Just like many other sectors, the luxury goods market too has been severely impacted due to the Covid-19 pandemic and multiple lockdowns. On the bright side though, the present scenario has pushed the market towards change and transformation.
With a decrease in discretionary spending in the past year, the industry is on the path of reinvention —realigning its focus on resilient products and D2C channels.
There is a fundamental shift in what ‘luxury’ means, as consumers have become more environmentally and socially aware. Digital channels have become even more important platforms for leading such inspiration and sales, said the spokesperson from Tata Consumer Products.
He said brands whose products are perceived to be authentic and have strong trust equity have not been affected much and continue to be in demand.
In line with insight, the brand has stepped up its focus on premium products. Two of its recent launches are in the direct-to-consumer (D2C) channel in the premium beverages space.
Tata Tea 1868 is a luxury tea range and Sonnets by Tata Coffee is a premium roast and ground coffee range. It has recently launched the Eight O' Clock Coffee, an American coffee brand, through the D2C channel.
In terms of overall impact of Covid-19 on the industry, Dipu Mehta, Managing Director, Orra, said growth in the luxury categories depends on the segments too.
For example, jewellery is still seen as an essential purchase even though it is in the luxury segment and, hence, consumer sentiment hasn’t changed much. The ticket size has come down slightly, though.
Orra’s focus has been its value offerings to customers who desire to buy diamond jewellery but are more value conscious. It is the only jewellery brand to offer a 0% interest EMI facility on diamond jewellery in India.
Coming to the FMCG industry, the sector has seen a steady rise. Luxury food and beverages, though limited, too have seen a silver lining with consumers investing more on healthy, sustainable and indigenous products, the spokesperson from Tata Consumer Product said.
Apart from this, as a strategy to recoup, a lot of luxury cosmetic brands have launched smaller economical packages of their high-end products to stay relevant amid the crisis.
Tata Consumer Products on its part aims to stay mindful of its consumers' taste preferences and demands in these challenging times.
These brands have also tweaked their marketing strategy, which is now more inclined towards digital.
The new normal has created a push, enabling brands and consumers to be more active on digital platforms, the spokesperson from Tata Consumer Product said.
“There is value that we bring by way of our brand legacy and expertise. In line with this, we have been stepping up our focus on D2C to build premium brands, with an ability to cater to consumers who lean towards premium taste and offerings,” he said.
Going forward, digital will continue to be a key element of the marketing mix for most of its national brands.
Ranging from logistical disruptions to raw material inflation, every business faced some or the other challenge amid the pandemic.
If brands want to remain relevant in these times, they need to focus on driving customer experience and value with a high focus on technology to drive convenience and safety, Mehta said.
Orra is still witnessing a decent growth in the past year and is consciously expanding its footprint in the Indian market.
While its ad spends have not been increased, Mehta said there is a stronger focus on digital to reach out to its target customers.