Where Consumers Shop for Luxury Goods

April 2023

The pandemic, cost-of-living crisis and high inflation continue to have an unprecedented impact on affluent consumers, their wealth, and their shopping habits on luxury goods. The top wealth segments stand out more now than ever before, and remain the key consumers and drivers of luxury goods. This report provides a top-line overview of market performance and prospects across luxury goods, and outlines key trends within the global luxury goods retail landscape.

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This report comes in PPT.

Key findings

Digitalisation remains the key force reshaping luxury retail

Luxury retail is undergoing seismic shifts, with digitalisation being at the core of many of the structural shifts afoot in the industry. Digitalisation is changing where consumers shop and how they engage with luxury brands and retailers, leading not only to a rise in the importance of the digital channel, but also forcing retailers to rethink the role of the store.

Rethinking the role of the store across the luxury retail landscape

As consumers’ desire to shop seamlessly both online and offline becomes clear, incorporating technology throughout the shopping journey will help unlock an impressive range of opportunities. Luxury brands and retailers are being charted with crafting consumer experiences and reconnecting with aspirational shoppers who want to shop in a physical store. 

Innovative technologies impact digital shopping and customer engagement

Improving digital engagement remains a top trend influencing e-commerce. As more luxury consumers search and shop across channels and platforms, digital has become key to enabling shopper engagement. Empowered by the rapidly developing application of technologies such as AI, VR and web 3.0, luxury retailers are exploring new ways of engaging across platforms.

Social and environmental responsibility in the supply chain becomes a focus area

While sustainability initiatives have garnered a broad range of interest from retailers in terms of rethinking stores, services and supply chains, much of the activity remains driven by improving brand reputation. The impact of sustainable initiatives in retail is expected to accelerate as legislation kick in and more retailers align commercial and strategic goals in the coming years.

Economic uncertainty leads retailers to de-prioritise key initiatives from a year earlier

While rapid digitalisation over the last decade put innovation into overdrive, and will remain important moving forward, some initiatives that once took precedence, such as increasing revenue in online channels, are taking a backseat due to a weak global economy, as retailers look to reduce operating costs.

Key findings
Prospects for luxury goods appear to be far more optimistic than previously expected
Premium and luxury cars continues to be the main source of revenue
Consumers’ thirst for real-life experiences injects impressive growth into experiential luxury
Asia Pacific remains the leading region
Luxury retail goes beyond key metropolitan areas
Sustainability remains a multi-faceted journey across the entire luxury retail landscape
Social impact in the supply chain overall becomes a key focus area for luxury retailers
Luxury retailers proactively mapping out supply chain set to become a strategic imperative
Channel shifts: Store-based versus non-store retailing
The digital transformation continues post-pandemic
Explosion in e-commerce sales witnessed across all regions
The digitalisation of consumers lifestyles to continue driving demand for luxury e-commerce
Period of rapid change has put pressure on luxury retailers to expedite innovation efforts
Consumers value and use a unified shopping experience
Pull factor of aspirational shopping sees luxury consumers return to the physical stores
Luxury consumers will continue to crave the physical aspect of in-store shopping
But for most affluent consumers, the shopping journey now starts online
Store-based shopping continues to dominate the luxury retail landscape
Luxury goods sees a revival in store-based footfall and demand as mobility normalises
Following a dramatic drop in pandemic-led footfall store-based channel sees brighter outlook
Use of in-store technology gains relevance in retailers’ omnichannel strategies
Consumers increasingly opt for brands with engaging in-store experiences
Global megatrends create space for further development across luxury retail
Galeries Lafayette signs a partnership with ABFRL to expand in India
Nordstrom and Asos enter into a joint venture to build capabilities in the US
Kering SA & L'Oréal partner with global neurotechnology company to pilot t he Scent-Station
Luxury retail’s race to embrace e-commerce
Rapid rise of digital device use across key markets fuels further growth in digital sales
All regions see a shift towards a more digital world triggering changes in shopping behaviour
Second-hand buying and selling on the rise thanks to digital platforms and economic woes
More luxury retailers bring resale in-house thanks to digital expansion
Luxury retailers utilise more artificial intelligence to provide enhanced personalisation
Augmented reality becomes a key component for luxury e-commerce shopping
Technologies impacting shopper engagement in the next year
Ferragamo taps into the thrill of solving a mystery to unveil new collection
Gucci ventures into the metaverse
Luxury beauty brand Amorepacific provides digital feedback to users with wearable e-skin
Transformations in globalisation, consumer lifestyles and priorities to shape luxury
Luxury beyond ownership likely to boom as discretionary spending gets squeezed
Luxury brands will add more gaming features to boost conversion rates and collect data
Luxury brands will look at sensory shopping to provide more immersive digital experiences
Key takeaways
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Luxury Goods

This is an aggregation of: Personal Luxury, Fine Wines/Champagne and Spirits, Luxury Cars and Experiential Luxury.

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