The following article is a takeover prepared by the students of the class « Sustainable Luxury » (part of the master « New Luxury & Art de Vivre » at Sciences Po, Paris / France) taught by UrbanMeister founder Mirela Orlovic. They share their views on how a future based on sustainability and circular economy after Covid19 will look like.

The pandemic outbreak put the world’s economy as well as the luxury industry to a temporary halt, yet it is too soon to relevantly assess the consequences overall.

Since its apparition in China in late december 2019, the new coronavirus, or Covid-19, has now reached 175 countries around the globe and is infecting and causing the death of thousands of people worldwide. In addition to that, the outbreak of the pandemic already led to a slowdown of global economy and have many consequences in our everyday lives. In response to this serious crisis, governments have unlocked exceptional sanitary and economic measures to limit these negative impacts. However, it is too early to have a clear picture of how much the Covid-19 will shape the world and thus, to make really tangible hypotheses and that accounts for all the sectors of activity touched, including the luxury industry. Indeed, economically speaking, it is complicated to quantify the impact that this crisis will have on the industry, although some projections expect a loss of 25 to 30% of revenue:

Yet, high end brands such as luxury brands have greater margins thus, they can take the hit of this crisis more easily and navigate through it more efficiently. For instance, Chanel, Hermès and L’Oréal announced that they will pay 100% of their employees’ salaries for the next two months without governmental help. Moreover, luxury groups are witnessing a lower decrease in stock price than other mass market groups or brands overall. 

Nevertheless, luxury brands’ economic resilience in face of the pandemic is absolutely not a guarantee that everything will go smoothly and that business will continue as usual for them after the shock. Given the seriousness of this crisis and the lack of visibility of its consequences, it is of the utmost importance for any sector and any business to take the time to think first about how to survive this and then, what changes are necessary in order to avoid falling in such a situation again. Consequently, priorities will be set and it is likely they will have to deal with strategic planning measures to limit the decrease of their net profits and secure their businesses. As a result, budgets dedicated to long term investments, like those involved in the shift toward sustainable models, would certainly be affected, i.e. less money may be allocated to these issues. But even on that matter, it is important to note that it is also difficult to project ourselves and know what will indeed emerge from this crisis. The Sustainable Development Solutions Network of the UN (UNSDSN) in charge of promoting “integrated approaches to implement the Sustainable Development Goals (SDGs) and the Paris Agreement on Climate Change” is currently running until April 21st a survey to assess the impact of the virus on the SDGs as well as states’ and companies’ commitment to them to gather more data and draw conclusions from them.

Notwithstanding, despite the general confusion, the Covid outbreak is surely going to lead to some drastic changes at all levels from production models to consumption behaviours especially in segments of the luxury industry like fashion and hospitality that we will focus on. Indeed, because this pandemic can be considered as a major threat for human lives since the beginning of the century, it will trigger and is already triggering basic protective instincts and behaviors. People will therefore consume differently and have altered needs and expectations. In order to secure their business and remain relevant, luxury brands have to take into account the new needs that will emerge from this period and this will eventually lead to various strategic changes : more consumer-centricity and greater emphasis on omnichannel retailing, more agility for a faster decision-making process and more sustainable thinking through a transformation of current supply chain based on a linear model instead of a circular one. As the sustainable activist and former editor at Vogue India Bendana Tewari explained in a Business of Fashion’s op-ed, sustainability – that she broadly defines as a “way of life” – “will now be an act of conscious living, whereby we acknowledge that ‘more and more,’ ‘faster, not fewer’ and ‘bigger is better’ will not sustain us anymore […] there will be a profound awakening after this time of crisis. In order for us to be sustainable as an industry — and as human beings — we must break old patterns and find new, more elevated ways of living”. 

The Covid-19 crisis will eventually reshape some cores of the fashion and hospitality segments

It appears that both fashion and hospitality are the sectors of the luxury industry that are the most at risk mainly because most of their revenues are based on the circulation of goods and people that are under high scrutiny right now. Depending on how well companies will react and adjust to the situation, there will be a stronger polarisation amongst brands. Especially for fashion brands that will have to review their business model that is increasingly challenged and put into question.

