Luxury is the opposite of necessity. However, we all need to indulge in some little luxuries from time to time. Shopping for luxury items, whether they are gifts for oneself or a friend, can be the best therapy when you have a bad day.
But the luxury retail industry is showing signs of stress in 2020. The industry’s strengths need to be regrouped as consumers change priorities and their opinions on what luxury is.
So let’s look at these luxury shopping statistics and find out where the industry is going and what the shoppers’ priorities are.
Top Luxury Shopping Stats for 2020 (Editor’s Choice)
- 40% of all spending on luxury goods is travel-related.
- The luxury goods industry is expected to experience a drop between 25% and 45% in 2020.
- According to luxury industry statistics, Italy is the source of more than 40% of global luxury-goods production.
- 78% of surveyed brands agreed that exclusive collaborations with relevant partners were one of their top three most active trends to lure luxury consumers.
- The second-hand luxury market size has shown a 12% growth rate.
- $32.22 billion is the brand value of LVMH or Louis Vuitton Moet Hennessy, which makes it the most valuable brand in the world.
The Basics of Luxury Shopping Statistics
1. 40% of all luxury goods spending is travel-related.
Such a significant portion of luxury spending comes from places like airports, duty-free shops, tourist destinations, and cruise ships. In regular times, this would’ve been just another fun fact.
But as global tourism and travel have almost come to a halt due to the pandemic, it is up to global luxury brands to rethink their strategies and understand their customers’ changing demands.
2. In 2020, the luxury goods market value reached $285.1 billion.
(Statista, Boston Consulting Group)
According to predictions, the luxury goods market will grow by 6.4% each year between 2020 and 2025. The impact of COVID-19 is yet to be seen, and the industry will have to adapt to the new conditions. The total luxury market value, including experiential luxury such as travel, was estimated at around $1 trillion in 2018.
3. According to luxury industry statistics, Italy is the source of more than 40% of global luxury-goods production.
As Made in Italy has radiated the aura of exclusivity and style for decades, Italian factories and small family businesses with years of experience have held the standard for luxury goods all over the world. However, many of these are shut down at the moment, so the future of the luxury retail industry is being compromised.
4. $51.8 billion is the brand value of LVMH or Louis Vuitton Moet Hennessy, which makes it the most valuable luxury brand in the world.
Louis Vuitton profit margins are higher than 30%, which makes it one of the most profitable brands. Handbags, shoes, trunks, and other accessories with its famous logo have kept it at the top of the industry for decades.
5. In 2020, Burberry’s brand value has been estimated at around $3.85 billion.
Of course, Burberry is in good company. It shares the space on the list of top 10 luxury brands by brand value with Chanel, Gucci, Rolex, Cartier, Dior, Yves Saint Laurent, and Prada. How does Burberry rank? It holds position number nine at the moment. Together with Rolex, it’s giving the British people a strong reason to take pride in their luxury industry.
6. Nike has a market capitalisation of $107.83 billion, ranking second on the list of the largest fashion companies in the world.
The apparel giant is followed by Inditex that owns brands such as Zara, Pull&Bear, Massimo Dutti, and Bershka. Next on the luxury heavyweights list is Dior, followed by Kering, Hermes, TJX, Richemont, Adidas, and Luxottica.
7. The sale of luxury goods is expected to drop between 25% and 45% in 2020.
Both the BCG and Bain have come to similar conclusions about the recovery of the luxury goods industry — the recovery will have to wait. The earliest estimates for recovery are expected in 2021, while there are the signs that the market will recover to 2019 levels in 2022 or 2023. According to predictions, the categories that are in the best position are skincare, makeup, footwear, and leather goods.
8. People spent an average of $2,500 on their last luxury purchase.
(Think With Google)
The report looks into new markets such as China, mature markets such as the UK and the Japanese market as a separate category. Luxury shopping statistics also point to Japanese consumers as the biggest spenders, with an average of $2720 spent during their last luxury purchase. On the other hand, consumers in mature markets spent around $2288.
9. The luxury fashion market size has reached $94.3 billion in 2020.
The luxury fashion industry makes up a large portion of personal luxury goods market revenue, covering around 23% in 2019 and showing a 5% growth compared to 2018. And if you’re wondering about shoes, they represented 7% of the personal luxury goods market in 2019.
