Competitor Strategies in Luxury Goods

Delivery

This report comes in PPT.

Key Findings

Leading multinationals continue to reign, capitalising on the heightened consumer appetite for luxury goods

With the global top 10 luxury goods companies accounting for over half of all sales in 2021, the competitive landscape overall remains highly concentrated. However, competition at the top is increasing, with leading players looking to further expand their geographical coverage, portfolio segmentation and cross-industry diversification.

Supply chain resilience a linchpin to competitiveness

Supply-demand imbalances, worsened by global events such as the war in Ukraine and China’s restrictions under its zero-COVID policy, continue to weigh on luxury businesses’ supply chains and balance sheets. This is leading to increased investment in supply chain resilience, especially through manufacturing localisation, supplier diversification and automation.

Luxury companies pushed to emphasise and communicate both functional and symbolic value of goods

Inflationary pressures are eating into consumers’ discretionary and luxury spending, but the desire for luxury and experiences remains unabated. However, as consumers take a more conscious approach to luxury, companies are increasingly focusing on value creation by harnessing the power of tangible functional benefits, such as brand heritage, craftsmanship and longevity, as well as enhancing brand communications, storytelling and experience.

Operations are being improved to meet consumers in the digital and physical spaces

With the world entering a new phase of digital reality, the rise of the “metaverse” has created a new territory to explore for the luxury industry. Companies are shifting more to digital marketing and e-commerce, implementing digital components in the in-store shopping experience, and beginning to meet consumers in the metaverse.

Sustainability initiatives delivering tangible results are top of the agenda

Growing consumer demand for purposeful living and environmental stewardship will continue shaping competitive strategies. While pre-pandemic, the focus was more on environmental problems, social momentum is now accelerating fast, with key players and consumers alike defining sustainability as supporting local communities and addressing diversity, inequality and equity.