One figure: 1,500 billion euros! That's the weight of the global luxury goods market in 2023, representing growth of 8-10% compared to 2022, and setting a new record for this sector, which continues to demonstrate its unrivalled resilience.
Faced with luxury experiences, brands are forging ahead, and the forecasts are up to the task: the luxury goods market is expectedgrowth of 2 to 4% in 2024, with regional and national variationsaccording to an analysis by McKinsey.
Better still, growth is sustainable, and could last until 2030, saccording to experts at Bain & Company, with a sustainedsustained growth rate of 5 to 7% a year. The global luxury goods market will then more than double between 2020 and 2030!
Trends that will shape 2024
Increased digitalization
Luxury brands continue to invest in digital to reach new customers and offer exclusive online experiences, while preserving the exclusivity and ancestral craftsmanship associated with luxury.
This can take the form of expanding their presence on foreign marketplaces, for example, especially on powerful platforms such as Farfetch, which cannot be ignored.
Growth driven by emerging markets
Emerging economies, particularly in Asia (such as China and South Korea, which leads the way in terms of spending), continue to be major growth drivers for the luxury goods market, with increasing demand for high-end products.
This buoyant demand for luxury products can be explained in two wayspurchasing power and the desire to display social status.
A commitment to the customer experience
Luxury brands focus on exceptional customer experiences, whether online or in-store, offering personalized services, exclusive events and high-end interactions.
At Balmain, for example, by purchasing Unicorn sneakers co-signed by artist Ant Kai, customers can personalize their pair of sneakers online. An operation in keeping with the fashion house's 3.0 approach.
The famous fashion house has also introduced personalized and virtual fittings on its e-commerce site, thanks to a collaboration with the Bods company.
Customers can try on, style and accessorize their favorite brand's pieces virtually via personalized 3d avatars - the level of detail is impressive!
Sustainability and responsibility
Sustainability and social responsibility are becoming increasingly important concerns for consumers of luxury goods. Brands are seeking to respond to this demand by adopting sustainable practices in their production and sourcing. The virtual fitting mentioned above is just one example of Balmain's commitment to sustainable development.
A poor fit is responsible for around 70% of returns on online fashion purchases. The adoption of this kind of technology supports online customers more effectively. With fewer returns, less waste and lower shipping and transportation costs, Balmain is able to significantly reduce its carbon footprint.
Product innovations and collaborations
Luxury brands continue to innovate with new products, exploring collaborations with artists, designers or other brands, creating unique and sought-after collections.
Olivier Rousteing, the famous Balmain designer, never fails to inspire his community., 10 million followers on Instagram, with exclusive collaborations. He notably dressed Beyonce during her latest world tour.
In 2024, Balmain will also be a cosmetics brand thanks to a partnership with Estée Lauder.
Exclusive and rare
Rarity and exclusivity remain pillars of the luxury market, with brands continuing to create exclusive products and experiences to maintain their appeal to consumers.
The stakes are high!
Adapting to digital technology
Although the luxury sector has traditionally favored physical stores, adapting to e-commerce and digital platforms remains a major challenge. Brands need to create online experiences that preserve the exclusivity and high-end aesthetics associated with luxury.
Online brand image management
Controlling brand image and preserving exclusivity in the face of online proliferation can be a challenge. Luxury retailers need to maintain a consistent, high-quality presence on social networks, e-commerce platforms and digital media, while preserving their aura of exclusivity.
Protection against counterfeiting and cybercrime
Luxury brands are often targets of counterfeiting and cyber attacks. Protecting intellectual property and customer data is central to maintaining consumer confidence and protecting brand integrity.
One example is LVMH (owner of over 70 luxury brands), which, to combat this scourge, has developed a private blockchain whose main objective is to guarantee the traceability and authenticity of luxury products.
Supply chain management
Luxury retailers need to ensure transparency and accountability in their supply chains to meet consumers' growing expectations in terms of ethics and product traceability.
Indeed, the lessons learned from the pandemic have prompted fashion and luxury companies to review their supply chains in depth. They have done so by working more closely with their suppliers to increase flexibility, and by integrating a more sustainable approach.
It promises to be a rich and ambitious year for luxury retailers, who are sure to be at the rendezvous once again.
By Sarah Carbelsenior consultant specialized in Luxury