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23 January 2023
Luxury buyers keep spending, but their profile is changing
Luxury purchase behaviourLuxury retailStrategy
Despite economic turbulence, luxury buyers’ enthusiasm for goods appears undimmed, but the places and people driving this are different from recent years.
Why it matters
Older shoppers and east Asian shoppers had been some of the key luxury spenders pre-pandemic, with this profile an important guide to where luxury brands should direct their growth efforts, but new data from Bain & Company suggests younger shoppers in old markets are the new big spenders.
Luxury continues to grow, with the total global luxury market growing between 19%-21% with goods the engine, the study finds.
The research compares and contrasts the impact of the pandemic with the 2008-9 global financial crisis, when the luxury market felt the turbulence heavily. It appears that now there is far less sensitivity to the wider economy in the sector.
The US was very strong in 2022, and along with the Middle East, provided a key tourist consumer group for European luxury stores (which remain key), even as some stores in Milan prepared for the return of high-rolling Chinese tourists with Lunar New Year motifs across its luxury stores.
Young consumers were also key, with the study suggesting that Gen-Z consumers are starting to spend on luxury younger than Gen-Y (millennials), though they remain critical: both these generations accounted for all the market’s growth in 2022.