to revive their business, as no one knows who will survive or what they will look like if they do,” he said. “This will involve rethinking their business models and some tough decision making.”
Return to branding
So, what should brands do next? Avoid transactional messaging. A focus on branding is more important than ever. Questions to ask: Who you we and what are our brand values?
“Let the customer see a little of themselves in your messaging,” Mr. Reffsin said. “A little feel-good will go a long way. “Also, while content has always been key, brands should be looking at content that is more engaging, giving people new reasons to buy,” he said. There will likely be a shift in what people buy based on their post-crisis priorities. Also, the frequency of purchases and reorders will likely change.
“Customers will come back, but there will be a shift in how customers make their purchase decisions,” Mr. Reffsin said. “Images and language need to reflect the new reality whatever that may be. “Brands should be prepared for sales to take a long time to recover,” he said. “Historically speaking, brands that invest in marketing during a recession made stronger comebacks than those that hid or reduced spending. This recession is very different, touching every aspect of the business.”