Luxury Goods Market
Luxury market consists of nine segments, which is dominated by luxury hospitality, personal luxury goods and luxury cars. These segments collectively account for almost 80% of the entire market. Overall, luxury goods market has shown significant growth in recent years. The growth is attributed to growing income of individuals. Also, luxury items represent social status. Thus, people tend to buy luxury goods to show off their status. Registering the trend, the luxury goods market is anticipated to show promising growth in the coming years.
In category of luxury goods, jewellery and shoes are among top items contributing nearly 7% of the overall revenue generated. Handbags and beauty products are next in line. At the same time, sale of watch produced average revenue.
Emergence of online stores is driving the sale of luxury items. E-commerce is facilitating easy purchase option of products produced at distant places. This, in turn, has contributed significantly to the growth of global luxury good market. On the other hand, contribution through offline stores has decreased drastically. This is a consequence of competition by online stores.
Registering the preference and demand for online purchase of luxury products, the luxury goods market is anticipated to grow significantly in the coming years.
Global Luxury Goods Market: Overview
In an era of rapidly changing trends, producers of luxury goods have started to keep a watch on a new class of consumers that is rising these days. High-Earners-Not–Rich-Yet (HENRY) is the new class of consumers is likely to become increasingly relevant in the times to come. In addition to that, luxury goods manufacturers are now making substantial investment to draw the attention of the younger section of the population, who comprise the future consumers of luxury goods. Attempts to trigger interest of younger generation are likely to fuel growth of the global luxury goods market.
These ‘new’ tech savvy generations desire for seamless, individualized brand relationship and are investing in brands across the globe to market products utilizing social and digital media platforms. They are also using the same platform to engage with existing and prospective consumers.
Type, gender, mode of sale, and region are the five key parameters based on which the global luxury goods market has been divided. The objective of such segmentation is to offer a clearer, 360-degree view of the market.
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Global Luxury Goods Market: Notable Developments
One of the developments that offer a glimpse of the market dynamics about the global luxury goods market is mentioned below:
- In November 2019, Louis Vuitton Moet Hennessy (LVMH) acquired US-based luxury jewelry and specialty retailer Tiffany & Co. The acquisition is one of the largest in the business of luxury retail. Following the acquisition, it is expected that LVMH will be able to expand its reach and diversify its product offerings.
Some well-known organizations in the global luxury goods market include the below-mentioned:
- The Estée Lauder Companies Inc.
- Cie Financiere Richemont SA
- LVMH Moët Hennessy
- L’Oréal S.A.
- Kering S.A.
- Prada S.p.A.
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Global Luxury Goods Market: Key Trends
The following drivers, restraints, and opportunities characterize global luxury goods market over the assessment period, from 2019 to 2027.
Younger Generation Likely to Fuel the Demand for Luxury Goods
The global luxury goods market is expected to be fuelled by the augmented demand for premium cosmetics and beauty products. In addition, the increased uptake of omnichannel retailing is likely to encourage growth of the global luxury goods market further.
In addition, there has been a rise in the disposable income of people together with increased awareness about various skin-related issues. These factors have increased the consumer spending on various high-end skincare products such as Bobbi Brown, Mac, Estee Lauder and so on. Rise in the expanding base of aging population generates demand for premium anti-aging creams. Increased spending on such premium brands is likely to support growth of the global luxury goods market over the tenure of assessment, 2019 to 2027. To cater to the rising demand for such innovative and advanced skincare technologies and products, manufacturers are investing more into research and development activities, which is estimated to boost the demand for luxury goods in the years to come.
Overall, the jewelry and shoes are likely to emerge as leading revenue generating categories, trailed by beauty and handbags. Young consumers are estimated to exert substantial influence on the demand for luxury goods. To make the most of this trend, companies are luxury good producing companies are increasingly recognizing and acknowledging the differences in size and culture. A case in point is modest fashion and clothing worn by Muslim women accounted for a sizeable chunk of the global luxury goods market.
