Consumers Worldwide Look Ready to Spend This Summer – With One Big Exception

Hitting the Road

  • Over 39 million Americans are expected to travel by plane or car over the long Memorial Day weekend, up 8 percent from last year and closing the gap with 2019, according to the American Automobile Association
  • Many brands invested in travel retail at airports and holiday destinations last year and have expanded on that strategy in 2022
  • China’s travel restrictions will keep many Chinese tourists away from international destinations for a third summer

This Memorial Day, Americans are expected to hit the roads, and the airports, in volumes approaching pre-pandemic levels. It will be confirmation of what the fashion industry has known for a while: travel is back. From the ubiquity of Instagram swimsuit brands (which never truly let up on social media marketing, even during the worst of the pandemic) to the resurgence of airport retail to the recent wave of luxury cruise shows, fashion is betting on consumers having a big appetite for summer travel attire. Some brands are going further, getting into the travel business themselves with hotels and other hospitality ventures. Resort destinations increasingly resemble open-air malls as more brands open outposts in the Hamptons and the more exclusive Mediterranean islands. For those who can’t get away, revamped shopping districts aim to capture the “local tourists” exploring their hometowns.

The Bottom Line: One cohort that will be missing for a third consecutive summer are Chinese tourists, who face restrictions on travelling abroad (more on that in the next item). Though brands still hope these customers will return someday, their continued absence is forcing a recalibration in global retail strategies.

Shanghai Emerges From Lockdown

  • China is expected to lift most Covid lockdown measures in Shanghai on June 1
  • Some experts predict a wave of shopping and travel as restrictions ease
  • Concerns about slowing economic growth and the effects of China’s “zero Covid” policy have raised doubts about future spending on luxury goods

China’s most populous and richest city will officially emerge from lockdown on June 1, though what that means in practice remains to be seen. Shanghai’s near-total closure for much of the last two months was one of the most dramatic efforts by any nation to stem the spread of Covid since the early days of the pandemic. Experts are predicting a big wave of travel, mostly to domestic destinations as international locations remain off-limits to many. Some analysts predict a “back to nature” trend after so many spent so long cooped up in their urban apartments (conveniently, some of the most desirable destinations, including Hainan’s beaches, are situated near big duty-free luxury shopping centres).

Still, there is less certainty about whether we’ll see a full rehash of 2020′s “revenge shopping” boom. While it’s possible some consumers’ first taste of freedom will involve lining up outside the Chanel store, not all luxury companies are banking on an instant recovery. Richemont chief executive Johann Rupert, for one, cautioned earlier this month that a slow rebound was a distinct possibility, even as the long-term outlook remains strong.

The Bottom Line: Richemont’s caution stems from mounting concerns about the overall health of China’s economy, in contrast to two years ago, when the country was one of the few to emerge relatively unscathed from the first phase of the pandemic. Even if Shanghai residents are free to travel again, they may not be in the mood to shop.

The BoF Sustainability Index 2022 Launches

  • BoF’s annual benchmark of fashion’s progress towards sustainability goals launches May 31
  • In its second edition, the assessment has doubled its scope to cover 30 of fashion’s biggest companies
  • New additions to the 2022 Index include Burberry, Prada and Ralph Lauren

This decade, fashion faces a critical challenge to align with global ambitions to curb climate change and establish more responsible business practices. The BoF Sustainability Index tracks how the industry’s biggest players measure up. The inaugural edition, published in 2021, found a substantial gap between major brands’ public commitments and meaningful action. This year, the assessment has doubled in scope to examine performance at the industry’s 30 largest public companies across three market segments: luxury, high street and sportswear. New additions in 2022 include Burberry, Prada and Ralph Lauren.

The Bottom Line: Download the full report from BoF Insights on May 31 for in-depth analysis of the industry’s state of progress, individual company assessments and key areas of focus for the year ahead.

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