by Madison Haile
Charleston’s King Street is the hub of all hubs, where tourists and consumers of high-end goods reside.
While the shopping mecca was like a ghost town during the pandemic, King Street's renowned hustle and bustle returned 10-fold, and high-end luxury boutiques, particularly, experienced a surge in sales.
But as the initial shopping frenzy post-pandemic has subsided, a more complex narrative has emerged, revealing a market grappling with renewed caution and evolving preferences.
An anemic pandemic economy
The pandemic sparked the largest worldwide economic downturn in over a century when it shut down the nation’s economy in spring 2020.
As COVID-19 swept across the globe, people stayed inside, and businesses were forced to close their doors and go remote. So, product demand naturally declined.
In fact, spring season sales in 2020 dropped by as much as 70% compared to 2019, an understandable stat given that consumers had limited chances to physically browse the spring and summer collections in stores.
In the retail sectors, Moët Hennessy Louis Vuitton—known as LVMH, the world’s leading luxury goods group—and Kering were hit harder on sales than cosmetics and skincare companies but bounced back close to 2019 figures by the third quarter of 2020. In the same stretch, Hermès had already beaten its fourth-quarter 2019 results.
Luxury brands responded to these challenges by boosting their e-commerce sales, producing digital fashion shows, and increasing their social media presence.
Luxury economy still thrived
While the pandemic stressed the national and global economies in ways they had not experienced before, luxury sales still surged, driven by the increasing wealth of the affluent and the rise in savings among non-billionaires who had more time and resources due to stay-at-home measures.
Approximately $42 trillion worth of new wealth emerged during the first two years of the pandemic. In the United States, billionaires saw their wealth increase by one-third after the pandemic.
The fashion industry, a colossal global enterprise encompassing everything from haute couture to everyday wear, experienced this transformation firsthand.
“2021 and 2022 were blockbuster years for the luxury industry,” Lauren Sherman, fashion correspondent at Puck News, told Vox. “The biggest years they’ve ever had — ever.”
Beginning in 2022, a staggering 95% of luxury brands saw an increase in profits, coinciding with a noticeable surge in consumer spending on luxury fashion items.
This trend mirrors the broader growth seen in the global luxury fashion market, valued at $280.92 billion in 2022 and projected to reach $401.73 billion by 2028.
Miles Kirkland, managing director and portfolio manager for Truxton Trust Wealth Management Services, noted a surprising resilience in high-end spending in the current economy, particularly as evidenced by a robust stock market and rising home prices.
“With high-end spending, other factors, most notably the stock market and home prices, have been strangely resilient,” Kirkland explained. “These people tend to think more about wealth than income, so they still travel and buy fancy things.”
Shifts in buying behavior
The economy has been rocked by inflation since 2020, prompting the Federal Reserve to continually toy with the interest rate.
“The Federal Reserve raised interest rates from 0% to 5.5% over 18 months to slow inflation,” Kirkland said, adding that employment has remained strong despite the rate increases – all signals of a healthy economy.
But while Kirkland believes the pandemic's impact will diminish over time and ultimately “be a blip on the radar,” he is already seeing a shift in consumer behavior away from buying so much.
“People initially bought a bunch of stuff. Too much,” he said. “When people were free to travel, they changed priorities to experiences. We will all “settle out” and see the same balance of goods and services we have always seen.”
Christy Semple, a personal shopper for Hampden Clothing, a prestigious boutique on King Street in downtown Charleston, observed an unprecedented surge in retail sales after the pandemic.
“Retail sales were skyrocketing,” Semple said.
Katherine Redd, e-commerce director at Hampden Clothing, noted that the initial boom in sales happened both online and in-person as people began returning to normal life.
“We had a big boom online and in person right after things opened back up, and people were traveling and going places again, but things have stabilized to normal pre-pandemic levels,” Redd explained. “People craved that in-person experience after not having it for so long.”
The e-commerce director acknowledged that being in high-end retail during a pandemic forced a need to be creative and adaptive for clients - and for themselves to stay in business. There was a push for more virtual opportunities, with virtual trunk shows and zooms with clients for styling sessions.
Grace Cartwright, store manager and stylist at Hampden, said customers became more cognizant of what they would buy.
“People ask themselves, do I already have something in my closet that serves this purpose?’” Cartwright said. “People think about it. Do I need it? Typically, luxury shopping isn’t what you need.”
Mallory Vischer, a stylist at Hampden, agrees their customers currently have a newfound consideration in their purchasing decisions, reflecting a shift away from purely materialistic tendencies.
“They had a consumerist mindset but were more cautious with what they bought,” said Vischer.
Lillie Frankel, an employee at the high-end retail store Loeffler Randall, emphasized the importance of forging genuine connections with customers when navigating consumer behavior.
“We’ve made it a point to engage in conversations with customers, so we can provide a unique experience which sets us apart from other stores, especially with a slow-moving clientele,” Frankel said, adding today’s consumers prioritize distinctiveness over conventional items.
“People want to pay $500 for a unique top, not a white button-down,” she said.
Reshaping retail
In light of shifting consumer priorities, King Street's upscale boutiques have embraced a fresh perspective, recognizing the need for adaptation amidst economic challenges and evolving consumer behavior.
“Finding pieces that meet qualifications, like quality and specialty species, showcases those. Also, we build relationships so people want to buy from us so people know and trust us. Customer loyalty is vital,” Vischer explained.
There was also a major push for maintaining customer loyalty to sustain business success.
“Loeffler Randal hosted events during some holidays to continue connecting with our customer base and create worthwhile interactions in a tough economic climate,” Frankel explained.
There is a shared commitment on King Street to understanding and connecting with clientele on a deeper level.
“Meet your customers where they are. Be in tune with what's going on with them, what they're focused on, and their pain points are,” said Redd. “Genuinely try to understand them and communicate openly with them.”
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