Sales of luxury goods plummeted 23% last year, and while the market saw to growth in the first quarter of this year, a new report says it’s unlikely to return to 2019 levels of spending until next year.
Confidence: The rebound in the US has beaten expectations by some margin, thanks to a fairly upbeat economic outlook, a strong stock market performance, and increasing consumer confidence along with a fast vaccine rollout. Bain also notes new city hubs and a growing emphasis on suburban areas as well as “the rise of subcultural relevance and next-generation mindset”.
The human touch: Bain estimates over 85% of luxury buys were “digitally influenced” in 2021, but the human touch remains an important part of luxury, whether in-store or online. Such human interactions will remain vital for maintaining customer loyalty.
Pre-owned: Bain estimates this sector was worth €28 billion last year. The secondhand market now encompasses not just younger consumers looking to buy aspirational products, but also bigger spenders and collectors searching for top-end and collectible items. Brands increasingly see an opportunity to act as platforms here and play a part throughout the lifecycle of a product.
“Brands have been forced to rip up the playbook and innovate rapidly in light of the crisis. Winners will need to stay closely in touch with the key trends shaping the new normal lifestyle – all while remaining differentiated and creating a narrative that is true to their own culture” – Federica Levato, Bain & Company partner and co-author of the report.