Global Luxury Sales Fell 80%, Ten Years Of E-Commerce Transformation Difficult To Save Themselves?

Author Zhang Yi

The epidemic is sweeping the globe, and the essence of equality is immediately apparent. No matter how brilliant you are, it will eventually fall back to the ground.

Recently, Chanel, Hermes and Gucci have been discontinued, while LV has transformed the production of hand sanitizers. Under the global epidemic, the luxury market began to break off from the upstream end, and the supply chain was paralyzed. The funniest thing was that some of the original methods that had been applied to other industries, but were not effective in the luxury industry, such as live goods.

The trial results of LV in the small red book live room were not satisfactory. Not only did they not create a sales myth of "selling XX 10000 in one second", but they were "mockery" by consumers, as did other brands.

Some people believe that it may be in the current form, even if the domestic epidemic limits have been basically lifted, asymptomatic infections are still increasing frequently every day, people travel or masks are not separated, limiting the scope of action. Most importantly, China's luxury consumer is mostly young people, but the epidemic has made them aware of the risk of losing their jobs at any time, thus limiting their consumption. In addition, the retaliatory consumption after the outbreak did not appear, and for consumer luxury goods, the possibility was lower.

Of course, even if the epidemic is rampant, demand is still there. Besides, luxury goods belong to the impulsive consumption market. Luxury brands themselves will not be hit by a marketing failure. We need to know that LV's parent company LVMH has 17% of its revenue from China, and China is the fastest growing country in the world, so it is not easy to weaken the strategic layout in China.

Annual or no revenue under the tide of shutdown

It is a praiseworthy way for LV to switch to the production of hand sanitizer, just like a Chinese enterprise during the epidemic period. However, because it is a luxury, it seems to the public that there is a sense of "head down to the common people".

Imagine, as an ordinary person who has never used LV, who can hand wash her hand sanitizer with LV logo every day. However, the official announcement that this product is not for sale.

It may be that LV has seen through the public's "flirting" mentality. Letting the product free will eliminate the pleasure of "big brand booth price". In the final analysis, the face is retained, but it will make LV lose blood again. Is LV really needed to do so? Will the profits in the past few hundred years be completely depleted in a few months?

But the fact is, at a moment of doubt, Chanel is already halting production, and LV is still struggling.

According to incomplete statistics, Chanel has closed the production base of three countries in France, Italy and Switzerland, and Hermes has announced that it will temporarily close 42 factories in France until the end of March. Rolex shut down factories in Geneva, Bill and the company of Texas; Gucci announced the closure of its six factories in Tuscan and Markey, Italy.

However, although the tide of production stopped suddenly, the collapse of the frenzy is unlikely to happen. After all, the big card is still hard enough.

On the other hand, according to US officials, the epidemic will peak before and after Easter, until the death toll will gradually decrease in June, and some European countries have reached the peak. Taking Germany as an example, it is expected to cause a 5% economic downturn throughout the year.

In fact, from the end of 2019, the luxury industry began to decline gradually. In the first year of 2020, it was also affected by the epidemic. The major luxury brands were frustrated in the Chinese market.

Then, in March, the epidemic spread all over the world, sweeping all the physical brand chain stores. According to Bain Consulting's report, the loss of the entire luxury industry could reach 300 to 40 billion euros (about 307 billion 600 million yuan) in February this year, which means that the industry revenue will drop by about 15%, and the loss will be as high as 10 billion euros.

As a result, the luxury industry in 2020 will face a dismal sales volume throughout the year. Although many luxury brands have tried live shows and community grass planting in China, none of them has been effective. If this continues, the craze for a hundred years of luxury collapse may not happen.

At present, LVMH shares fell 3.68% to 401 euros, while Cayne group shares also fell 3.6%, while Hermes shares fell 4.3%. But even so, the loss is not at its lowest point, because the peak of the epidemic is just coming.

In addition to China, the global epidemic is going to improve. At least until June, the full recovery is in the second half of the year. After the economic recovery, it is not fast enough to rely on the speed of the store economy to achieve the increase in the sales volume of the enterprises. The store economy itself is limited by the scope of the traffic volume. Most of the forecasts suggest that the external luxury industry should cut through the electricity supplier field before opening the epidemic rapidly. Ask.

Loss of value in "going marketing"

Now that stores are slow to recover, will online measures be good? But is LV's first show failure, which proves that luxury goods are not available for live business?

Looking back at the debut of LV's little red book live broadcast, we saw an hour attracting only 15 thousand people. This data can be regarded as a failed product announcement in a big brand. In addition to the low number of people watching, LV was also angry with fans. Some netizens were directly tucking away to "dirt and slag" and "low to explode". In this way, the original LV's live broadcast can provide some reference for other luxury brands, but the unexpected failure directly raised the question of this way.

