Consumers worldwide look ready to spend this summer – with one big exception

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hitting the road

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

On this Memorial Day, Americans are expected to take to the streets and airports in crowds approaching pre-pandemic levels. It will confirm what the fashion industry has known for a long time: travel is back. From the ubiquity of Instagram swimsuit brands (which have never really given up on social media marketing even during the worst of the pandemic) to the resurgence of airport retail and the recent surge of luxury cruise shows, fashion is betting on a huge consumer appetite for summery ones travel clothes. Some brands are going even further and entering the travel business themselves with hotels and other hospitality ventures. Resort destinations are increasingly resembling open-air malls as more brands open outposts in the Hamptons and the more exclusive Mediterranean islands. For those who can’t get away, redesigned shopping districts aim to capture the “local tourists” exploring their hometowns.

The final result: One cohort who will be missing for the third straight summer are Chinese tourists, who face travel restrictions abroad (more on that in the next bullet point). While brands still hope those customers will return one day, their continued absence is forcing a recalibration of global retail strategies.

Shanghai comes out of lockdown

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

China’s most populous and wealthiest city will officially emerge from lockdown on June 1, but what that means in practice remains to be seen. Shanghai’s near-complete shutdown for much of the past two months has been one of the most dramatic efforts by a nation to stem the spread of Covid since the pandemic’s early days. Experts are predicting a major wave of travel, mostly to domestic destinations, as international destinations remain off-limits for many. Some analysts are predicting a “back to nature” trend after so many people have spent so long in their urban homes (conveniently, some of the most coveted destinations, including Hainan’s beaches, are close to large luxury duty-free malls).

Still, there is less certainty that we will see a full repeat of 2020’s revenge shopping boom. While it’s possible that the first glimpse of freedom for some consumers is queuing outside the Chanel store, not all luxury companies are banking on an immediate recovery. Richemont chief executive Johann Rupert warned earlier this month that although the long-term outlook remains strong, a slow recovery is certainly possible.

The final result: Richemont’s caution stems from climbing 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 with Shanghai residents free to travel again, they may not feel like shopping.

The BoF Sustainability Index 2022 starts

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

In this decade, fashion faces the critical challenge of aligning with global ambitions to mitigate climate change and establish more responsible business practices. The BoF Sustainability Index tracks how the biggest players in the industry are performing. The first edition, released in 2021, identified a significant gap between big brands’ public commitments and meaningful action. This year, the scope of the assessment has been doubled to examine the performance of the industry’s 30 largest public companies in three market segments: luxury, high street and sportswear. New arrivals for 2022 include Burberry, Prada and Ralph Lauren.

The final result: Download the full May 31 BoF Insights report for an in-depth analysis of industry progress, individual company reviews and focus areas for the year ahead.

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