Spend intentions from Q1 2020 provide a good benchmark for “pre-COVID” spending behaviours and can be used to measure changes in attitudes to luxury spending throughout the pandemic.
Encouragingly for luxury brands, Q1 2021 revealed a similar resurgence of willingness to spend which occurred after the end of the first lockdown.
Since Q1 2020 MillionaireVue has gathered information on the luxury spend intentions of c.2300 British millionaires (those with at least £1m in investable assets, excluding the value of main property), providing valuable insights into the impact that the COVID-19 pandemic has had on luxury purchase behaviour amongst the UK wealthy.
As the virus spread and the British Government took the unprecedented step of a national lockdown, the number of millionaires planning to spend on luxury goods such as jewellery, watches and cars dropped, with intentions to spend on leather goods taking a particularly large hit in Q2 2020.
The relaxation of restrictions and re-opening of stores saw a promising pick up in attitudes towards luxury in Q3 2020, with intentions to spend more across multiple luxury categories climbing to pre-COVID levels.
However, a regional tier system and uncertainty over a second national lockdown had a noticeably negative impact on willingness to spend in Q4 2020. Even luxury wine & spirits, a category largely unaffected by the first lockdown, as millionaires continued to enjoy their premium tipples at home, saw a dent in intentions to purchase as the UK endured an anxious Christmas period.
A resurgence of willingness to spend on luxury occurred after the end of the first lockdown in Q2 2020 and we are seeing a repeat of this positive shift in spend intentions in early 2021, which is encouraging for luxury brands. It demonstrates that the appetite for luxury amongst the wealthy has not been eradicated, it was merely tempered during the most uncertain times when personal and financial attentions were likely to have been focused elsewhere.
Q2 2021 presents a promising but challenging time for luxury brands across all categories. The potential for “revenge spending”, where those who have been restrained in their luxury spending over the past year are looking to splurge is high. However, brands must consider how to cater for a luxury audience emerging from a global pandemic, along with the changes in consumer behaviours and attitudes.
MillionaireVue gives luxury brands the opportunity to explore the changes in luxury consumer behaviours and attitudes, by allowing brands to put questions directly to the post-covid audience of HNWIs and understand their changing needs and requirements.
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