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1、 499February 2023RXSLX23RPGlobal LuxuryRetailXIn partnership with:20232|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONThe luxury sector has always been the epitome of elegance,sophistication and exclusivity,catering to a segment of consumers who are willing to pay for premiu
2、m products and experiences.But that has been shaken up,first by the impact of the pandemic,then by a recovery phase that has occurred against a backdrop of increasing economic turbulence.The fact that the sector has come out ahead of its pre-pandemic level is testament to how well it has adapted to
3、a changing world.More consumers than ever now see luxury items not just as status symbols but also as investments and as a means of helping lessen their impact on the environment.This has seen a growing number of younger people engaging with luxury brands.It has also seen an explosion in sales acros
4、s the markets of Asia,not least in China.This changing demographic is forcing the luxury sector to re-evaluate how it operates,pushing it to be an exemplar of both traditional high-end,instore experience as well as being at the vanguard of digital technology.From mobile social selling through to the
5、 metaverse,such innovations make the luxury sector a test bed for how the wider retail world might operate.In this report,we get a snapshot of a sector in flux and one that is pointing the way to the future of retail in a very changed world.Ian Jindal,CEO,RetailXContentsFeaturedThe global luxury mar
6、ket 2023 03Regional breakdown of the sector 07Consumer demographics and behaviour 13Consumer devices and channels 19Global luxury and sustainability 24The largest 50 global luxury brands 32Partner perspective 38Company profile:Este Lauder 40Company profile:FarFetch 41Company profile:Kering 42Company
7、 profile:LVMH 43Company profile:Richemont 44Company profile:Rolex 45Company profile:Swatch 46Company profile:Vestiaire Collective 47Case study:Burberry 48Case study:Kurt Geiger 49Case study:The Edit LDN 50Case study:Tmall Luxury Pavilion 51Next steps and developments 52Figures 56End piece 58GLOBAL L
8、UXURY SECTOR REPORT|INTRODUCTION&CONTENTSIntroductionHigh net worth consumers in Asia hit an all-time spending peak in Q1 2022Page14European and Asian consumers are also more prepared to pay more for more sustainable and ethical goodsPage26Gen Z shoppers starting to shift from throw-away fast fashio
9、n to fewer items of Luxury goodsPage053|RetailX|February 2023RXSLX23RP 2023 ,Luxury has made a remarkable post-pandemic recovery worldwide,although that change has seen the industry shiftThe global luxury market 2023SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|THE GLOBAL LUXURY MARK
10、ET2022 was a pivotal year for the global luxury sector,with total revenues from sales across all segments totalling pre-pandemic levels.As of 2022,the market covering fashion apparel,cosmetics,footwear,accessories,eyewear and leather goods topped$312bn,a level not seen since 2019,which itself was a
11、year notable for the luxury sector hitting its highest ever level(Figure 1).This shows that,despite the drag on the market inflicted by the pandemic in 2020 and to,some extent,2021,the sector has done a remarkable job of bouncing back.In 2021,a year partially blighted by lockdowns and hampered by th
12、e continued curtailment of the travel sector,the luxury market worldwide managed to match 2018s performance.Indeed,across the US and Asia,the luxury sector has consistently outperformed the non-luxury market for fashion,footwear and accessories,often by between 20%and 30%1.Per capital spending on gl
13、obal luxury,however,remains muted,sitting at around 98%of its 2019 level(Figure 2).This indicates that luxury spending has been hit by inflation and that spending is restricted to a smaller number of luxury shoppers in all regions.This is particularly true in Asia,where per Figure 1:Sector revenue h
14、as recovered from the pandemicLuxury goods revenue,by segment,$bn,2014-2022Source:Statista Consumer Market Insights86788083946475057625263666766468544950535762000212022Prestige cosmetics&fragrancesLuxury watches&jewelleryLuxury leather goodsLuxu
15、ry fashionLuxury eyewear2020209RetailX 2023Source:Statista Consumer Market InsightsPrestige cosmetics&fragrancesLuxury leather goodsLuxury watches&jewelleryLuxury fashionLuxury eyewearFigure 2:Luxurys leather goods and eyewear are the only segments to fully recover pre-covid levelsLuxury
