Three Trends Growing Luxury Sales in 2023
Luxury retail is facing another challenging year due to inflation & the state of the economy. The markets in Asia Pacific & the USA alone have reached their pre-pandemic levels for luxury consumerism and are driving the growth of global luxury right now. Overall, global sales are set to grow by 4% (1.2 trillion USD). In the Middle East, growth looks promising with the surge in oil prices, a new generation of rich, young shoppers have entered the market with 70% of shoppers in the Middle East increasing their purchases of luxury goods. After such dramatic changes over the past few years, brands are finding it difficult to understand how the industry is evolving and adapting, so we’ve identified 3 core trends pushing the growth of luxury this year.
Spending is geared more towards products vs. cars and experiences. With economic uncertainty, physical goods such as leather goods, jewellery and timepieces are accounting for the most growth in luxury spending, as the view of these goods has evolved. These goods are known for holding & increasing their value, so are being viewed as assets/investments.The growth in Asia Pacific & the USA alone have reached pre-pandemic levels for luxury consumerism and are driving the growth of luxury globally right now. Overall global sales are set to grow by 4% (1.2 trillion USD). With this in mind, approaching your product range with a perspective of ‘perceived value’, depreciating value and long term investment would align with these perspectives to encourage consumers to purchase.
The return of international travel. Although global travel flows are now sitting at approximately 85% of pre-pandemic levels, the return of Chinese visitors in luxury shopping destinations across the USA & Western Europe has grown back to pre-pandemic levels thanks to the end of the Chinese government’s ‘Zero Covid’ policy. This has evolved the partnership between hospitality & retail, resulting in curated, co-branded experiences from sought after international brands. One example of this is the Beverly Hills Hotel in Los Angeles, where guests can shop a limited edition Dioriviera capsule collection or book a special Dior beauty treatment and enjoy a poolside lounge on Dior-branded cushions, under Dior-branded umbrellas and another is the recent event featuring Saudi Designers at a Paris Fashion week event at the Ritz, where a range of dresses from Saudi Designers were on display as guests drank champagne & sampled hors d’oeuvres. Global sales of luxury hotels grew by a real 27% in 2022 with further real growth of 17% expected by the end of 2023.
The continued growth of the lifestyle sector. It comes as no surprise that as consumers were forced to spend more time at home in the past few years that this re-prioritized household spending, re-prioritizing investment into home space. Sales in the home design category are expected to grow by just under 2% this year, with further growth of 7% predicted over the forecast period. It is clear that there is a desire for consumers to surround themselves with branded household goods from their favourite businesses, so if you were considering expanding with household accessories items, there’s never been a better time.’
If you are looking to improve your sales in the luxury market this year, it’s not too late to get started. Get in touch to book a discovery call and we will help grow your business.
