World Market for Luxury Goods: Green Initiatives and Social Responsibility have Reached a Critical Breaking Point

DUBLIN, Sept. 29, 2023 /PRNewswire/ -- The "World Market for Luxury Goods" report has been added to ResearchAndMarkets.com's offering.

The pandemic, cost-of-living crisis and inflation hikes continue to have an unprecedented impact on affluent populations, their wealth, and their spending habits on luxury goods. The top wealth segments stand out more now than ever before and remain the key consumers and drivers of luxury goods. This report provides a top-line overview of market performance and prospects across luxury goods and outlines key trends within the global luxury goods business landscape.

The World Market 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.

Key Findings

The challenging macro and geo-political environments continue to test the resilience of luxury goods

A high inflation environment, deglobalisation, climate change, the war in Ukraine, a slowdown in the Chinese economy, continued supply chain issues and decreasing consumer confidence will make 2023 another challenging year for luxury goods. In the largest markets, flexibility and agility will be key over the forecast period. Shifting attention to other regions for new pockets of growth, or as production or distribution hubs, is something companies and brands should consider in the short to mid term.

Consumption patterns and preferences are evolving as Gen Z and Gen Alpha become the biggest cohort

Gen Z and Gen Alpha will account for 45% of the global population by 2030, and will be the largest target segment for personal accessories brands. These generations' values and preferences are significantly different to those of their predecessors, and brands are being challenged to adapt their products, distribution, marketing and ways to engage with their consumers accordingly.

Digitalisation continues to push the boundaries presenting limitless opportunities for luxury brands

The share of sales through e-commerce reached 19% in 2023, signalling how technology continues to reshape luxury. From AI-driven personalisation tools, to virtual sampling, to omnichannel digital experience, to Web3, to virtual fashion shows, to the metaverse, companies and brands are being pushed to embark on a digital transformation in order to keep up with fast-changing consumer needs and wants.

Green initiatives and social responsibility have reached a critical breaking point

With the luxury goods industry facing escalating accusations of "greenwashing", companies and brands are challenged to transparently prove the results of their sustainability efforts. Greater attention is being paid to evolving consumer values and attitudes, as these will dictate demand for purpose-driven, environmentally-friendly products and services while rigorous measurements of all company activities alongside certifications from official organisations are vital to gain consumers' trust and to comply with stricter regulations.

Luxury lifestyle brands to drive untapped revenue, boost brand equity and build stronger customer relationships

In the aftermath of the COVID-19 pandemic, our perspectives on home, wellness and lifestyle have undergone a profound transformation. Consumers now attach greater significance to the spaces where they reside, work and relax. The home has become a central hub for various activities, and people seek to create enriching experiences within it. Simultaneously, beyond their homes, individuals also value memorable experiences with their loved ones, emphasising the importance of social connections and shared moments through luxury experiences.

Key Topics Covered:

State of the Industry

• Luxury market continues to bounce back amid a new economic reality, but discretionary spending continues to face unrelenting pressure
• Hong Kong reclaims its status as the luxury market with the highest per capita expenditure
• Tumultuous global economy challenges recovery across all regions
• Ongoing uncertainty in Europe is further disrupting the world's economy
• Recovery of performance across different categories continues to exhibit mixed results
• Luxury bags and leather goods continue to reign as leading alternative asset class
• Luxury experiences and lifestyles category offers major untapped growth opportunities
• Inflation rate forecast to moderate but remain above target in 2023-2024
• Five out of the top 10 global economies will be emerging markets
• Heightened significance of affluent consumers in emerging markets a mid uncertain times
• China and the US maintain their positions as the world's two leading luxury goods markets
• China's luxury market a catalyst for full recovery but concerns over slowdown pose threat
• China retains title as second largest population of wealthy and affluent individuals
• Repatriated shopping habits in mainland China now deeply ingrained and hard to break
• The US delivers its strongest year in actual value terms post-2020 recovery
• The US to remain the world's most important wealth market
• Recovery in travel remains in motion but macroeconomic challenges threaten its trajectory
• Tourist spending on luxury remains low, but numbers creep closer to pre-pandemic levels
• Digital transformation continues to accelerate
• Omnichannel strategy redefines luxury retail and forges the path a head
• Outlook for luxury retail development faces continued pressure due to economic uncertainty

Leading companies and brands

• Global top 10 powerhouses maintain commanding share in the luxury goods Industry
• M&A activity brings some of the biggest names in luxury and fashion together
• LVMH Moet Hennessy Louis Vuitton SA and Richemont SA both outperform the industry
• Acquisition of Tiffany & Co boosts LVMH Moet Hennessy Louis Vuitton SA ranking

Top trends shaping the industry

• Examining five trends shaping luxury goods
• Luxury goods businesses under pressure thanks to rocky geopolitical environment
• Sluggish growth and surging inflation pose risks to overall performance of luxury goods
• Examining the impact of rising inflation on luxury goods and consumer purchasing power
• US brand Steve Madden has shifted 50% of production from Asia to Latin America
• Business strategies are adapting to meet the needs of Gen Z consumers as they come of age
• Gen Zs to see record growth in gross income
• Heritage luxury brands thrive in age of trendsetting and social consciousness among Gen Z
• Luxury resort Ahau Collection introduces new NFT loyalty scheme to attract Gen Z tourists
• Digital transformation becomes a playground for luxury business development
• Continued acceleration of luxury e-commerce albeit at a slower pace of growth
• Gaming goes mainstream and increasingly crosses into the realms of luxury and travel
• Hugo Boss invests in greater personalisation with a new AI Digital Campus in Portugal
• Changing sustainability regulations put luxury brands under increasing pressure
• Inflationary pressures drive consumer exploration in alternative product access strategies
• Reviewing the role of goods through a "less is more" lens bodes well for heritage brands
• Luxury brands under ever-increasing pressure and scrutiny to improve their ESG practices
• Balenciaga joins the group of luxury brands venturing into resale with its Re-Sell platform
• Exploring new horizons for luxury brands to venture into home, hospitality and lifestyle
• Luxury lifestyle extensions to help sustain growth while tapping into new pockets of wealth
• Substantial wealth generation unlocks prospects and pushes boundaries of standard hospitality
• Cutting-edge luxury wellness clinics, spas and medical tourism continue to rise
• Dolce & Gabbana takes brand to the next frontier by moving into real estate development

For more information about this report visit https://www.researchandmarkets.com/r/cdelnv

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