Luxury convalescence: fast-forwarding
In this particular context, MAD undertook a detailed report on the post Covid-19 strategic challenges Luxury Maisons are facing.
The first part of our report “2020 – Managing the unmanageable, from economic shakedown to reinvented clients”, released on May 19th, shared the impacts of the current crisis and the financial profile of 2020 for the Luxury Maisons. It also identified the acceleration of four existing trends shaping the new rules of the game for the whole Industry: the growth of the Chinese domestic Luxury market, the need to reclaim local customers, the rise of the “No-Channel” and the urge for an impactful Brand Purpose.
In the second part published on June 3rd, we analyzed two very different categories, at both ends of the Luxury Industry spectrum, yet a source of mutual inspiration – “Category matters: from Watches & Jewelry to Beauty”. Two industries whose Business Model is still strongly based on Wholesale, and where “Direct-To-Consumer” strategies are crucial.
We continued our journey through the “Luxury world” in the third part published on June 19th, focusing on three specific sectors – “Category matters: Fashion & Accessories, Travel Retail and Wine & Spirits”.
Part 4 – Organization: talents, structure, process and governance
Luxury, maybe to a greater extent than other industries, relies on its talents. Therefore, its future depends on the ability of the sector’s Maisons to adapt their organization, governance and culture.
In this closing chapter of the study, we outline the major organizational changes in terms of geographies, outsourcing models and staff growth, taking into account the players’ size and shareholding models.
To face the post Covid-19 period, Maisons will have to reflect upon their digital transformation, the restructuring of their European distribution network, the review of sales teams remuneration and collaboration schemes and the opportunities leveraged by remote working.
In addition, the acceleration of the trends previously identified in the first part should question the fundamentals of Maisons’ culture and their organizational models.
In order to emerge victorious from the crisis, some sectors will have to seize the opportunity of these new organizational challenges to implement fundamental rather than incremental changes.