What trends look set to shape 2022 for the Luxury Goods Sector?
The Luxury Goods Sector made a triumphant return in 2021 with reports suggesting not only a full recovery to pre pandemic levels but also a significant increase in profits vs 2019. This type of recovery would have been difficult to imagine in 2020 when at the height of the pandemic we saw the closure of retail stores globally and a halt to all international travel. This resulted in many brands having to quickly adapt their digital strategy and build Omni channel business models almost overnight to better service their clients and build brand equity.
The UAE and GCC in particular were able to bounce back quicker than most parts of the world due to their covid-19 response, rapid vaccine roll out and reopening of borders to international tourists. Now as we have entered 2022 there are still many challenges to overcome such as the threat of new variants, however the luxury goods industry is anticipated to reach record profits this year. What we are witnessing in the Middle East is a real investment in the region, the UAE will remain a dominant market and hub to attract international clientele, however Saudi Arabia looks set for rapid growth with many brands setting up regional headquarters and further expanding their retail presence within the kingdom. Whilst the UAE is a very saturated market for talent the quality is very high, this is supported by a constant flow of new hires welcomed from all over the world including luxury capitals such as London, Paris and Milan.
Saudi Arabia is the biggest growth market for most luxury brands in 2022, however the real challenge will be securing top talent due to the rapid rate of expansion and the inflation of salaries caused partly due to Saudization and brands competing against each other to attract the best talent. Further growth across the GCC is anticipated notably in Qatar and Kuwait, as brands look to regain more control to ensure the top quality of the shopping experience, there has been a gradual move away from franchise model to directly operated by international Headquarters.
As there has been a shift to online shopping and age of the “tech savvy” consumer further jobs have been created with an expected rise in clients looking to attract candidates with expertise in areas such as digital transformation, ecommerce, CRM and influencer marketing. Traditional in-store shopping will remain the preferred choice by the majority of luxury goods shoppers, including travellers, however covid-19 has proven that brands cannot rely on footfall alone to achieve their targets and instead need to empower their retail teams to develop different strategies to expand their client network and build long lasting relationships.
For brands which are looking to grow their headcount in 2022 which will be most, they will be looking to recruit individuals which have the “edge” and showcase entrepreneurial qualities. As for candidates we are seeing that in addition to salary being a key driver, company culture is equally important and the interview process will help determine candidates interest, influencing their overall decision making.
This is something to bear in mind as a hiring manager especially in a candidate led market where there has been a sharp rise in candidates withdrawing from processes due to accepting other positions or deciding to remain with their current employers.
In summary 2022 looks set to be a record breaking year for the Luxury Goods Sector, there will be a number of interesting new projects across the GCC, a fresh set of challenges to face and further need for luxury brands to invest in their digital assets to remain agile and ahead of the competition.
If you are a luxury professional looking for a new challenge in 2022 and would like to arrange a confidential discussion to understand what opportunities there are in the market, or you are a hiring manager looking to attract top talent then please feel free to reach out directly to our Luxury Retail Consultant Michaela Leova via: firstname.lastname@example.org