Global luxury sales to exceed a record 880 billion euros by 2020
In the next six years the global luxury market will grow from 730 billion to € 880 billion euro, driven mainly by organic growth. The number of luxury consumers today at 380 million will increase to 440 million in 2020.
At the ” Altagamma Consumer and Retail Insight” event held by Altagamma today in Milan, the findings of two important reports were presented: Boston Consulting Group, “True Luxury Global Consumer Insight “ and Exane BNP Paribas , ” The Altagamma Retail Evolution” , both focusing on the evolution of the global consumer and retail development .
From the total of 380 million consumers, Boston Consulting Group identified 32 million consumers as “core “, who spend an average of 30 thousand Euros in personal luxury and experiential (self included) , representing approximately 40% of the total market value . The remaining are aspirational consumers , who invest up to EUR 2,000 per year. “Growth – explained Antonio Achilles, partner and managing director of Boston Consulting Group – will be mainly driven by core customers , with 10 million new customers in 2020 and increasing sales of EUR 85 billion .” The markets most affected will be the United States, followed by China , Europe and the Middle East .
A customer is not easy to detect because he is a globe trotter , attentive to the intrinsic values and provenance of products , very sensitive to word of mouth and social networks and immersed in the digital world that also uses for their purchases . In 2020 e-commerce will represent 15% in sales of luxury products (currently 5% ).
As the number of luxury consumers increases, a new era in retail distribution begins. From the beginning of the century till today, sales of luxury branded goods were strongly supported by retail expansion. However, the situation, has, in the meantime, changed. According to Andrea Illy (President Illy Cafe and President of Altagamma): ”we have reached a saturation of retail penetration, in many markets we can speak of canibalization”. Growth can only be achieved organically, the number of stores needs to be synchronized with the performance, i.e. sales per sqm.
Luxury companies are facing in mature markets a growing disaffection with the luxury : a million consumers said they plans to significantly reduce their purchases , especially of those products that do not longer meet the criteria of quality and exclusivity ( made in Italy remains a certainty in the fashion industry)
Boston Consulting Group has outlined 12 profiles ranging from Absolute luxury consumer to social-wearer and the fashionista. BCG urges luxury companies to plan very carefully the opening of shops and revising the format customizzandoli country and generation of customers