Agility’s Outlook for 2021: the Future Looks Promising

Insights gathered from our work with premium brands across many luxury categories in global markets, as well as our own TrendLens™ and Wealth Report data, point towards a cautiously optimistic outlook for 2021.

Global HNWIs and UHNWIs have been more resilient and some have even become wealthier this year; we expect a strong recovery in Asia, led by a V-shaped recovery of the economy in China and other markets, like Korea, Taiwan and even Japan, where the virus has been brought under control and luxury brands can leverage large domestic markets.

The data show some tentative recovery in selected categories in the U.Smarket, but the economy is still fragile and brands need to monitor the situation closely for pockets of recovery. Europe has been heavily impacted by lack of tourism, a second Covid-19 wave and the need to develop local consumers to help tide the crisis, since most overseas tourism has dried up due to International travel restrictions.

Categories that have done well include electronics and consumer techluxury autoskincare and jewelryParadoxically, these categories may have benefited from the current crisis, since travel budgets, which pre-Covid accounted for 20% to 30% of HNWIs luxury spending, have been diverted to luxury goods purchases and domestic sales. 

The recovery in Asia is led by well-known, iconic and trusted brands and boosted by loyal customers. Consumers have had less time to shop and explore new trends and brands, so they resort to familiar luxury brands as a sort of “comfort luxury”, looking for reassurance in times of uncertainty.

Our data clearly show that the Covid-19 has taken an emotional toll even on HNW consumers, since their wealth can only get so far in protecting them. As a result, many have focused on their wellness and health, rather than on more hedonistic pursuits. We see in the data more attention to social issues that have come to the forefront during the pandemic and increased concern about the community and the world around them.

This new mindset has translated into increased loyalty towards brands that have connected with them in meaningful ways during the pandemic, brands that have reached out and showed empathy.

One of the categories most impacted by the Covid-19 pandemic has been travel. While it is difficult to predict when the sector will fully recover, our data clearly show that there is strong pent up demand for International travel. Even with the pandemic and its effects, the majority of the HNW consumers across Asia plan to take some form of international leisure travel within the next 12 months. The same is true in the US. HNW consumers in Indonesia, India and Hong Kong are particularly optimistic about international travel.

KEY TAKEAWAYS

1. LESS (BUT BETTER) IS MORE
We all have learnt to live more frugally during the Covid-19 pandemic. This is also true for HNW consumers, who have had time to slow down and realize that luxury shopping is not as essential as they were inclined to believe. We believe that this will translate in some cases into less frequent luxury purchases but of a higher quality, bringing back luxury to its original definition of quality, timelessness and long-lasting essence.

2.  LIVING FOR THE MOMENT
The Covid-19 has brought back our attention to the present. While the prevailing sentiment at the beginning of the pandemic was one of dread and uncertainty, people have adapted and found new ways to enjoy the moments that are often taken for granted in their lives. Brands, particularly in wellness, hospitality and leisure, will do well if they are able to capitalize on everyday relevant experiences, rather than “lifetime” ones, which was the norm pre – Covid.
3.  FOCUS ON YOUR MOST LOYAL CUSTOMERS
This is the right opportunity for luxury brands to focus and pamper their most loyal consumers. Gone are the long queues of aspiring customers who only buy low-priced accessories. Customers who visit luxury stores now are the ones that are truly loyal to the brand. Make sure that your service is of the highest level and offers clients quality time at the store or the convenience of shopping from their homes.
4.  LOCAL PRIDE AND DOMESTIC FOCUS
The Covid-19 has brought back a strong sense of local community and national pride, necessary to fight the virus.  Our data show that this has translated into a less global, more local sensibility, which will benefit brands which will be able to capitalize on it. 
5.  HEALTH IS WEALTH
Finally, the uncertainty of the Covid-19 is driving the realization that the real wealth is a healthy life. “I will be adopting a healthier lifestyle” is the major change in the mindset brought about by the pandemic in both the US and China.
OUR STUDIES ON THE AFFLUENT AND HNWIS

TRENDLENS™ 2020/21

TrendLens is Agility Research & Strategy signature syndicated research. Published twice per year, it is a complete insights and research program designed for marketing and insights teams and C-level executives to understand the latest trends on affluent and HNW consumers, across luxury shopping behavior (fashion, cosmetics, jewelry, watches, alcohol), travel and their finances in key markets Asian and global markets.

The AFFLUENTIAL™ Wealth Report 2020/21

The AFFLUENTIAL Wealth Report is a strategic insights study on the financial behavior of the affluent & HNW individuals, designed for senior and C-suite executives of wealth management, banking, insurance and credit cards firms which target this coveted segment. Profiling respondents by age, gender, occupation, financial savviness and risk attitude, the report aims to map out financial aspirations, needs and outlook across banking, wealth management, insurance, credit cards.

ADDRESS

For phone enquiries, please contact our regional contact center: +65-6396 6832 or by email at contactus@affluential.com


Our Recent Events And Updates
  • We’re offering year-end discounts for our Post-Covid Trendlens™ Reports. Please reach out to jason@agility-research.com for more details.
  • Last week we had a successful webinar session on the 2021 Luxury Consumer Outlook with senior executives from more than 70 luxury brands joining online from across Asia and Europe! Our managing director Amrita Banta discussed what lies ahead for the luxury industry in 2021 and how to recapture Asian and U.S. affluent and HNWIs spend, sharing invaluable insights based on work done across over 100 premium projects globally in 2020 and data gathered from interviews with over 4,000 affluent and HNW consumers across key Asian markets and the U.S.
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