Generational trends, emerging markets, and the influence of art are all factors contributing to the resilience of the luxury industry. Despite challenges such as the health crisis, financial instability, and geopolitical tensions, the luxury sector continues to experience strong growth. According to the latest report from Bain & Company and Altagamma, global revenues in the luxury industry are expected to reach 1.4 trillion euros this year.
The report reveals that the high-end market has proven to be attractive and has generated a positive increase in revenue for 95% of luxury houses. Companies like Ferragamo, Kering, and Hermès have experienced double-digit growth in recent months, further reinforcing the positive outlook for the luxury market. It is predicted that the global luxury market will grow by 21% in 2022, reaching a value of 1.4 trillion euros. Additionally, the personal luxury market is expected to grow by 22% to 353 billion euros compared to the previous year.
While inflation and rising costs may slightly impact the profitability of luxury houses, these companies have continued to invest in order to ensure their growth. The luxury market of 2023 is expected to be more resilient to recession compared to the global financial crisis of 2009. According to the report, there are two possible scenarios for growth in 2023: an increase in personal product sales of 3% to 5%, which could rise to 6% to 8% depending on the recovery in China and the strength of the United States and Europe. By 2030, the report predicts a growth of 60% in the personal goods market, reaching a value of 540 to 580 billion euros.
Looking ahead, future luxury trends are expected to be influenced by the increasing number of luxury consumers and the spending habits of Generation Z and Alpha. It is projected that spending by these generations will increase about three times faster than other generations, potentially representing a third of the market by 2030. The report highlights the importance of experiential and VIP strategies in order to create strong communities, drawing inspiration from the concept of “Guilded Luxury” developed by The Future Laboratory. The integration of sporty and inclusive characteristics of streetwear with the technical innovations of luxury brands is also emphasized.
Artistic and artisanal elements, which have always been closely linked to the luxury world, will continue to play a prominent role in the development of collections and brand projects. The report also emphasizes the importance of a 3.0 omnichannel retail approach, blurring the lines between physical retail and online channels. This approach allows luxury brands to provide seamless experiences to their customers.
Lastly, Bain & Company and Altagamma have identified new markets with strong growth potential. While the US, Europe, and China remain solid and stable markets, regions such as Korea, Africa, and India are expected to embody the future of luxury development. These markets have the potential to more than triple in size by 2030.
Useful links:
– Bain & Company – Luxury Goods Worldwide Market Study 2022
– Altagamma
