Bain & co report: luxury industry exceeds €1tn← Back
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Image - Harrods, London
Global management consulting firm, Bain & co has published its "Luxury Goods Worldwide Market Monitor" report, which was produced together with Fondazione Altagamma.
The report revealed that the global luxury industry has made over 1 trillion euros in retail sales in 2015. Luxury cars, luxury hospitality and high-end personal goods represent the largest sectors of the market. In 2015, luxury personal goods saw slow growth of 1 to 2%, reaching 253 billion euros.
The top luxury consumers are the Chinese, who stand for 31% of purchases made. They are followed by Americans at 24% and Europeans at 18%. Meanwhile, in the past year, Russians and Japanese both decreased spending in Europe, by 37% and 16% respectively.
That said, despite the Russian and Japanese cut backs, Europe is still a favourite destination for luxury shopping as consumers from Asia and America are able to make the most of the weak euro and tax-free shopping.
"For the last several years, we've referenced ‘luxury's new normal' with a deceleration of the personal luxury goods market. Now, we are starting to feel the impact of that slow-down. The challenge for luxury brands in this environment is how to successfully navigate through hard-to-predict volatility." said Claudia D'Arpizio, a lead author of the study, in a release.
As the luxury market adapts to the digital world, there’s been a rise in online shopping: e-commerce now represents 7% of the market. This may still only be a small figure, however it is one that has doubled since 2012. Airport retail is also growing rapidly.
The report highlights that one of the biggest challenges for luxury brands is pricing: in an age of globalization and e-commerce customers are becoming increasingly savvy about price differences. D'Arpizio said: "Relentless price increases over the last decade, aimed at creating a more exclusive position in the market and maximizing touristic flows are now starting to backfire on luxury brands." She explained that, in order to have a secure future, brands need to now focus on rebuilding trust with customers.