16、sector revenue per capita,by segment,$,0002407.76.97.07.37.88.36.87.48.57.68.28.98.69.08.28.18.69.56.96.46.56.911.011.111.512.413.011.512.312.812.22.82.72.82.62.62.62.12.52.37.78.47.08.38.7RetailX 20234|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILI
17、TY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|THE GLOBAL LUXURY MARKETFigure 3:Asia is the most valuable region for luxury retailersSource:Statista Consumer Market InsightsRetailX 202386828590929580948976672792000202021202270 80 90 100 110 1
18、20 Luxury goods revenue,by region,$bn,2014-2022AsiaEuropeNorth Americacapital spending is the lowest of all regions,despite the this one generating the highest luxury goods revenues(Figure 3).The USA,conversely,is the top country for the luxury sector by revenue,followed by China,Japan,France and UK
19、.EUROPE STRUGGLESEurope overall,however,has continued to lag behind the market in China and the US.While these other two regions continue to grow at an impressive rate and are predicted to do so into 2023 and 2024 Europes luxury market is,in fact,in decline.The reasons are two-fold.Europeans have so
20、 far been hit harder than US and Asian consumers by the cost-of-living crisis.While 2023 may well see this situation change,for a large chunk of 2022,consumers across Europe have seen higher inflation and higher energy prices,which have both suppressed discretionary spending.The second,more signific
21、ant,reason is that many of the sales of luxury goods that took place in Europe were to shoppers from China and the US.Traditionally,luxury goods have been anything up to 50%cheaper to buy in Europe than in mainland China.A strong dollar and large markups to cover import duties and taxes have kept pr
22、ices of European luxury artificially high outside Europe,which had been the key driver of high rates of tourist luxury spending.The pandemic and its curtailment of travel changed all this.To maintain sales in these regions,prices fell and local consumers have since got used to buying luxury locally.
23、This has seen European luxury sales Source:Statista Consumer Market InsightsFigure 4:The European region leads in luxury fashion revenueRevenue of luxury fashion segment,by region,$bn,2014-2022RetailX 202318.217.418.820.422.925.424.024.828.535.030.230.932.936.436.832.536.534.925.925.124.624.625.727.
24、824.725.927.920002020212022AsiaEuropeNorth America5|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|THE GLOBAL LUXURY MARKETSource:Statista Consumer Market InsightsFigure 5:North America leads luxury eyewear sales,but the categ
25、ory has yet to fully recover to pre-Covid levelsRevenue of luxury eyewear sales,but the category has yet to fully recover to pre-Covid levelsRetailX 20232.82.62.52.42.52.72.22.42.85.34.64.75.05.55.74.65.55.29.410.210.79.99.39.57.78.49.220002020212022AsiaEuropeNorth Americadrop,
26、which has encouraged non-European luxury brands and retailers to expand into China,the rest of Asia and the US.However,this paints something of a misleading picture.While the overall luxury sector is seeing strong growth in Asia and the US,individual segments are performing differently within each r
27、egion.Europe,for example,still leads in terms of spending on luxury fashion(Figure 4),while the US leads the world in luxury eyewear spend(Figure 5).LEARNING FROM PRE-PANDEMICThe bounce-back of the sector to pre-pandemic levels one that was a peak of luxury selling is highly significant,offering bot
28、h an insight into the direction of travel of the sector across the decade,as well as how the industry will move forward in the years ahead.Luxury saw a renaissance in its fortunes across 2017 to 2019,driven by the industry actively shifting to omnichannel retailing,augmenting its traditional physica
29、l retail model with online and particularly mobile.This was done to both service a growing number of younger luxury shoppers,as well as looking to attract more of the same to buy luxury.This move coincided with the rise in millennial and Gen Z shoppers starting to shift from throw-away fast fashion
30、towards looking at one-off,higher value fashion and accessory purchases both as a mark of their own individual style and affluence and an antidote to the rising fever of environmental concern.These two forces combined to create a powerful,younger demographic of shoppers inspired largely by the image
