The global luxury market is slowly recovering and should return to pre-pandemic levels by next year, a new report shows.
Boston Consulting Group And the Altagamma Foundation True Luxury Global Consumer Insight Report He said the future of the sector is bright. That is, even if consumption increased during the pandemic only at the upper limit of the luxury consumer pyramid.
BCG surveyed 12,000 high-end consumers and found that “US consumers are back,” but the high-end market is still far from normal business conditions. This is partly due to the continued repatriation of spending by Chinese consumers, which “may have a strong impact on luxury brands in the future.”
Much of the spending growth is driven by young millennial and Gen Z consumers, who are set to account for 60% of the total luxury segment by 2025.
In 2020, only the two highest luxury consumer clusters grew, with the “ambitious” segment (90% in population, 62% in value, pre-Covid) suffering the most. While the share of the “True-Luxury” category increased from 30% to 40%, it fell to 55% market share. Its growth was driven by the wealthiest consumers, with value growth of around 17% and an overall share increased from 6% to 12%.
It’s probably understandable because the consumers with the most personal wealth weren’t worried about the jobs and future finances experienced by those who scaled down their wealth.
However, although the pandemic is not over yet, it is clearly retreating in many markets, and reports show that the post-pandemic world has a growing desire for luxury and a rebound effect. High-end consumers generally have positive spending expectations, and as mentioned earlier, young consumers are “optimistically looking to the future.”
Interestingly, US and Chinese consumers are the brightest, while Europeans say “domestic spending [are] We are more pessimistic about foreign spending over the next 12 months. ”
Change is happening
As mentioned earlier, the post-pandemic luxury segment shows some differences from the pre-Covid world. Their tastes seem to be different from those of Western consumers, except that Chinese consumers are spending more money in their own country.
It’s interesting that Western luxury shoppers have expressed their intention to move to a more subdued style, but Chinese respondents “substantially confirmed their intention to move in the same direction as before the emergency.”
And with the rise of live stream shopping and more consumers and gorgeous labels shifting online during a pandemic, digital is now important. Especially in the United States, the potential market for livestreaming is estimated to reach $ 25 billion by 2023.
There is also a growing trend towards luxury virtualization. According to BCG, games are one of the key areas, with 55% of 39% of consumers who know about virtual online games involving luxury brands buying in-game items. Importantly, 86% of those people say they have purchased the corresponding physical version.
And, “Reset the distribution ecosystem for seamless omni.[channel] “Experience” continues. Last year, 46% of true luxury consumers completed their purchases over-the-counter, while 30% were pre-surveyed online.
But the importance of “humanity” is still there. The report states, “If the brand arrives by all digital and physical means, personalized touch is still important to consumers and the brand builds a more one-to-one relationship with customers at all touch points. I’m sure we need it. “
Still, the label needs to think deeply and seriously about the brand’s goals and responsibilities. Sustainability issues are “increasingly considered by consumers when making purchase decisions, with more than 6 out of 10 respondents emphasizing their impact on decision making.”It rises to 7/10 Millennials And Gen Z.
Finally, the impact of the new business model is as follows: second hand And take into account rental.Report coming that day Kering Announced investment in handbag rental business Cocoon. This means that the importance of trends is very clear.
According to BCG, consumers are increasingly embracing the possibility of renting luxury goods, with an average of 18% of consumers testing this possibility last year (+ 13% year-on-year). More and more consumers are selling second-hand luxury goods, especially among young people, with 44% of Gen Z and 37% of millennials selling over the past year, compared to 26% of the elderly. I’m doing this.
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Luxury is recovering, China and the US are key, Europe remains cautious
Source link Luxury is recovering, China and the US are key, Europe remains cautious