The global luxury goods market is poised for an exceptional year in 2022, with accessories leading the way in double-digit growth. From leather handbags to jewelry and watches, these categories are experiencing impressive sales increases. However, there is another area of potential growth that shouldn’t be overlooked—the market for intangible products. According to a study by Bain & Co., this market is projected to be worth between €60 billion and €120 billion by 2030.
While all product categories have seen growth this year, accessories have emerged as the frontrunners. Leather goods and jewelry, in particular, have experienced significant sales boosts. Additionally, there has been a surprising surge in the watch market, with a projected growth rate of 22% to 24% in 2022. This is largely driven by the demand for premium products and iconic models. Watches are now viewed as a symbol of personal prestige and an investment opportunity, which has attracted younger consumers and breathed new life into the watch-making industry.
Jewelry brands have also made substantial investments, leading to an expected revenue increase of 23% to 25% in the jewelry market next year. Costume jewelry, in particular, has experienced robust growth. Leather handbags are estimated to generate €80 billion in revenue, with growth rates of 23% to 25% compared to 2021 and 39% to 41% compared to 2019. The success of this category can be attributed to the timeless appeal of certain handbag models and the popularity of “it bags” among Gen Z consumers. Brand reputation continues to be a crucial motivator for these purchases.
Luxury labels have implemented effective strategies to enhance their accessory offerings, offering a range of top-end and entry-level items without sacrificing volume growth. Accessories have shifted from being considered iconic to being viewed as valuable artwork worth investing in. Limited editions and unique pieces have contributed to this change in perception.
In addition to traditional luxury goods, there is also significant potential for growth in technology-based categories. Currently accounting for only 1% of the market, it is predicted that technology-based luxury products will make up 10% to 20% of the market by 2030, generating revenue of €60 billion to €120 billion. This includes the rise of 3D products and the possibilities offered by the metaverse, such as virtual replicas of clothing and virtual collectibles.
Alongside these technological advancements, there are other avenues for growth for luxury brands. This includes monetizing social media communities through virtual events, leveraging customer databases, and generating revenue from media content, such as films, music, and art. There are also opportunities for web 3.0 experiences in physical stores, as well as in travel and ultra-luxury hotels.
Overall, the luxury sector has the potential to become more sustainable by embracing intangible products and producing less. This shift could position the industry as a revolutionary force at the forefront of culture. With the continued growth of accessories and the emergence of new categories, the future of the luxury goods market looks incredibly promising.
Sources:
– Bain & Co. Luxury Market Study
– BCG Article on Younger Consumers and the Luxury Market