31、 projected by buying certain luxury brands,rather than simply because the items were expensive.The luxury market has been,for most of its lifespan,dominated by older,high-wealth shoppers.These traditional customers,however,are ageing and dying.Up until the 2010s,nothing much was done to attract new,
32、younger consumers into the market for luxury,creating a shrinking global customer base.A move to actively attract these younger shoppers by offering them omnichannel,social media influence and through green initiatives,was slow to catch fire but by 2019,had finally seen a massive rise in the sectors
33、 fortunes.This move took a hit in 2020 as the pandemic saw spending halted through the shutting of shops and the grounding of transport.Those early omnichannel moves seen in 2017 to 2019 were suddenly seen as vital to survival and many luxury brands rapidly shifted online to plug the sales gap.As th
34、ey perfected this across 2020 especially the use of social media and influencers to shift pre-used,recycled and rented luxury apparel so the on-boarding of younger luxury shoppers accelerated.This goes a long way to explaining why the luxury sector returned to it pre-pandemic peak so rapidly and why
35、 it looks set for continued and sustained growth throughout 2023 and beyond.6|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|THE GLOBAL LUXURY MARKETGEOPOLITICAL FACTORSThe luxury sector is,like any retail sector,affected by global geopolitical eve
36、nts.While the impact of Brexit is still being felt,the fallout of the pandemic in China and the Russian invasion of Ukraine are now the two dominant global factors affecting the industry.For the early part of 2022,the Chinese market was constrained by ongoing pandemic lockdown and isolation measures
37、.This saw footfall to all retail,including luxury,decrease and led to muted sales in the region.It also resulted in the growth in online sales of luxury which,thanks to the global nature of ecommerce,had an impact across all luxury sellers,regardless of location.The subsequent lifting of restriction
38、s in China is likely to see a rise in luxury sales as footfall returns to stores.There is a note of caution,however.The surge in Covid-19 cases seen in early 2023 as restrictions have been lifted could impact shopper behaviour,either forcing some consumers back into self-imposed isolation,or prompti
39、ng the Chinese state to reimpose restrictions.The impact on the economy of the surge may also see a squeeze on spending,which could also dampen Chinese luxury spend during 2023.The partial ban on travellers from China to some European countries and the US that this new surge prompted in early 2023 c
40、ould also have an impact on European and US luxury sales.Cost of living issues may also arise from the global fallout of the Russian invasion of Ukraine.The withdrawal from the Russian market of many key luxury brands at the start of the conflict in February 2022 had an immediate and localised effec
41、t on the sector.Russian luxury customers account for approximately 2%to 3%,or about$7.7bn,of the total global luxury goods market2.This has been all but wiped off the balance sheets of many brands.However,it is the wider impact of the conflict that could trouble luxurys recovery in 2023 and beyond.C
42、onsumer confidence has already been hit in Europe,with a rise in energy prices prompted by the sanctioning of Russian gas creating an inflation boom that has hit many consumers spending ability.This is particularly impactful on the new,younger luxury shoppers,many of whom underpinned luxurys rising
43、fortunes.The global spread of inflationary pressure and falling consumer confidence is set to hit the US and Chinese markets as the year rolls on,once again eroding luxury spending.Brexit,too,continues to impact the sector.The Brexit deal saw the end to both a VAT rebate on luxury goods and as a ces
44、sation of a zero-tariff and zero-quota trade for luxury goods between Britain and EU.While foreign shoppers can still buy UK luxury goods in the UK and claim the 20%,they have to have the goods shipped directly to their home country.According to RetailX research,this has seen a huge drop in internat
45、ional visitors to UK luxury brands by nearly 7.3%,resulting in a 1.8bn loss3.Britain has an exposure of 4%to 5%in terms of international luxury brands.It relies more on domestic brands such as Burberry,which brings about 10%of the overall domestic sales.However,the problem for UK luxury brands comes