From global to local customers

It is estimated that around 20 to 30 percent of luxury industry revenues, mostly apparels, are generated by consumers making luxury purchases outside their home countries, i.e. when they are traveling. Travel is what drives mainly the European and the American markets who host and sell to Asian clients, especially Chinese. However, due to the current situation, there is a fear of travelling at the moment. Besides, because of exceptional governmental measure such as travel ban or the closing of borders. This context is particularly difficult for the hospitality segment of the luxury industry but also put stress upon the European and American luxury market mentioned before. Brands will need to find new ways of attracting consumers in their local market (especially Chinese who drive the market’s growth) and offer a greater variety of content, not only based on sales. 


A way for brands to do reach out to customers in their local market is to go digital. For instance, Patek Philippe “is allowing its retail partners, including Watches of Switzerland and London Jewelers, to sell select models online for the first time”

This new drive for digitalisation can push forward and normalise the practice of online fashion shows. Again because of governmental measure, large gatherings are widely forbidden across the globe which prevent events like fashion weeks to take place. As a matter of fact, most of men’s fashion weeks that were supposed to take place in June have been cancelled in great fashion capitals like London, Milan and Paris as well as in other fashion scenes like in Russia, Japan or Brazil. Nevertheless, end of March 2020, the first online fashion shows ever took place during Shanghai fashion week. The organisers partnered with the e-commerce platform Alibaba and its marketplace Tmall to broadcast over 150 catwalk events with many designers selling items online from current collections. The initiative was a success and without having to fly hundreds of people from the fashion industry to the event. The reduction of the footprint such an event would have produced can serve as a platform to highlight the negative impacts of fashion shows on the environment and therefore may foster change in habits regarding that topic. 

From ownership to experience and back again

In the past years, we have witnessed a growing interest of experiential luxury over luxury products’ ownership. However, the shift towards experiential luxury will slow down since people travel less. They will return to buying small luxury items. This phenomena is called the lipstick effect: in times of crisis, consumers tend to spend less money and focus their purchasing power into buying small luxury goods.

Fashion’s seasonality challenged

According to Simone Cipriani, Head and Founder of the Ethical Fashion Initiative at the UN’s International Trade Centre: “Seasonality is also being questioned. Does it have the same meaning, in a world of climate change and erratic weather patterns?”

Guests arriving at the Dolce & Gabbana show in Milan wearing sanitary face masks

Luxury brands especially in the personal goods segment like fashion or jewelry will have to rethink their supply chain model to be more agile 

As of today, the major epidemic centers correspond to major production sites like in China or Italy for many luxury brands. Due to the lockdown imposed by governments, productions has stopped until further notice. Brands like Burberry, Prada or Coach that have factories in China were forced to stop producing. In addition to that, orders worthing billions of dollars have been cancelled putting some suppliers in a difficult position (debts, bankruptcy…). This situation sheds a light on the complexity of some brands’ supply chain model and may foster change with respect to that matter: we could see the emergence of more local networks of suppliers that would make brands more agile. 

Although such a crisis may induce change regarding the current supply chain model of most brands, it would also have very negative impacts in some Asian countries known for hosting big textile firms. Bangladesh that is a big hub of the textile industry mainly for mass market brands is expected to lose $6 billion in export due to order cancellations and lack of payments from their regular clients. Beyond the economic aspect, this can turn out to be a new major humanitarian crisis related to fashion. If brands opt for a more local network of suppliers, it would endanger the job of millions of workers there and create unsettlement (economic distress, rise of illicit practices, immigration).

