Luxury Leather Goods in Australia

2021 DEVELOPMENTS

Ethical revolution

Luxury brands are gradually moving towards offering more ethical products that substitute animal-derived materials in favour of man-made alternatives. Ethical initiatives by luxury brands are not only driven by the industry but also by consumers looking to limit their impact on the environment and overall society.

Bricks-and-mortar remains a key channel

Flagship stores continued to be opened and renewed during the pandemic, despite COVID-19 restrictions and snap lockdowns across the country. For luxury leather goods, the sensory experience remains crucial for customers, with brand owners and retailers continuing to invest in the physical experience.

Luxury players are accelerating their digital capabilities

Amidst lockdowns to curb the spread of COVID-19, consumers embraced internet-connected devices to maintain a semblance of their daily routines while stuck at home. While many consumers were no longer forced to stay at home in 2021, many chose to do so more often than they had before the pandemic, and this is expected to continue into 2022.

PROSPECTS AND OPPORTUNITIES

E-commerce expected to continue making gains

Although a good number of luxury consumers are expected to return to purchasing in-store because of the unique experience, those who are worried about safety or those who dislike safety measures such as mandatory masks indoors are expected to turn to e-commerce for purchases. Many consumers will also use e-commerce for the convenience of shopping through this channel, being able to browse complete collections and compare features and prices, as well as find out about increasingly popular personalisation options before making a purchasing decision.

Demand for resale remains an increasing threat to luxury goods

Recent changes in lifestyle and economic uncertainty caused by the pandemic made consumers think more about the long-term value of a fashion item and view luxury goods spending as a form of investment. Similar to the demand for luxury jewellery, consumers in Australia are looking for longer-lasting items, but also those that are unique, or limited editions, and therefore have good resale value.

Experiences remain an important factor when purchasing luxury goods.

Global players in luxury leather goods will need to engage more with local consumers via products and experiences that are aligned with local, cultural and societal values. According to Euromonitor International’s Lifestyles Survey, just over a third of affluent and wealthy respondents in 2020 agreed they purchase from brands that are aligned with their own values, but in 2021 this figure saw a nine percentage point increase.