The luxury macro trends

The macro trends of the luxury market revealed by a study by Bain & Co ♦ ︎

Are you dealing with the jewelry or gemstone business? Are you a jeweler, designer, retailer, a distributor? And maybe you sell your product around the world? Then you would do well to read this article, which summarizes the latest survey by one of the largest consulting companies, Bain & Co, on the world of luxury and jewelry.

The goal of Bain analysts was to understand what are the trends and how sales will go for luxury products, which in the last two years (2017 and 2018) have experienced strong growth with an increase of 6% last year, with sales of 293.63 billion dollars. The analysis is called Bain Luxury Goods Worldwide Market Study, Spring 2019

Here’s what Bain expects for sales in 2019: with another 6% growth (at constant exchange rates), and sales for 306.07 and for the following year 311.71 billion. In the United States and Canada, Trump’s tax reform has created uncertainty for consumers but predicts the growth of 2% -4%, with an increase in domestic purchases in full-price stores, but fewer Chinese tourists.

In Europe, despite the socio-political turbulence in the United Kingdom (Brexit) and France (gilet-jaune), there was has seen positive growth last year thanks to the influx of tourists stimulated by the weakening of the euro. But the geopolitical uncertainty causes a weakening of the macroeconomic prospects and represents a threat to the expenditure of luxury goods, with a growth forecast of 1 to 3% for 2019.

China continues to be a strong luxury market. According to Bain, the willingness to spend, especially for the younger generations, should determine year-on-year growth of 18-20% 2019. For Japan the growth forecast is from 2 to 4% in 2019 and should increase with the Olympics Tokyo 2020 next summer.

The consulting company has also focused on some trends: the first concerns Generation Z, those born in the new millennium: it will have a significant spending power and are impulse buyers, proud and empowered. But there is also a paradigm shift in consumption: sharing, rentals and the used market should grow.
Another strong trend is that linked to the environment, sustainability and social responsibility, which are increasingly central to consumers.
Alarm siren for retailers: digital will destroy the entire luxury value chain and focus attention on experiences over products. You are warned.