The pandemic, cost-of-living crisis and inflation hikes continue to have an unprecedented impact on affluent populations, their wealth, and their spending 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 business landscape.
This report comes in PPT.
A high inflation environment, deglobalisation, climate change, the war in Ukraine, a slowdown in the Chinese economy, continued supply chain issues and decreasing consumer confidence will make 2023 another challenging year for luxury goods. In the largest markets, flexibility and agility will be key over the forecast period. Shifting attention to other regions for new pockets of growth, or as production or distribution hubs, is something companies and brands should consider in the short to mid term.
Gen Z and Gen Alpha will account for 45% of the global population by 2030, and will be the largest target segment for personal accessories brands. These generations’ values and preferences are significantly different to those of their predecessors, and brands are being challenged to adapt their products, distribution, marketing and ways to engage with their consumers accordingly.
The share of sales through e-commerce reached 19% in 2023, signalling how technology continues to reshape luxury. From AI-driven personalisation tools, to virtual sampling, to omnichannel digital experience, to Web3, to virtual fashion shows, to the metaverse, companies and brands are being pushed to embark on a digital transformation in order to keep up with fast-changing consumer needs and wants.
With the luxury goods industry facing escalating accusations of “greenwashing”, companies and brands are challenged to transparently prove the results of their sustainability efforts. Greater attention is being paid to evolving consumer values and attitudes, as these will dictate demand for purpose-driven, environmentally-friendly products and services while rigorous measurements of all company activities alongside certifications from official organisations are vital to gain consumers’ trust and to comply with stricter regulations.
In the aftermath of the COVID-19 pandemic, our perspectives on home, wellness and lifestyle have undergone a profound transformation. Consumers now attach greater significance to the spaces where they reside, work and relax. The home has become a central hub for various activities, and people seek to create enriching experiences within it. Simultaneously, beyond their homes, individuals also value memorable experiences with their loved ones, emphasising the importance of social connections and shared moments through luxury experiences.
This is an aggregation of: Personal Luxury, Fine Wines/Champagne and Spirits, Luxury Cars and Experiential Luxury.
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