From Digitized Flagship Stores to Cutter-Controlled Robots: What Luxury Looks Like in a Post-Pandemic World The luxury industry had to rethink the way it did business during the pandemic, and the new models are likely here to stay.

It's never easy to sell a ring or watch worth hundreds of thousands of dollars, and people willing to spend this much money on accessories are a tough crowd to please. When it comes to luxury sales, you have to go the extra mile. You have to wow your customers at shows and fairs, where they can try your masterpieces on or see them in motion, and it goes without saying that your brick-and-mortar boutiques must be more than mere retail outlets. Luxury is always social and tangible, hardly positive qualities during the pandemic. The virus hit the industry where it hurt — and hurt it did.

In the year before the pandemic, the luxury industry fared quite well in terms of its sales, enjoying sustained growth, mostly thanks to China and its growing upper and middle classes.Then came 2020, and as countries closed their borders, tourism vanished overnight, with the tailor shops of London's Savile Row and Rome's fashion boutiques standing empty. The pandemic prompted many to review their shopping lists, and it's safe to say luxury wasn't the priority.

The results were devastating. In 2020, the luxury market plummeted by as much as 23 percent — its worst blow on record, Bain & Company reports, and the first contraction in years. The silver linings included China's appetite for luxury, not quelled even by the virus, and soaring digital sales reported by top groups, such as Richemont, Louis Vuitton and Hermes, a reward for the brands that moved ahead of the curve to bring their operations into the digital world.

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Navigating new digital spaces

Watchmakers have moved onto the web, with luxury houses like Chopard and IWC Schaffhausen setting up one-brand online stores. Even two of the industry's three titans, Patek Phillippe and Audemars Piguet, moved toward e-commerce via, respectively, a temporary online sales blessing for authorized retailers and a deal with Net-a-Porter. Haute jewelry followed suit, including high-end maisons like Bvlgari and Cartier, and similar trends could be seen in other sectors of the luxury market.

The conundrum luxury brands faced, however, went beyond their relative reluctance to embrace e-commerce. The tangibility of the luxury experience transformed into a challenge for an industry that cherishes its glamor and splendor, as besides its brick-and-mortar bastions, Covid-19 affected events — another key promotional tool. Baselworld and Watches and Wonders, the signature annual watchmaking fairs, were shuttered in 2020, with the latter opting for a digital show instead. The same fate befell the July fashion weeks in Paris, albeit in the fall, the show was back on the road, now only open for visitors online. The Geneva International Motor Show, focused on premium vehicles, also fell prey to the virus.

The push toward digital outreach already existed, but it was during the pandemic that more luxury brands shifted their tightened marketing budgets toward digital channels. And as the world slowly emerges from lockdowns and states of emergency, other trends, such as the growing focus on "digital native" generation consumers, making up for about 50 percent of China's luxury sales, suggest that the embrace of the digital is here to stay. This reality poses brands a curious question: How do you bring tangibility of the luxury experience to an online medium?

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Sticking to old guns — in new ways

Exploring a new high-tech world, a multitude of brands came up with appropriately creative answers to the problem before them. With events scrapped or moving into the digital realm, brands delved into social media, displaying new collections on Instagram and Snapchat. Many dabbled in augmented reality as well, utilizing the platforms' AR filters to let users try on a variety of products, such as Dior sunglasses or Gucci sneakers, with the option to shop on the go — an approach that seeks to mimic the physical shopping experience as much as possible. Bvlgari deployed a similar try-on tool in an exclusive invitation-only app it built to launch its Barocko collection.

Curiously, some brands also found success maintaining contacts with their high-end customers on LinkedIn. The social network offers a robust toolset to marketers via its partner program, teaming up with multiple platforms, such as Paragone.ai, which helps brands keep track of their campaigns across multiple channels. The company leverages predictive AI to gauge the prospects of upcoming outreach efforts and optimize brands' outbound marketing. Paragone services brands in a range of industries, but its luxury clients in particular enjoy LinkedIn's esteemed reputation for luxury products. As luxury brands continue to go digital, we can expect such tools to become increasingly prevalent across other platforms too.

Many companies came up with solutions that were even less orthodox and put a new twist on the in-store experience and exclusivity, the core components of their offer, translating those into the language of the new channels. This very much goes for IWC Schaffhausen, which digitized its flagship store in Singapore's iconic ION Orchard mall with 360-degree imagery to turn it into a digital shop that the customer can explore on his or her own or with a client advisor. The client can also place an order on any watches he or she desires or set up an appointment, whether online or in a boutique of choice, to explore the model in person.

Other brands chose to digitize the dressing rooms, using augmented-reality tools to let their customers try on a range of luxury items and accessories, such as Off-White sneakers or Kendra Scott earrings. The Savile Row went even further, tapping into telemetrics to transcend the closed borders with the help of Mr. Hammick, a simple robot used by the Huntsman brand for fitting sessions, guided remotely by an experienced cutter.

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Now, as many countries begin to recover from the pandemic, it seems that luxury's expansion into digital realms is here to stay — and that digital natives and non-natives alike, increasingly accustomed to the convenience such technologies provide, will continue to fuel an innovative digital-marketing era.