The pandemic, cost-of-living crisis and high inflation continue to have an impact on affluent consumers, their wealth, and their shopping habits on luxury goods. Offline retail maintains its importance alongside e-commerce, as luxury consumers demand seamless integration of online and offline channels, leading to store renovations. E-commerce is projected to outperform offline channels, and generative AI as well as re-sell and “third space” retail holds promise for the future of luxury goods.
Key Findings
Macroeconomic Factors Continue To Weigh Heavily On Industry Recovery
The global luxury goods industry continued on its road to recovery in 2023 with 4% year-on-year growth, driven by Asia Pacific and the US. However, challenges persist as it moves into 2024 thanks to slower global growth and high inflation, teamed with ongoing energy pressures, rising cost of capital, tight labour market, geopolitical risks and a reset of globalisation.
Blurring The Boundaries: Seamlessly Fusing Online And Offline Shopping
While luxury consumers still expect the convenience of e-commerce, they also seek a high level of customer service and distinctive experiences that only brick-and-mortar stores are able to deliver. In this context, building an omnichannel presence has become paramount for luxury retailers, including digitally native direct-to-consumer (DTC) brands and retailers.
The Emergence Of Interactive And Tech-Driven Enhanced In-Store Experiences
Offline channels experienced a revival as luxury consumers embraced in-store shopping again. To cater to consumers’ emerging expectations for in-store shopping, companies are prioritising store renovations and the incorporation of technology.
Leveraging Technology For Enhance Customer Experience, Streamlined Processes And Completeness
In 2023, e-commerce accounted for 18% of sales, just slightly up from the 17% in 2022 but significantly higher than the 10% recorded in 2018. Luxury retailers and brands are prioritising omnichannel strategies, delivering seamless online and offline experiences, and enhancing the online shopping journey through innovative techniques, such as personalisation and AI.
E-Commerce's Dominance And The Rise Of Generative AI, Re-Sell And The Future Of Third Space Retail
Challenges persist for the industry’s growth in the five years to 2028, including high inflation, and the war in Ukraine. E-commerce is projected to outperform offline channels, diminishing the market share of physical stores. Generative AI holds promise for product innovation, as well as the re-sell model and “third space” retail as luxury looks towards future innovations.
The Where Consumers Shop for Luxury Goods global briefing offers an insight into the size and shape of the luxury goods industry, highlights buzz topics, emerging trends as well as pressing industry issues, their effects on luxury goods retailing in markets around the world and on the development of consumers’ shopping patterns. Forecasts illustrate how the market is set to change and criteria for success. In short, it identifies the opportunity zones within luxury goods industry
Product coverage: Experiential Luxury, Fine Wines/Champagne and Spirits, Personal Luxury, Premium and Luxury Cars.
Data coverage: Market sizes (historic and forecasts), company shares, brand shares and distribution data.
Why buy this report?
- Get a detailed picture of the Luxury Goods market;
- Pinpoint growth sectors and identify factors driving change;
- Understand the competitive environment, the market’s major players and leading brands;
- Use five-year forecasts to assess how the market is predicted to develop.
Table of Contents
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- LVMH
- Nona Source
- TikTok
- Douyin
- Alibaba