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How reaching the wealthiest population in the world?
December 11, 2023
One thing must be said: Luxury consumers are to be found in emerging markets. Indeed, China, India and UAE are the top 3 countries considered as huge luxury market potentials followed by EU, US and Japan. Today we explore their attitudes on how their purchase behaviour is changing.
The luxury goods sector has experienced significant evolution from 2010 to 2023, reflecting changes in consumer behavior, digital integration, and market growth. The future of luxury has become increasingly digital, with a Deloitte study highlighting that over 37% of consumers now see luxury items and technology as closely linked. This digital shift demands high-quality, personalized products at scale and emphasizes the importance of digital experiences in branding strategies.
Consumer behaviors in the luxury market have also transformed, demanding more from their shopping experiences. This includes a desire for more shopping channels, with 39% of consumers expecting home delivery options. Additionally, there’s a significant interest in loyalty rewards, with 44% of consumers expecting gifts, and 45% seeking personalized products and services.
International travel continues to play a crucial role in luxury purchases, with nearly half of such transactions made by consumers while traveling abroad. This trend is especially pronounced in emerging markets, where access to a wide range of products may be limited compared to mature markets. The overall luxury goods industry has shown robust growth, projected to reach €1.5 trillion in 2023, marking an 8-10% increase over 2022 and setting a new record for the sector. This growth is driven by consumers’ increasing demand for luxury experiences, especially as spending on such experiences has recovered to historic highs?.
Deloitte’s “Global Powers of Luxury Goods 2023” report also highlights the sector’s transformation towards an environmentally responsible, circular economy business model. This shift is propelled by consumer demand and increasing regulatory pressure, with technology like AI, machine learning, and the IoT revolutionizing customer experiences, sustainability, supply chains, and product authenticity. The luxury industry’s embrace of digital technologies is reshaping the luxury shopping experience, making it more personalized and engaging for consumers.
In summary, the luxury goods sector’s trajectory from 2010 to 2023 showcases a shift towards digital integration, personalized consumer experiences, and sustainable practices. With the market projected to reach new heights in 2023, luxury brands that adapt to these trends by leveraging digital technologies and catering to evolving consumer preferences will likely thrive.
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