Strengthening existing retail qualities and adding further functions to the traditional luxury retail sector by enhancing benefits and adding additional attractors
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2021
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MACHINE-GENERATED SUMMARY NOTE : The Covid-19 pandemic continues to negatively impact many different sectors of life. One of the industries that was hit the hardest is the retail industry, in particular the luxury retail industry. As a result of the pandemic, the luxury retail industry has been greatly impacted by several forced store closures. Unfortunately, this trend is likely to continue. Although this means the tragic ending for many stores, it is a well-known fact that retail stores and luxury retail stores have struggled increasingly long before the pandemic commenced. According to statistics published by Statista in 2018 (see graph below) three main causes can be identified for this. These are: a predominance of the online retail sector (62%), a general change in shopping behaviour (56%), and a lack of consumer confidence (49)%). When observing the luxury retail sector carefully, a number of weaknesses become apparent which are further highlighted by the statistics below. Firstly, the benefits of online shopping seem to be far greater for individuals than those of traditional retail. Especially during the pandemic, individuals are benefitting from the general convenience and the ability to shop contactless. Consequently, new customer groups who previously had not purchased goods and services online are attracted. When analysing the statistics below, there is a great chance that the percentage of individuals who prefer to shop online will increase even further to the point where individuals will choose to shop online exclusively. As inner cities have become increasingly depopulated in recent years, this purchasing behaviour is likely to be stimulated even more. The overall change in shopping behaviour can be attributed to the fact that retail is not transforming, and new adventures are not created. However, it is also due to people taking advantage of the convenience of online stores and thus staying away from retail stores. The lack of innovation in retail is then transferred to the poor consumer mood and explains why 49% of the people in the survey criticised this. New approaches are therefore necessary to revitalise the luxury retail sector and to increase the aggregate demand once again