Global sales of luxury goods will increase between 3 and 7 percent each year between now and 2014, while spending on luxury experiences is projected to grow 12 percent, the latest study from the Boston Consulting Group (BCG) shows, according to www.nationaljeweler.com.
According to the study, these figures assume no new major economic crises develop worldwide.
The low-end growth figure, 3 percent, includes a 3 percent drop in the gross domestic product in emerging markets and a 2 percent drop in GDP growth in the United States, Europe and Japan.
“Overall, the next few years will show slower growth for luxury goods and services than the 2010-2011 period, which saw a ‘catch-up’ surge in sales following the 2008-2009 slump,” the study states.
BCG’s study was conducted in 2011 with research specialist Ipsos and the International Luxury Business Association, polling about 1,000 affluent individuals in eight mature countries, including the United States, and the four emerging BRIC countries, Brazil, Russia, India and China.
Other highlights of the study include:
- Experiential luxury, defined as luxury that is tied to experiences such as vacations, spas and even high-end hospital accommodations, now accounts for almost 55 percent of luxury spending worldwide and grew 50 percent faster than sales of luxury goods year-over-year. In the United States, Europe and Japan, this is due to the aging of consumers who drove the luxury boom in the 1990s. They are now at a life stage where they don’t need or want to own more “things” and are instead opting to spend their money on experiences.
- Luxury consumers’ values are evolving, with value, family and wellness becoming more important to consumers in every country surveyed. A crucial contributing factor to this shift, in addition to questions raised by the financial crisis, is the “fading boundary” between luxury and mass markets, with capsule collections for high-end designers now available at H&M and Target and the rise of new distribution channels for luxury goods at discount prices. Today’s consumers are “longing for something special in a world of mass production, and they place a greater premium on connoisseurship, quality and authenticity than on status,” the study states.
- By 2015, China will become the world’s largest luxury market. An evaluation of eight luxury houses between 2008 and 2011 shows a 42 percent increase in the number of stores in Asia at that time, compared to a 5 percent increase in North America, 28 percent rise in Asia and 31 percent increase in the rest of the world.
- Over the past year, luxury brands’ focus on digital media has increased. As one example, the study cited the increase in the number of fans following luxury brands on Facebook between February 2010 and May 2012. Among the brands cited were: Tiffany & Co., where the fan count increased from 152 to 2,194; Bulgari, 19 to 697; Cartier, 33 to 690 and Chopard, 1 to 183.
