WEBVTT 00:00:00.000 --> 00:00:04.482 align:middle line:90% 00:00:04.482 --> 00:00:05.940 align:middle line:84% CLAUDIA D'ARPIZIO: All sectors have 00:00:05.940 --> 00:00:09.810 align:middle line:84% experienced a difficult year of rapid unexpected changes. 00:00:09.810 --> 00:00:12.900 align:middle line:84% And luxury has not emerged untouched. 00:00:12.900 --> 00:00:15.360 align:middle line:84% While the industry has suffered from a pause 00:00:15.360 --> 00:00:18.480 align:middle line:84% in global traveling and ongoing lockdowns, 00:00:18.480 --> 00:00:21.360 align:middle line:84% we believe it has the necessary resilience 00:00:21.360 --> 00:00:23.160 align:middle line:90% to manage through the crisis. 00:00:23.160 --> 00:00:27.870 align:middle line:84% In 2020, we forecast this market to decline by 23%. 00:00:27.870 --> 00:00:31.260 align:middle line:84% But uncertainty will hover over this industry for some months 00:00:31.260 --> 00:00:32.400 align:middle line:90% to come. 00:00:32.400 --> 00:00:34.800 align:middle line:84% Following on the second quarter, which 00:00:34.800 --> 00:00:38.010 align:middle line:84% was the worst the sector has ever experienced, 00:00:38.010 --> 00:00:41.160 align:middle line:84% there were signals of recovery in the third quarter that 00:00:41.160 --> 00:00:44.850 align:middle line:84% stopped again by the second big wave of the virus in Europe. 00:00:44.850 --> 00:00:47.700 align:middle line:84% FEDERICA LEVATO: Scenarios for 2021 are varied and with 00:00:47.700 --> 00:00:53.130 align:middle line:84% forecast growth that ranges from 10%-12% to 17%-19%, 00:00:53.130 --> 00:00:57.060 align:middle line:84% depending on macroeconomics, the evolution of Covid-19, 00:00:57.060 --> 00:01:00.090 align:middle line:84% and the speed of return to travel globally, 00:01:00.090 --> 00:01:04.080 align:middle line:84% as well as the resilience and confidence of local customers. 00:01:04.080 --> 00:01:06.240 align:middle line:84% In the midterm, we expect the recovery 00:01:06.240 --> 00:01:08.670 align:middle line:84% to gather pace over the next three years, 00:01:08.670 --> 00:01:13.680 align:middle line:84% with the market returning to 2019 levels by the end of 2022, 00:01:13.680 --> 00:01:15.390 align:middle line:90% beginning of 2023. 00:01:15.390 --> 00:01:19.260 align:middle line:84% But Covid-19, despite hitting the brakes on the market, 00:01:19.260 --> 00:01:22.110 align:middle line:84% has fast-forwarded important dynamics which 00:01:22.110 --> 00:01:23.850 align:middle line:90% are reshaping this industry. 00:01:23.850 --> 00:01:25.350 align:middle line:84% D'ARPIZIO: First of all, this market 00:01:25.350 --> 00:01:27.300 align:middle line:90% is becoming more and more local. 00:01:27.300 --> 00:01:29.610 align:middle line:84% Historically, it was driven by tourist flows that 00:01:29.610 --> 00:01:32.370 align:middle line:84% are now being repatriated and will continue 00:01:32.370 --> 00:01:34.140 align:middle line:90% to do so in the future. 00:01:34.140 --> 00:01:36.450 align:middle line:84% LEVATO: Consumers will be younger then. 00:01:36.450 --> 00:01:39.920 align:middle line:84% This year, Gen Z emerged through distinctive traits and habits, 00:01:39.920 --> 00:01:43.560 align:middle line:84% setting their relevance as true luxury customers. 00:01:43.560 --> 00:01:45.150 align:middle line:84% And together with millennials, they 00:01:45.150 --> 00:01:50.460 align:middle line:84% will drive up to 180% of the market growth to 2025. 