Sara Bernabè, General Manager of Italy Planet, was among the speakers present at the 26th ‘Fashion Summit Pambianco – The fashion industry and new paradigms’ – offering a snap-shot onto post-pandemic consumption in Europe, and in Italy in particular, highlighting the features typical of the new consumer and the differences from the pre-Covid period, while presenting some forecasts on consumer trends, and especially those of Chinese consumers.
The analysis began from the trend of international flights to Europe, which restarted during the second half of 2021 with an uptrend of +36% in October 2021 over October 2019. This recovery had a significant impact on the sales of tax-free products, which rose by +45% over 2019. The data that emerged also shows how in 2019, more than 1 consumer out of every 3 was Chinese, while in 2021, 30% of consumers are American, followed by Russians and Arabians.
Another interesting fact regards the average receipt, which in Italy rose by +3% in 2021 over 2019 for all nationalities. The reason for this was partially due to a lack of organised group trips, representing an important source of income, to outlets or duty-free stores, while also the average age of the shopper increased (with a complete lack of Orientals, who are most often young with a high purchasing power).
The segmentation of the international shopper outlined by Italy Planet presents a picture of Italy divided into three categories in 2019: the Elite Spenders, with an average amount spent of 15 thousand euros each (1% of spenders accounting for 26% of sales), the Power Spenders (10% of spenders accounting for 52% of sales) with an average amount spent of 3 thousand euros, and the Core Spenders (81% of spenders accounting for 24% of sales), with an average amount spent of 500 euros per spender in 2019. The data shows how in 2020 Elite Shoppers accounted for even a greater share of the purchases made when compared to the other two categories, arriving at 58% of purchases in February 2021, since they were the only ones to travel during the time of restrictions. Towards March 2021, however, there was an inversion of this trend, with Elite Spenders dropping-off to 48%, while Power Spenders rose from 37% in February 2021 to 43% in March, and Core Spenders passed from 5% in February to 9% in March, thereby signalling a gradual return to normality as people once again begin travelling abroad.
The new shopper
The pandemic also introduced changes destined to continue over time like sterilization, smart working, click and collect, personal protective measures, etc.: habits that are an expression of profound human emotions and sentiments, including the feeling of uncertainty and anxiety about the future.
The analysis done by Italy Planet compares consumer trends during the global economic crisis of 2008 with those of the 2020 post-Covid crisis, showing how the consumption of goods and services decreased much more during this most recent period of crisis in 2020, in what is a clear confirmation of the extreme impact the pandemic had on the sentiments and purchasing habits of people. Nevertheless, the data likewise underlines how in 2021 the tendency to save money is gradually starting fade away as it is replaced by the tendency to consume more, with people once again starting to trust in the future.
Another important trend is the boom in e-commerce: if we consider only the second quarter of 2020, the growth rate of e-commerce experienced in the USA is equal to that of the last 10 years, representing a trend that has continued to grow in double digits throughout all of 2020, with a clear rise also in the services connected to e-commerce like buy-now-pay-later, which it is estimated allows brands to reduce the number of virtual carts abandoned to around 10%. Likewise interesting is the penetration of this service among the older generations, increasing from 1% to 18% among the Baby Boomers.
The pandemic has also profoundly changed the habits of consumers, who are increasingly demanding, digitalised, and attentive not only to the product, but also to the services the brand can offer, transforming it into a factor of distinction and competitiveness. In this process, technology is the accelerator of all aspects of the company’s departments, and the customer journey is the answer of brands to the new consumer. This, however, does not mean that physical retail can be left behind in favour of the digital experience. To the contrary, messaging APPs, gaming, e-commerce, social media, streaming, etc. help reinforce the growth of the physical store. Over 69% of sales in fact arrive from navigating online from personal cell phones or tablets, and this number arrives at 80% in China, independent of where the final sale occurs, whether it’s online or in the physical store. The consumer of the new normal in fact passes with fluidity from one channel to the other, in a completely natural way. The post-pandemic customer also expects an increasingly personalised offering.
If from one end, the omnichannel allows customers to come into contact with brands through a greater number of channels (social media, messaging apps, podcasts, videogames, physical stores, etc.), from the other end, all these channels are limited by their inability to perfectly interact with one another in this moment. For this reason, it is fundamental for brands to always have control of their businesses through the synchronization of these channels that interact with the brand’s stock, warehouse, distribution, and sales, in what is a unified commerce. The brand does not need to change its front-end but must create a digital platform that acts as a ‘funnel’, so that all these channels are involved in the back-end, jointly offering the data needed to better enter into contact with the customer. So, for example, if the customer enters a store and the brand has a digital platform for the integrated management of data, it is possible to understand if the individuals in question are registered with the brand’s social media, if they watched a streaming service, if they use gaming connected to the brand, or if they have a product present on the wish list of the brand’s e-commerce channel, etc…
The Chinese shopper
The Chinese e-commerce market is the largest in the world, with a growth equal to 6%, which is expected to arrive at 2 billion dollars in 2025. Despite the fact there are still some factors slowing down luxury consumption by Chinese consumers (like, for example, the concept of common prosperity, restriction on extra-continental travel, etc.), the middle class is destined to grow exponentially all the way up to 2030 (+68%) and the appeal of European shopping will in any case remain high once international travel has returned to normal. Additionally, not to be forgotten is the appreciation of Chinese currency (the Chinese Yuan is at its highest level of the last 5 years), guaranteeing Chinese tourists a greater purchasing power than in the pre-pandemic period. This will allow Chinese consumers to dominate the sector of luxury goods, contributing to almost half (47%) of the global sales of personal luxury goods by 2025.
Finally, according to IATA, the growth trend of international flights will be slow but constant, and there will be a return to the pre-covid level with the arrival of 2023, with an initial restart of intra-European flights, followed by long-distance ones, which will go hand-in-hand with the growth of duty-free purchases in retail. When compared with 2019, in 2021, we in fact expect a 23% rise in tax-free purchases in Europe, arriving at +56% in 2022, above all as the result of American, Middle Eastern, and Chinese tourists, who it is estimated will return to travelling during the second half of 2022. Italy will grow more slowly compared to the European average, (where it appears France will lead the way in the recovery), with a 46% rise in tax-free purchases in 2022, which also in this case will be mainly driven by American and Middel Eastern shoppers, and to a lesser degree Chinese shoppers.