PARIS — Going local, it would seem, pays. With the coronavirus pandemic, global tourism has dried up, depriving European luxury houses of a key source of business and forcing them to deepen ties with locals — not just at home, but in markets across the globe. Ongoing flareups of the virus are expected to continue to spook would-be travelers, casting further uncertainty on the future of international travel, which will also be weighed down by deepening economic problems.
In this context, the importance of wooing customers on their home turf has gained urgency for luxury firms seeking to compensate for the absence of tourists in Europe. This is expected to remain a key priority in the coming months, with increasing activity on the local level, from traveling fashion shows to market-specific launches, targeted online campaigns to drive traffic to nearby stores and partnerships with local, digital platforms. Some brands have planned to open stores abroad to serve clients that used to travel to their stores in Europe.
At the top of the list is China — the country’s consumers account for a large share of the luxury sector’s growth. Emerging from the first wave of the coronavirus just as consumers in Europe and the U.S. began sheltering at home, China quickly became the focus of luxury groups eager to restart business. By April, brands like Burberry were using livestreaming to promote products with Chinese consumers on Tmall while Dior launched its Gem Clutch handbag on WeChat before offering it to other markets.
Cartier looked to China to debut two new watch models, introducing the Pasha in the country over the summer before the rest of the world in September, and presenting the Santos-Dumont on Tmall’s Luxury Pavilion first. Geneva-based industry trade fair Watches & Wonders in July said it would take to Shanghai in September — a first for the show — with a program from around a dozen labels that will include product launches, talks, panels and workshops on watch trends, technology and mechanical movements, as well as demonstrations by artisans.
At the high end of the fashion spectrum, Louis Vuitton said in July that it would head to Shanghai the following month for its next men’s fashion show. The livestreamed show which closed with Chinese actor-singer Kris Wu, set new audience records and fanned business across Asia, with Taiwan, China and South Korea hitting new sales highs, according to executives of the brand. Vuitton will next take the collection, with a few new pieces, to Japan with a show in Tokyo on Sept. 2.
“It looks like this could be a new model going forward,” Michael Burke, chairman and chief executive officer of Vuitton, commented at the time. “If the audience could not come to Paris, then we take the collection to the audience, and I think that’s going to remain.”
It also makes sense for smaller European fashion labels that enjoy a following with Asian consumers to meet those consumers on their home turf. Contemporary fashion label Ami launched on Tmall’s Luxury Pavilion in June, and has been expanding its store network in China and South Korea this year — despite the coronavirus crisis.
Asian clients had helped the brand perform strongly in London, Paris and New York, according to ceo Nicolas Santi-Weil. “They’re not here anymore, in Paris, in London, but on the other hand, they are even more eager to consume locally,” he said.
“I think they are even more appreciative of brands that made an effort to go to them, brands that set up there, that have invested, opening stores, holding events — and there aren’t many brands our size who have done this,” he said.
The executive has been keeping an eye on rents in New York’s SoHo, where they have been too high for the past three years. If they come down to a more reasonable level, he said he might consider making a move to open a store there.
Officine Générale is another contemporary French label tracking real estate prices in New York. The designer Pierre Mahéo’s biggest U.S. client, Barneys New York, is gone. But e-commerce business remains brisk — and the online sales have provided him with valuable information about his clients’ neighborhoods — south of 30th Street. Mahéo is also scouting real estate in Paris in hopes of opening his largest store yet in order to elevate the level of service to his loyal customers at home.
At the high end of the spectrum, Swiss watch label H. Moser, which plans to open its first pop-up store in Beijing, is also focusing on targeted investments in specific markets where there is potential, using Facebook and Instagram to drive people into online avenues or multibrand stores run by partners.
“We don’t spend a lot, but very targeted [campaigns] give us a good return on investment that we can monitor,” said Edouard Meylan, ceo of H. Moser.