Global Luxury Goods Market: Geographical Analysis
The global luxury goods market is estimated to be dominated by the Chinese consumers due to high demand for luxury goods coupled with augmented purchasing power. Asia Pacific is estimated to emerge as a promising region for the market over the tenure of assessment.
Driven by the presence several luxury goods companies, North America is expected to rise to prominence over the forecast period. Rising disposable income has facilitated the increased overall spending by local Americans.
This study by TMR is all-encompassing framework of the dynamics of the market. It mainly comprises critical assessment of consumers' or customers' journeys, current and emerging avenues, and strategic framework to enable CXOs take effective decisions.
Our key underpinning is the 4-Quadrant Framework EIRS that offers detailed visualization of four elements:
- Customer Experience Maps
- Insights and Tools based on data-driven research
- Actionable Results to meet all the business priorities
- Strategic Frameworks to boost the growth journey
The study strives to evaluate the current and future growth prospects, untapped avenues, factors shaping their revenue potential, and demand and consumption patterns in the global market by breaking it into region-wise assessment.
The following regional segments are covered comprehensively:
- North America
- Asia Pacific
- Latin America
- The Middle East and Africa
The EIRS quadrant framework in the report sums up our wide spectrum of data-driven research and advisory for CXOs to help them make better decisions for their businesses and stay as leaders.
Below is a snapshot of these quadrants.
1. Customer Experience Map
The study offers an in-depth assessment of various customers’ journeys pertinent to the market and its segments. It offers various customer impressions about the products and service use. The analysis takes a closer look at their pain points and fears across various customer touchpoints. The consultation and business intelligence solutions will help interested stakeholders, including CXOs, define customer experience maps tailored to their needs. This will help them aim at boosting customer engagement with their brands.
2. Insights and Tools
The various insights in the study are based on elaborate cycles of primary and secondary research the analysts engage with during the course of research. The analysts and expert advisors at TMR adopt industry-wide, quantitative customer insights tools and market projection methodologies to arrive at results, which makes them reliable. The study not just offers estimations and projections, but also an uncluttered evaluation of these figures on the market dynamics. These insights merge data-driven research framework with qualitative consultations for business owners, CXOs, policy makers, and investors. The insights will also help their customers overcome their fears.
3. Actionable Results
The findings presented in this study by TMR are an indispensable guide for meeting all business priorities, including mission-critical ones. The results when implemented have shown tangible benefits to business stakeholders and industry entities to boost their performance. The results are tailored to fit the individual strategic framework. The study also illustrates some of the recent case studies on solving various problems by companies they faced in their consolidation journey.
4. Strategic Frameworks
The study equips businesses and anyone interested in the market to frame broad strategic frameworks. This has become more important than ever, given the current uncertainty due to COVID-19. The study deliberates on consultations to overcome various such past disruptions and foresees new ones to boost the preparedness. The frameworks help businesses plan their strategic alignments for recovery from such disruptive trends. Further, analysts at TMR helps you break down the complex scenario and bring resiliency in uncertain times.
The report sheds light on various aspects and answers pertinent questions on the market. Some of the important ones are:
1. What can be the best investment choices for venturing into new product and service lines?
2. What value propositions should businesses aim at while making new research and development funding?
3. Which regulations will be most helpful for stakeholders to boost their supply chain network?
4. Which regions might see the demand maturing in certain segments in near future?
5. What are the some of the best cost optimization strategies with vendors that some well-entrenched players have gained success with?
6. Which are the key perspectives that the C-suite are leveraging to move businesses to new growth trajectory?
7. Which government regulations might challenge the status of key regional markets?
8. How will the emerging political and economic scenario affect opportunities in key growth areas?
9. What are some of the value-grab opportunities in various segments?
10. What will be the barrier to entry for new players in the market?
Note: Although care has been taken to maintain the highest levels of accuracy in TMR’s reports, recent market/vendor-specific changes may take time to reflect in the analysis.