Lifestyle

New Study Predicts Luxury Sales Will Outpace Pre-Pandemic Levels

Despite the pandemic rocking the globe over the past two years, the luxury goods sector is booming. In fact, it is set to move past the coronavirus crisis this year, thanks to the amount of spending taking place in the U.S. and China.

Personal luxury goods like high end shoes, leather goods and jewellery are growing like never seen before. According to consultancy Bain, these goods are on track to reach 283 billion euros (or $327 billion) at the end of 2021. This means the sector has bounced back from the pandemic crisis with a 4% increase.

What is Luxury Retail?

What is luxury retail? Over the past few years especially, customers are becoming more and more discerning in their purchases. The forces that influence their buying choices go far beyond a logo and a product. It’s about the value. It’s about what something is worth to the individual.

Where does this value come from? It doesn’t come from the brand name, rather what it represents: heritage, craftsmanship, exclusivity, authenticity, to name a few. It all boils down to how it makes the customer feel. Brands have to really know their customers to make that kind of personal connection. Thus, luxury retail is all about personalized experiences; that includes across all channels, from in-store and digital to social media and more.

Largest Players in Luxury Retail

LVMH, the conglomerate that owns labels like Louis Vuitton, Christian Dior, is one of the largest players in the industry. Kering too is a major part of the luxury goods sector, owning labels like Gucci and Saint Laurent. They have already recovered strongly from the health crisis, surpassing 2019 levels of business as the economy strives to get back “to normal”.

These brands and many others are zeroing in on how they can meet their customers where they are today. Choosing to pivot and adapt wherever and whenever necessary to cater to consumers, not only in top luxury hubs but also in second and third-tier cities.

“Brands are attracting a new customer base with strong marketing and online campaigns, while existing customers are buying more,” says Bain partner Federica Levato, co-author of the recent study.

And what does the future hold? According to the data, shoppers under the age of 40 are expected to account for more than 60% of luxury purchases at the close of 2021. That number is predicted to increase to more than 70% by 2025. The focus of creating a unique experience from online campaigns to the checkout process will be key in the months to come.

Payment industry guru Taylor Cole is a passionate payments expert who understands the complex world of smarttrade app. He also writes non-fiction, on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie with ice-cream on his backyard porch, as should all right-thinking people.