Many Luxury Brands Shouldn’t Panic About 2022. They Should Be In Shock
Across all categories, the luxury industry is undergoing its most significant transformation ever — and many brands have not even noticed it. Much like the rude awakening that Kodak faced when digital cameras took off, many luxury brands are still far too reliant on their existing business models, as they sorely underestimate the speed of change.
It would be easy for me to write a comforting end-of-year column to please readers, assuaging them with what they would prefer to hear. But here, I have chosen to address the elephant in the room, as it is the only way brands can successfully prepare for their futures.
So, why is 2022 so critical for luxury brands? As we know, 2020 sent the luxury industry into a nosedive. And if it wasn’t for China, many more brands would have collapsed entirely. It was a painful year for the industry, with some brands experiencing high double-digit negatives in revenue and profit. The luxury market in Europe had its biggest decline in history, and important North American markets suffered significantly, especially in the first two quarters of 2020.
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