 A change in consumption habits…

Consumers have had to face whole new situations in the middle of this unprecedented crisis. In many countries affected by the coronavirus, strict quarantines are put in place, and along with that, the closing of « non-essential stores ». Many consumers were arguing this definition on social medias, arguing that going to the restaurant, to the bar, to the cinema, was essential to their mental health. Still, in most countries, going outside is limited to buying food and goods of first necessity, and many turned to get their groceries delivered. In France, this service has seen an increase of 74%. While it is difficult to predict the impact of the crisis for mass-market fashion and accessories despite being counterbalanced by the positive weight of e-commerce; for luxury, it is a whole different matter. Indeed, due to the very nature of the goods, a lot of consumers are reluctant to order online. Fear of counterfeit, need for an in-store experience when buying, need for advice(s) by the staff in the store; buying luxury goods online is not that common (even among millennials).

McKinsey underlines the impact of the coronavirus crisis on the e-commerce. The key points are that, in China, millennials tend to use e-commerce less than before, and that, overall, orders’ value have decreased significantly. However, and even if the extent of this phenomenon is yet to be assessed, the use of e-commerce is meant to be strengthened by the crisis, and will create new habits, where consumers will be more likely to order luxury online, as they got used to it during this context. 

This crisis is producing a shift at different levels, and companies will need to make use of these key learnings, in order to remain relevant for consumers. China, Japan and South Korea offer a vision of control over the virus where in Europe, countries and governments are looked as overwhelmed, these Asian countries are offering an almost comforting vision (relatively to the extent of this pandemic) of the crisis. In this context, consumption is claimed to start again firstly in this region. Another key point is that this crisis led to stigmatization of certain countries and regions (especially China during the outbreak). Luxury companies relying a lot on this country, for sales but also in their supply chain, they will need to be really careful in handling the post-crisis period, in order to avoid triggering this growing local pride. 

… revealing a change of mind towards consumption

According to interviews and studies conducted by McKinsey: “One trend that is likely to intensify post-crisis is the trend toward sustainability and the desire for more-responsible consumption—reinforcing the need for companies to provide clear, detailed information about their processes and products”.

During a crisis this big, affecting health, economy, and consumption, consumers are put in front of the wall. They need to face – violently – the system they live in and its flaws, the kind of life they are having, the type of future they want. We will resume to our “normal lives”, eventually, but our lives won’t remain unchanged. Due to the extreme circumstances of this crisis, consumers are forced to think way more about the whole consumption process. “Do I really need to go out to buy food now, or can I wait a few more days?”, “Is it really essential to go buy this or that?”, “Should I really order this non-essential good that would make me feel good, or should I be more rational?”. These efforts made by all citizens will remain anchored, and this questioning will definitely have an impact on consumption, even post-crisis. 

This crisis leads to question the idea of luxury. Is luxury about excess, and consuming as much as possible? Or wouldn’t it be more about consuming less, but more qualitative, long-lasting products? The coronavirus crisis redefined what luxury is about, and is bringing it back to its roots: long-lasting goods, with a lesser impact on the environment. Customers have to re-think completely the way they consume, not only in terms of channels, but also in terms of needs and impacts. Needs, because this pandemic made customers realize a lot of what they used to buy was not essential, and they could live without them. There was a realization that needs should be prioritized more efficiently.  Impacts, because on the edge of what could be a revolution for sustainability, we have a second look at the consequences of our actions. Luxury is at the heart of these two concepts and consumers are facing this reality. 

According to several studies, consumers are developing a heightened sense of consciousness, regarding their consumption and their way-of-life. This crisis made us realize we live in an highly interconnected world, where everything is linked. In this context, ethics will be considered as important (if not more) as aesthetics, and luxury companies have all the cards in their hands to make the change happen. Indeed, even though the impact on these companies is difficult to assess and to predict as of now, they have an undeniable financial and market power. They can lead the transition towards a more sustainable world, a market more ethical, that the consumers are asking for. 


This pandemic made all of us face the realities and uncertainties of the system we live in. And the incredibly positive impact on environment the closing of industries had all over the world cannot be neglected. In China, the drop in levels of pollution will save more lives than the amount of people killed by the virus. It says a lot about how our way-of-living is becoming dangerous, and how fast we need to change it. Even post-crisis, the coronavirus pandemic will leave marks, and luxury has to make use of the learnings brought by this crisis, in order to reassess the values the companies are carrying. 

Sources Introduction:

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