Luxury’s new direction as markets and consumers evolve

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The years 2021 and 2022 once again proved that the luxury sector has always been the last to enter, but first to recover from any kind of economic or geopolitical crisis.

Over the past decade , the luxury goods sector expanded at a healthy rate of approximately two times the global GDP growth.

The sector remained resilient through the various waves of the pandemic to emerge victorious and glorified. The global luxury market is set to grow by 21 percent to reach a size of 1.4 trillion euros – revenge shopping with a vengeance. “In a luxury brand, the top 5 percent of customers provide 40 percent of the sales,” he said. “The next 15 percent of customers deliver the next 30 percent of sales. That’s the top 20 percent, who are true HNW and UHNW individuals, not mere millionaires.

“HNW and UHNW client retention and referrals will drive performance in 2023 and for that you need to execute now.”Europe has managed to recover beyond the 2019 levels, thanks to solid local demand alongside an extra-boost from U.S. and Middle Eastern tourist shoppers. As mainstream consumers have become more comfortable with secondhand fashion, and the stigma around resale has started to shift into aspiration, many brands and retailers have launched integrated resale platforms, from Isabel Marant and Balenciaga to Selfridges and Net-A-Porter.Statistics reveal that an impressive three-fourths of consumers of all ages and across the socioeconomic spectrum participate in the secondhand market.

McKinsey also estimates that off-price sales are likely to grow five times faster than full-price from 2025 to 2030. Meanwhile, 18 percent say that they are interested in buying second-hand clothes, though this figure lags quite far behind in Asia where only 9 percent are interested.The market was projected to be around $1.8 billion in 2021. There is a projection that 10 percent of revenue by 2030 is going to come from models such as rent a luxury, buy now, pay later and reusable luxury.As a resulting combination of all above trends, the brunt is being borne by the democratized lines of luxury.

As the world enters a new era of global political and economic uncertainty, luxury brands are turning their attention away from the aspirational client and renewing their focus on their very important clients .

 

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