While marketers in many countries are worried about a recession, there is also optimism regarding the business climate and marketing budgets.
LUXURY GOODS RETAILING
No cost-of-living crisis in the luxury goods sector, study finds
By our News Team | 2023
High demand is being driven by the rising number of high net-worth individuals and mass affluence globally, researchers say.
Despite so many consumers around the world struggling with rising inflation and higher prices, retailers of luxury goods say they’re having a field day because the growing wealth of a small elite is boosting sales.
A new study that interviewed 50 senior executives at major luxury retailers in in Asia, Africa, Europe, the US and South America predicts annual growth of more than 5.6% for the luxury retail sector over the next three years.
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In addition, senior executives are confident about rising revenues and margins at their firms and for the market as a whole.
The report was done communication technology company Communications Specialist Ltd, in conjunction with research agency Pure Profile.
Even though it may sometimes not feel like it, the researchers say there are a rising number of high net-worth individuals and growing mass affluence globally. Pent-up demand in the wake of Covid-19 is also a factor.
Personalised product offers are a sales driver
Of the executives interviewed, 31% said increased sales are down to more personalised offers from luxury retailers for clients.
In addition, almost all of those questioned (96%) believed revenues at their firm will be higher this year than in 2022, while 22% said they expect revenues to be 50% higher in 2023.
Price-cutting is not a factor. More than 90% of interviewees said margins this year will be higher than last year, and most believed margins will be higher than pre-Covid levels. Up to 40% said margins will be significantly higher than pre-Covid levels.
“The luxury retail sector globally is firmly on a growth path, with the market set to expand by 5.6% a year for the next four years,” said Kevin Buchler, Chief Marketing Officer at Communications Specialist Ltd.
“It is not simply a case of the post-Covid recovery, as executives point to the rising number of wealthy individuals worldwide – as well as increasing sophistication and personalisation of offers from retailers.”
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