Luxury Shopping Stats in the UK
10. The most popular luxury brand in the UK is Rolex, with 55% of UK respondents having a positive opinion on it.
The next most popular brands are Calvin Klein and Hugo Boss. Ted Baker and Harrods also made it in the top 10.
11. Only 5% of UK respondents stated that their motive for purchasing luxury items is keeping up with friends or family.
So, if keeping up with the Joneses isn’t the main motive for buying luxury goods, what is? According to the UK fashion industry statistics, 75% of UK consumers stated that quality was the deciding factor in purchasing luxury goods.
Almost half of UK respondents stated that they buy luxury items for special occasions. Interestingly enough, what Britons cared least about was celebrity endorsement.
12. The revenue of Chanel Limited was $9.6 billion in 2017, making it the most valuable UK-based luxury brand.
Although Chanel was often connected with France, after moving its offices to London, Chanel Limited has become the most valuable luxury brand based in the UK. Michael Kors is in the second place, with $4.7 billion in revenue.
Online vs In-store Luxury Shopping
13. 62% of affluent consumers say they prefer buying luxury goods in stores.
(GlobeNewswire, The UK Domain)
The fundamental reason behind this percentage is that affluent buyers (like many other buyers) want to be able to see the products live and try them out. Other reasons include worries about counterfeit products and the absence of a luxury shopping experience.
However, online luxury shopping statistics show that the UK can boast the highest percentage (20%) of luxury consumers with a preference for online luxury shopping.
14. Ecommerce luxury retail could make up to 30% of the luxury market by 2025.
Before the pandemic, ecommerce was the fastest-growing luxury goods sales channel. Between January and March 2020, online retail platforms witnessed a 6% global traffic boom. According to Bain’s Luxury Goods Worldwide Market Study, the online channel is something to watch out for in 2020 and beyond.
15. 100% of affluent luxury buyers use a smartphone, tablet, laptop, or a desktop computer.
(Think With Google)
Unsurprisingly, luxury buyers are more prone to online shopping than any other consumer category. It’s also worth noting that 75% of affluent luxury consumers (and this is from an older Google Insights report) research online before purchasing, which underlines the luxury companies’ need to keep pace with digital trends.
Luxury Shoppers Demographics
16. Millennials will be responsible for 130% of luxury market growth in the next seven years.
Millennials currently make up 32% of total personal luxury market spending. But this will change by 2025 when 50% of the luxury market will depend on millennials’ pockets.
17. 67% of Gen Z and 60% of millennials purchased a designer collaboration item or special edition.
(Boston Consulting Group)
The next generation of luxury shoppers appreciates authenticity and innovation. So, one of the leading new trends in luxury revolves around collaborations. There are often crossovers between high fashion and practical street fashion, tailored for the younger demographic. The trend has found particularly fertile ground in China, with 62% of consumers taking an interest.
18. $136K is the average income of the HENRYs, a significant new luxury consumer class.
The luxury brands market research shows a new crucial demographic. The acronym HENRYs stands for High-Earners-Not–Rich-Yet, and the luxury industry’s future depends on them. These are the people who have plenty of cash to spend, prefer online shopping, and are likely to become affluent in the future. Earning their trust and loyalty is the priority of luxury brands, as a part of HENRYs will become the top luxury consumer class one day.
19. The experiential luxury market growth rate is 5%, while the personal luxury market grows at a rate of only 3%.
(Matter Of Form)
The difference between experiential and material luxury is the difference between being and owning. The new generation of consumers spends more on experiences, like dining, travelling, drinking fine spirits and wine then on technology, furniture, and cosmetics.
Luxury shopping stats show that even the boomer generation is spending on experiences more than before, partly because they have already bought most of the luxury goods they wanted to possess.
20. The second-hand luxury market size has shown a 12% growth rate.
(Boston Consulting Group)
One of the top global luxury trends is the rise of second-hand or (in classier words) pre-owned luxury items. While the overall luxury market has a growth rate of 3%, the new generation of buyers is accelerating the second-hand luxury market growth rate.
According to surveys, 60% of luxury consumers are interested in purchasing pre-owned luxury items, and 80% of them buy their luxury pre-owned goods online.
21. 59% of True-Luxury consumers say that sustainability affects their purchasing decisions.
