The Luxury Industry Is Facing "Ice": Shutting Down Shops And Shutting Down Big Show.

The new crowned pneumonia epidemic "black swan" has created a strong storm worldwide, and the retail industry has become a major disaster area. Luxury brands such as Italy, France and other European countries are at the epicentre of the outbreak.

By the time of 12 March 19th, 89965 cases were confirmed in Europe, and the number of confirmed cases in Italy was as high as 35713.

On the one hand is a sharp drop in global consumer demand, the other is the production base camp hit by the epidemic, the luxury industry is shutting down production.

　 1. Europe's "stronghold" falls and the major fashion week stops.

Local time March 18th, Chanel, the "luxury goods originator", said in a statement that it would temporarily close all production bases in France, Switzerland and Italy for two weeks.

Less than three days ago, Herm s announced that it would close all production bases in France, involving about 40 manufacturers and tanneries until March 30th. In March 16th, Axel Dumas, chief executive of Hermes, wrote to group employees: "according to the government's request, we have closed all stores in France and some other European countries."

Gucci (Gucci) has also closed its factory in Tuscany and Markey, Italy, and said that the closure period may be extended due to the continuous escalation of the epidemic and blockade.

Before the closure of the main stores, the production base was shut down, and the "stop production statement" issued by the luxury brands of the head can be regarded as the vane of the luxury industry entering the "ice age".

It is obvious that the impact of the epidemic has spilled over the retail sector of the luxury goods industry, hitting the supply side. Italy, France, Switzerland and other countries, which have always been regarded as the "stronghold" of luxury brands, are in the critical period of epidemic prevention and control.

And behind the wave of stop production is actually a chain reaction of sharp decline in market demand.

According to Reuters, some textile and leather products suppliers in Italy said that the number of luxury brands such as Gucci (Gucci), Prada (Prada) and Ferragamo (Salvatore Ferragamo) decreased significantly, and some luxury brands even halved orders.

Among them, suppliers of Kai Yun group revealed that Gucci (Gucci) handbag orders in February were cut short than January, and March orders were zero. LVMH suppliers also said Louis Vuitton handbags orders fell by 30%.

Not only stores and production bases have been suspended, but the major fashion shows have also stepped down.

Chanel (CHANEL) recently announced the cancellation of its May 7th holiday Series in Italy, Carle, and said it is looking for a more suitable time and way to restart the holiday show in Carle's skin. Prior to this, Chanel has announced that it will postpone the postponed exhibition of the advanced handmade workshop which was originally scheduled for June 4th in London, England.

Herm s also cancelled the 2021 early spring holiday show scheduled to be held in London in April 28th, and the Hermes equestrian competition to be held in Paris. In addition, the Dior and Jordon joint venture series Global lottery sale is also forced to stop.

At present, epidemic prevention measures in European countries continue to escalate. Under the overall blockade, the production, marketing and retail sectors of the luxury industry are encountering a "bone shaking" impact. According to previous reports from bein consulting, sales of luxury goods this year will probably be 30 to 40 billion euros in February. It is worth noting that this data is only predicted in Italy and other countries before announcing the "closure of the city". This figure will obviously be expanded under the further impact of the epidemic.

The capital market is gloomy. According to fashion news, Europe's four largest luxury goods group evaporated 35 billion 200 million euros (271 billion 200 million yuan) in the last week of February, and the total market value of LVMH group has shrunk by about 67 billion 700 million euros (about 515 billion yuan) from 2020.

　　 2. Online retail "cloud show" became popular

Under the epidemic situation, "cloud" ends will undoubtedly become the main battlefield of the retail field.

In fact, for some luxury brands with huge volume, transformation is not easy. And for a long time, luxury brands come with "high-end customization" labels, adhering to a core concept - brand value, including store design, service, etc., digitalization may weaken consumers' experience, resulting in incomplete brand value.

LVMH, the largest luxury goods group in France, is the representative of "online transformation prudent faction". Its online sales LVMH group's brand is almost exclusively sold through official websites.

Bernard Arnott, chief executive of LVMH group, has publicly stated that excessive reliance on online sales will undermine the reputation of the group's luxury brands, and be cautious when investing in digital technology. Nevertheless, LVMH group is also conducting small-scale water trial online.

Now the offline business has no choice but to stop. For many brands, it is imminent to get through online business.

In March 20th, Prada (Prada) group's core brand Prada officially opened shop in Tmall, and another MiuMiu Tmall flagship store will also open in the near future. Unlike previous sales and inventory methods, Prada (Prada) started a new product online.

According to reports, at the beginning of the year, the KENZO under the LV group also officially landed on Tmall, becoming the first luxury brand of fashion and leather goods that Tmall set up shop in Tmall. In February 24th, Prada also moved to open Tmall flagship store on line, and Cartire entered the Tmall with all kinds of products.

Now it seems that the offline experience as a "soul" luxury industry, is also gradually compromised, moving online retail.

The industry is generally optimistic about the retaliatory consumption after the outbreak. Nelson, a well-known research institute, recently released a report that 67% of retailers said they would vigorously expand online channels. Under the big exam, the retail industry is also brewing changes and opportunities.

Industry analysts pointed out: this may be an industry shuffling opportunities. The importance of online markets has never been so clear. Reuter Communications, a public relations consultancy, pointed out in its latest report that "although it is not the opportune time for luxury brands to actively promote, it is an opportune time to take an active part in it."

In addition, many cancelled offline fashion shows have been moved to online, and cloud show has gradually entered the consumer's perspective.

In February 24th, the DIOR autumn winter clothing show adopted the interactive way of micro-blog online topic page "cloud live broadcast". This fashion show that no buyers, no fashion bloggers and no media at the scene had a good exposure. Giorgio Armani's 2020 autumn winter Milan fashion show is also incarnated as "cloud show". The show did not show guests at the scene.

Not only is the micro-blog platform, but many large joint Tencent videos have been broadcast live to over 30 top shows.

According to LADYMAX data, Milan's fashion week in Tencent video shows a total of 16 million viewing volume. Among them, Gucci, Ports 1961, Fendi and Giorgio Armani five major brands show more than 1 million live viewers, and the most popular demand shows are Gucci, Prada and Ports 1961, which are far more than Instagram and other international social media platforms.

A clear fact is that after breaking the restriction of "show show" and "invitation system", the audience of fashion show is sinking. In the past, the fashion show, which belongs to the high-end small circles, is a far fetched high-end fashion week for ordinary consumers. Now it has established a closer relationship through the social media and network platform audience and consumers.

Under the spread of the epidemic, when the luxury industry will resume is still unknown, and the "cloud" end appears to be "unintentional", but the sense of crisis brought by the epidemic seems to be forcing the digital transformation of the luxury industry.