Will consumers’ behaviour change when the world recovers from the coronavirus pandemic? After being confined to their homes or losing work we think Western shoppers may adopt a wait-and-see attitude and ask more questions about luxury but China’s appetite for premium products could be largely unscathed.

Chinese consumers accounted for up to 40 per cent of luxury sales before the pandemic. But Mainland China addressed the crisis quickly and sales are stabilising as stores re-open. Lockdowns meant online orders have outperformed bricks-and-mortar sales in Western countries this year, but longer-term, internet shopping is not a channel for selling luxury.

Consolidation of luxury-goods companies seems bound to accelerate. When the dust settles, we expect pent-up demand to favour the bigger brands, and the large groups’ balance sheets will allow them to buy independent firms whose values have been hit.

Conscience is likely to be heightened by the pandemic, however, as consumers become more thoughtful about their choices. They may buy less but buy better. This conscience boost may be more visible in the West, which had higher mortalities and longer quarantines than China.

The behaviour of both luxury companies and consumers is likely to change. How businesses responded to the pandemic – including whether to pay dividends during the crisis – has become a social issue for customers and investors.

The raised conscience factor will help ESG matters – environment, social and governance – become mainstream more quickly. Sustainability little influenced luxury sales before coronavirus but manufacturers and retailers of premium brands would be wise to anticipate the ESG trend.

Younger people are more aware of environmental and social issues and are becoming increasingly important global consumers, willingly spending more on green products, including sustainably sourced and produced fashion.

People paying a high price expect products to be manufactured in the most sustainable way and companies should expect increased scrutiny from consumers and investors.

Another consequence of heightened conscience will be a boost to substitute materials such as fake fur, laboratory-grown diamonds, organic cotton and vegan leather. But can luxury companies continue charging their current prices? Using top-quality, scarce materials may justify high prices, but consumers may expect lower premiums for synthetic materials.

Conscience is also fuelling luxury-clothing rental platforms and second-hand luxury shops that allow consumers to resell products such as handbags, accessories, apparel and watches.

The luxury sector can thus play a part in the growing ‘circular economy’, where sharing and re-use are prioritised over ownership, consumption and disposal. The Green Deal being promoted by the EU will include a right-to-return law that gives consumers access to repair services and the circular economy is covered already in China’s Five-Year Growth Plan.

The shift towards a more circular economy allows companies to rethink waste policies that currently see many products end up in landfill. Fashion firms have been criticised for destroying unsold stock rather than sell cheaply. Collection services could allow re-use of components, and so reduce waste, including plastic pollution.

First published 2 April 2020.

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