00:01:50.460 --> 00:01:52.480 align:middle line:84% D'ARPIZIO: Online, luxury doubled its weight 00:01:52.480 --> 00:01:56.820 align:middle line:84% in the total market in 2020, being now 22% of total luxury 00:01:56.820 --> 00:02:00.330 align:middle line:84% consumption, a skyrocketing performance worth 00:02:00.330 --> 00:02:03.510 align:middle line:84% five years of growth, clearing the road to 2025 00:02:03.510 --> 00:02:06.217 align:middle line:84% to become the first channel in the market. 00:02:06.217 --> 00:02:08.550 align:middle line:84% LEVATO: Old bricks-and-mortar channels were dramatically 00:02:08.550 --> 00:02:12.090 align:middle line:84% hit in 2020, leading to a distribution ecosystem 00:02:12.090 --> 00:02:13.140 align:middle line:90% transformation. 00:02:13.140 --> 00:02:15.090 align:middle line:84% And, in particular, retail networks 00:02:15.090 --> 00:02:18.570 align:middle line:84% will need to be redesigned around the customers, 00:02:18.570 --> 00:02:21.600 align:middle line:84% role of the store, global and local footprint, 00:02:21.600 --> 00:02:23.580 align:middle line:84% experiential customer experience, 00:02:23.580 --> 00:02:26.160 align:middle line:84% and store ergonomics will need to be rethought. 00:02:26.160 --> 00:02:27.840 align:middle line:84% D'ARPIZIO: The role of luxury brands 00:02:27.840 --> 00:02:30.610 align:middle line:84% is enlarging and is questioned, per se. 00:02:30.610 --> 00:02:34.440 align:middle line:84% They were relevant as a product, then as a producer of content, 00:02:34.440 --> 00:02:38.340 align:middle line:84% but now more and more as broadcasters and amplifiers 00:02:38.340 --> 00:02:42.430 align:middle line:84% of content and interactions that are relevant for the consumers. 00:02:42.430 --> 00:02:45.430 align:middle line:84% LEVATO: In fact, important influencers of consumer trends 00:02:45.430 --> 00:02:49.770 align:middle line:84% define this market, asking for larger and more purposeful 00:02:49.770 --> 00:02:51.030 align:middle line:90% brands. 00:02:51.030 --> 00:02:53.580 align:middle line:84% In particular, urgency for social impact 00:02:53.580 --> 00:02:56.460 align:middle line:84% is growing, with younger generations increasingly 00:02:56.460 --> 00:03:00.480 align:middle line:84% valuing diversity, equity and inclusion when choosing to buy. 00:03:00.480 --> 00:03:02.700 align:middle line:84% In general, the role of luxury brands 00:03:02.700 --> 00:03:05.850 align:middle line:84% needs to expand from that of signifier and symbol 00:03:05.850 --> 00:03:08.760 align:middle line:84% to include being friend and inspiration 00:03:08.760 --> 00:03:11.160 align:middle line:84% while ensuring excellence in the basics. 00:03:11.160 --> 00:03:14.940 align:middle line:84% D'ARPIZIO: So luxury brands face a year of tremendous shift. 00:03:14.940 --> 00:03:17.400 align:middle line:84% But we believe that the industry will come out 00:03:17.400 --> 00:03:20.250 align:middle line:84% from the crisis with more purpose and more dynamism 00:03:20.250 --> 00:03:21.270 align:middle line:90% than ever before. 00:03:21.270 --> 00:03:25.320 align:middle line:84% By 2030, this industry will be drastically transformed. 00:03:25.320 --> 00:03:27.660 align:middle line:84% We will not talk about luxury industry 00:03:27.660 --> 00:03:31.800 align:middle line:84% anymore, but of the market for insurgent cultural and creative 00:03:31.800 --> 00:03:33.210 align:middle line:90% excellence. 00:03:33.210 --> 00:03:37.040 align:middle line:84% In this new and large space, the winning brands 00:03:37.040 --> 00:03:39.900 align:middle line:84% will be those that built on their strengths 00:03:39.900 --> 00:03:44.310 align:middle line:84% while reimagining the future with an insurgent mindset. 00:03:44.310 --> 00:03:47.730 align:middle line:84% Luxury players will need to think boldly and rewrite 00:03:47.730 --> 00:03:49.880 align:middle line:90% the rules of the game. 00:03:49.880 --> 00:03:54.000 align:middle line:90%