(Boston Consulting Group)
Although luxury used to be only about exclusivity and excess, luxury consumers’ values have been changing with the times. Some luxury shopping facts show that sustainability and the impact on animal well-being are becoming the deciding factor for a group of luxury consumers. And the numbers are far from negligible — 10% of True-Luxury consumers place sustainability in their top three luxury values.
22. 78% of surveyed brands agreed that exclusive collaborations with relevant partners were their top three most active trends to lure luxury consumers.
(World Retail Congress)
Whether they are artistic or product-based, collaborations will be the luxury brands’ top priority in the next five years. The reasoning behind collaborations is adapting to the new generation and making them more emotionally invested in the product.
23. 90% of surveyed luxury industry experts say luxury consumer technology sales will increase in 2021.
As lockdowns and remote working conditions demand both essential technology upgrades and innovations, experts predict that consumer technology sales will grow in the following period. This also goes for wearables such as health-tracking smartwatches and IoT technology.
24. 74% of luxury experts expect that wine and spirits sales will go up in 2021 compared to 2020.
Some luxury goods are more immune to recession than others, and wine and spirits certainly lead this group. The explanation for this lies in their stress relief powers, as they can help people facing increased stress levels and home isolation due to the pandemic.
25. 96% of luxury industry experts say that the luxury health and wellness segment will grow in 2021.
Luxury consumers’ priorities have changed with the pandemic. Now, home exercise, wellness, health technology, and preventive medicine are at the focus of luxury consumers. This goes for both the younger demographics and the boomer generation that now spends more money guilt-free.
This year, luxury shopping has undergone a substantial change. Consumers are focusing more on health, sustainability, artist collaborations, and ethical manufacturing. Perceived quality is the leading reason for buying luxury items, and consumers buy more pre-owned goods.
Although the luxury industry hasn’t remained immune to the global pandemic, some of its categories will experience growth in both production and sales. It remains to be seen what the future holds for the luxury industry and its consumers.
What is considered a luxury item?
While the economic definition of a luxury item does not explicitly cover its quality, what has usually been considered a luxury is an item of both the highest quality and the highest price. This usually covers goods such as technology, drinks, cosmetics, apparel, accessories, jewellery, and vehicles. These goods are considered highly desirable.
How much do luxury brands spend on marketing?
As the idea of marketing has evolved during the last decade, luxury brand marketing has had to lead the way in marketing innovations. For example, Kering, the owner of Gucci, invested 50% of its annual media budget on digital advertising in 2018. Knowing that some social media influencers charge up to $20,000 per post, luxury brands have to choose wisely.
What are the top luxury brands?
According to most criteria, the top luxury brand is Louis Vuitton that tops Forbes’ 2020 most valuable brand index. Another leading luxury brand is Gucci, and these two brands have been the only luxury brands to make it to the top of the list regularly since 2000.
What are the best shopping websites?
The best shopping websites for luxury goods are (in no particular order) Net-a-Porter, FarFetch, Sephora, Blueflym, Mytheresa, Moda Operandi, Revolve, Luisaviaroma, and Gilt. These sites have managed to capture the luxury shopping experience shoppers look for in stores, and project it to their ecommerce sites.
Where can I buy luxury fashion?
You can find luxury items on sites such as Net-a-Porter, or in stores in different cities. Moreover, if you are willing to look into second-hand luxury items, websites such as Fashionphile, Vestiaire Collective, and Rebag should be your first choice. Other options include off the rack offers that you can also find and enjoy online, as well as members-only shopping sites.
Which country is the largest market for luxury goods?
The country with the largest luxury goods market is the United States, with sales reaching $94.5 billion in 2020. Luxury shopping statistics show that the second-largest and fastest-growing market in the world is China, projected to reach $79 billion by 2027.
What is the cheapest luxury brand?
According to luxury goods market trends, Kate Spade New York is one of the cheapest luxury fashion brands that has a unique collection. Some other prominent, but affordable luxury brands are Jacquemus (known for its collection of bags), and Coach (has outstanding accessories collection and is compared to Michael Kors and Kate Spade). All these brands care about their shoes, clothes, and bags’ quality and durability, and their products are made to last.
- Boston Consulting Group
- Global Industry Analysts
- Luxury Institute
- Matter Of Form
- The UK Domain
- Think With Google
- World Retail Congress