But even so, many professionals still think it will be a good thing to participate in the live broadcast of the electricity supplier. LV is not wrong in considering that the audience of Xiao Hong is more vertical. But if we can consider the professional matching degree of the anchor and maintain the image of "high-end" brand, we should set up better scenes to foil it, and maybe it will be satisfactory.

In addition, there are comments that the failure should be attributed more to the internal causes of LV. This broadcast "drowning" reveals that LV is always used to advertise on the large fashion show, but on the Internet, it lacks strength. The "high cold" attitude at ordinary times hinders their development to a certain extent.

It has to be said that brands like Hermes and LV still maintain the "no marketing" practice of high cold. The so-called "no marketing", most of the luxury brands to reflect the noble flavor of the product, artisan spirit, a hundred years of inheritance, extraordinary experience, the use of some secret tactics in the mind, in the minds of consumers to establish a lofty status, so do not take the general marketing promotion hand, let alone massive advertising.

Basically, they rely mainly on some soft means, such as:

Show the perfect skill of handcraft.

Developing hunger marketing for limited commodities;

Let customers understand the whole brand culture of luxury goods;

Each store's customer information is not shared with other stores.

There is no discount throughout the year.

And so on, everything can raise the psychological price of consumers.

However, the epidemic has destroyed all the trading channels under the line, and this "high forcing" marketing means directly exposes the fact that online transactions are underdeveloped. It also sends a warning signal on the side: the marketing way of "going to marketing" and "heavy line" is losing its value.

Luxury electric business how to make another fire?

Some people may ask, has luxury companies never thought of e-commerce? If the electricity business is developed before the outbreak, the loss today may be halved.

But reality is often magical.

As early as 2008, luxury electric providers had already launched a boom, such as treasure net, Shang pin, charm and so on. Even vip.com has been in the field of high-end luxury goods, but now some of them are no longer in existence, some are either bought or changed. Even at the end of 2019, there were still brands in the layout of luxury electric providers, but the fire did not burn up before the epidemic.

After more than 10 years of development, the luxury electric business is still no big improvement. The obstacle lies in the following factors: frequent fakes, heavy line experience, capital chain difficulties, and head business platform spoiler. But compared to difficulties, users have higher expectations.

According to McKinsey's "2019 China luxury report", 45% of respondents said that the electronic business platform was their preferred information channel. After 80 and 90, they were more dependent on the comments on the e-commerce platform, and 54% of respondents said they would refer to buyers' comments. McKinsey predicts that online luxury sales will increase by 2 to 3 times as of 2025, equivalent to 1/8 of China's 1 trillion and 200 billion yuan luxury market.

Such a huge market space has been delayed for ten years and no one can occupy it.

However, some big brands are careless when they are in the epidemic situation. It is inevitable that people will feel sad. No matter how good the business is, no one will change it. They will not have to wait until the crisis comes.

So what will the big brands take today?

In addition to the live broadcast of the first premise, we can see the new project launched by the interesting shop "Wanli Mu". Wanli aims to break the dual pattern of Tmall, Jingdong and brand self operated e-commerce by rebuilding the third party e-commerce platform focused on luxury goods, and immediately launched a ten billion subsidy discount.

It is understood that official subsidies up to 310 yuan per product, we must say that even for luxury goods, price reduction is still very effective, subsidies war directly stimulated the number of two consumption of the platform.

Wanlibo is famous for its "supply chain direct to kill fakes" mode, mainly through the support of tracing identification, which can be done by means of commodity sources, ports, warehouses and so on. Buyers can even see the information of purchase invoices and order records directly to ensure 100% authentic products, which is very rare in the luxury industry.

In addition, Wanli also plays a membership system, including three member levels, including "founding member", "black card member" and "ordinary member", and has paid a sum of money for a black card member. The registration can get 2 million yuan, equivalent to 200 yuan, and no threshold is available when placing the order.

These models seem to have no difference from the electronic business platform of the past ten years. The discount marketing mode and membership system have never been pioneered, and the supply chain has always been the topic of the electronic commerce platform and manufacturers.

I have to say that it is true. In the past ten years, luxury goods providers can not do that. Wanli is just "integrated" to make it do it again, and to make it the best, but this is probably the most important thing that luxury electric providers need to do after the epidemic.

In fact, the advantages of coming down will be greater than that of the past, because online trading has become the way consumers are accustomed to it. People's trust in the platform is more profound. What's more, the epidemic has given the branding side a blow. They have changed some prejudices against the electricity supplier, and many of the processes with high transaction costs can now be omitted, and only when these are used. When the restrictions are eliminated, luxury goods providers can achieve this high transparency.