“After a lost year, consumers are ready to travel, dine out and shop” — Paul Ebeling
The personal luxury market of high-end accessories, leather goods and apparel has snapped back to pre-VirusCasedemic marks as US shoppers and those in China chase the latest fashion trends, according to a study released Thursday by the Bain Capital consultancy.
Global consumer spending on personal luxury goods is forecast to spike by 29% this year, to $325-B. That is a return to Y 2019 marks and a reversal from the gloom of the Y 2020 world wide draconian lockdowns that shuttered stores and halted international travel.
The recovery will be supported by a very strong holiday shopping season, Bain said.
Our work also says luxury consuming is positive, as China has been and still is very strong. The recovery is V shaped for personal luxury goods.
The global luxury market, which extends to high-end travel, dining, fine art, furnishings, and supercars still lags Y 2019 levels. Christmas holiday sales should catch up and exceed that mark in Y2022
Consumers have shifted spending to high-quality things, as many have been spending time at home instead of globe-trotting, while travel restrictions have been especially hard on luxury hotels, fine dining and cruises, all sectors are on the path to fully recover.
We see global luxury overall reaching $1.27-T this yr, that is about 10% below Y 2019 marks. The hardest-hit sector is luxury cruises, with spending down 80% from pre-VirusCasedemic levels. Still, strong bookings for Y 2022 offer hope.
With international tourism still hampered, consumers have started picking up their new fashion trends at home, instead of fueling duty-free sales abroad, that will change as the world opens up.
US consumers have temporarily bested the Chinese as the biggest spenders, accounting for 34% of all sales this yr, compared with about 23% by Chinese shoppers, who were on par with Europeans.
That trend is expected to invert by 2024-25, with nearly 50% of all spending by Chinese consumers, just over 20% by Americans and 18% by Europeans.
The Bain forecast: Tourism will rebound by the end of next year to mid-2023, but with luxury shoppers doing a lot of spending at home and online, not necessarily abroad.
We expect tourist to come back in droves and to be as relevant as before.
The VirusCasedemic has accelerated the shift to online shopping and reinforced the predominance of the bigger brands in the marketplace, while encouraging the use of collaborations and digital campaigns to garner attention, as the bigger brands have more presence and money.
In this way, they have exploited connections within larger conglomerates, like the Gucci and Balenciaga tie-up between the 2 brands owned by French group Kering, and Ferrari’s collaboration with Armani.
Have a prosperous day, Keep the Faith!