Generations Y and Z drive rebound in luxury market
Luxury is back in fashion, the retail channel growing 8 percent in 2017. The overall luxury market, including both goods and luxury experiences, grew by 5 percent to an estimated €1.2 trillion globally this year, and this all thanks to young shoppers and to a constantly growing demand from Chinese customers according to a report released by the consulting firm Bain & Co.
"We started to see stronger momentum in the first half of the year, and this has continued in recent months allowing the market for personal luxury goods to really regain its lustre," said Claudia D'Arpizio, a Bain partner and lead author of the study, in a press release.
Chinese nationals are now accounting for nearly a third of global personal luxury purchases, according to Bain and Company, due to increased purchasing abroad and at home.
Europe continues however to be among the top regions for luxury retail sales, with the total expected to rise 6 percent to 87 billion euros.
If previously the older generation was among the essential luxury products buyers, today the consumers born after 1980 lead the luxury goods market.
and generation will account for 45% of the global personal luxury goods market by
2025, the study reveals.
“This power shift between generations, away from the baby boomers towards younger shoppers, means the latter are now the growth engine of the market in every region globally,” she said in an interview. “In order to recover following the downturn, brands had to strategically reposition themselves towards this new demographic and their state of mind and distinct product and shopping tastes. But what has proven particularly interesting is how those habits and preferences are now shaping those of other generations, too.”
This trend may be explained by a strong presence and ads of luxury brands on social media platforms like Instagram and Snapchat. Heavy investment also has gone into luxury streetwear, like sneakers, sliders.
Pop stars and social media influencers promoting luxury brands are also considered to be a key point of the success.