Austin, TX, Jan. 15, 2021 — A new consumer survey from Brightpearl points to a crisis in the luxury sector with a major switch away from “frivolous” spending.
Just 8% of shoppers surveyed had made a big-ticket purchase such as a car since the start of the pandemic, the survey found. Almost a third said they plan to curtail spending on such purchases over the next 12 months.
Only 18% of consumers said they are looking to buy luxury apparel such as designer handbags during 2021. Just 10% said they plan to spend on luxury watches, jewellery and fine art in the same timeframe. Overall, luxury spending is likely to be down by 24% in 2021.
“The luxury sector is being impacted in a huge way,” said Derek O’Carroll, CEO of Brightpearl, which allows retailers to streamline their operations and recently raised $33M to boost its platform. “Who wears a suit to a meeting on Zoom?
“As people continue to tighten their belts, and with the knowledge that many major events are likely to be cancelled again this year, it seems people will be shying away from splashing out on a pair of premium boots or a handbag that they aren’t sure they’ll be able to take out to show.”
With a clear signal that we expect to spend more time indoors in 2021, one-quarter of shoppers plan to splurge on DIY products, video games and home furnishings this year.
The survey of 2,000 consumers from Brightpearl, which provides digital operations solutions for some of the world’s biggest retail brands, highlighted other shifts in spending patterns which will have a huge impact on retailers over the next year.
Brightpearl’s analysis reveals that consumers are showing less loyalty to brands since the pandemic struck. Some other findings:
- Two-thirds of shoppers say they are open to trying new brands.
- The pandemic is also set to have lasting change on shopping habits; only 27% of Americans responding to the survey said they will continue to shop as they did before the crisis.
- According to the survey, 28% of Americans are earning less than before the pandemic hit.
- Almost one in five (19%) live in a household where at least one person has lost their job, and 17% are now shopping for additional family members.
- Only 34% have seen no change to their financial situation with 78% saying they need to be “very careful” with their money, while 49% are cutting down on “frivolous spending” over the next twelve months due to uncertainty over the economy.
“Shifts in spending habits apparent at the start of the pandemic are likely to accelerate this year as we grapple with fresh restrictions on movement likely to last well into the spring,” said O’Carroll. “It is going to be a choppy 12 months for the entire luxury sector as consumers move away from frivolous spending and concentrate on pure survival mechanisms. The harsh reality, though, is there will be winners and losers across all categories. What firms do next counts.”
Brightpearl has distilled the data into a new report on the habits, categories and spending of shoppers over the next twelve months.
Brightpearl works with retailers introducing new software that puts orders, inventory, financials, POS (point of sale) and CRM (customer relationship management) in one place.
About Brightpearl
Brightpearl is the number one digital operations platform (DOP) for the retail and wholesale sector. Built to manage the complexity of modern business, the scalable platform offers insights for fast decision-making, the flexibility to respond to rapid changes in demand and smooth integrations with other core operational systems within the organisation.
Brightpearl’s complete DOP solution includes financial management, inventory and sales order management, purchasing and supplier management, CRM, fulfillment, warehouse and logistics. Brightpearl’s configurable automation workflows also have measurable time and cost saving impact for our customers, allowing them to focus more resources on growing the business. In addition, the solution has high-performing connectors to the major ecommerce platforms, including Shopify, Magento and BigCommerce.
1,000 retail businesses from across the world use our platform and we manage over 10m transactions and $3bn of business a year. Our team guides retail businesses through a highly efficient implementation process which typically gets them up and running in less than 60 days – twice as fast as our competitors.
Brightpearl’s U.S. headquarters is in the heart of downtown Austin, with a global headquarters in Bristol, UK. You can connect with us on Twitter (@BrightpearlHQ), LinkedIn (linkedin.com/company/Brightpearl), and Facebook (facebook.com/brightpearl).
Media contact:
Mark Hook