46、 when shoppers are shopping elsewhere in the EU.They are likely to buy from EU brands in the EU,where they can not only claim back their VAT but can also get a better price,since UK brands will be subject to quotas and tariffs for selling there.This will drive Asian luxury shoppers to buy European l
47、uxury brands,a boon for the ailing European luxury sector,possibly one for the emerging domestic Asian luxury retail space,but a hit for the UKs luxury industry.References1 https:/ 2023RXSLX23RP 2023 ,Luxury as a whole might have grown to reach pre-pandemic levels but how are its constituent segment
48、s fairing?Global luxury market regions&segmentsSUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|REGIONS&SEGMENTSSource:Worldwide;Bain&Company;2021Figure 6:Regional share of luxury salesShare of the personal luxury goods market,2001RetailX 2023Europe The AmericasChinaRest of AsiaJapanRes
49、t of the World31%4%25%11%7%21%REGIONAL SPENDINGThe US continues to be the dominant market for personal luxury goods,taking 31%of the global market,marginally ahead of Europes 25%share.However,Asia is catching up fast.China already accounts for 21%of the global luxury market on its own.When combined
50、with the 11%of luxury trade seen across the rest of Asia,plus the 7%of global luxury sales that take place in Japan,the region becomes the pre-eminent market for luxury(Figure 6).In revenue terms,the USA is still quite a way in front of leading Asian markets China and Japan,generating an impressive$
51、70bn in luxury sales a year in 2022.China,while taking a large slice of the global market,generates sales of around$50bn.Japan,traditionally a high-wealth market with a leaning towards Western luxury brands,is around half the size of Chinas market(Figure 7).However,these three leading luxury markets
52、 dwarf those of Europe,with France,the leading market Source:Statista Consumer Market InsightsFigure 7:The US and Chinese markets are the biggest luxury markets by farTotal consumer spending on personal luxury goods($bn),2022RetailX 20237049261514UK France Japan China USA for luxury in the region,al
53、ong with the UKs up-and-coming luxury market,generating only$15bn and$14bn in sales respectively.This is the result of the spend per consumer on luxury being wildly different in the regions,with consumers in Asia predominantly Chinese shoppers buying a large quantity of luxury items per capita,albei
54、t at a much lower price point.In Europe,the converse is true shoppers are buying fewer,much higher value,luxury items.Only in the US is there a combination of the two,with the US consumer base buying a large quantity of luxury items spread across the entire luxury price range(Figure 8).8|RetailX|Feb
55、ruary 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|REGIONS&SEGMENTSThe average luxury spend per capita in the US stands at$156,compared to$104 in Europe.In Asia,this comes out at$28,indicating that the price point of luxury goods in the Chinese market is much low
56、er than in the other regions,as well as indicating that Chinese consumers may be spending on less well-known international luxury brands,as well as investing in the burgeoning number of domestic luxury brands that have emerged in the region to service this new level of demand.European luxury spendin
57、g,meanwhile,is in decline.Having picked up after the pandemic,it is now sliding to below 2018 levels and heading for where it was in 2017.Much of this is being attributed to the failure of tourism to recover to its pre-pandemic levels,so sales of luxury goods to visiting foreign nationals are signif
58、icantly down.With China in a state of rolling lockdowns and travel restrictions through much of 2022,there has been a distinct drop in spending from these visitors.Shrinking consumer confidence worldwide towards the end of 2022 also dented sales in the region.The return of Chinese tourists,along wit
59、h a springing back in high-end consumer spending likely to be seen in the second half of 2023,are set to drive a recovery in European luxury spending.Yet this could be dampened by the growth of domestic Chinese and wider Asian demand for cheaper luxury,sold in-country,again detracting from the growt
60、h in tourist luxury spend in Europe and,to some extent,the US.Source:Statista Consumer Market InsightsFigure 8:Revenue per capita bounced back after the pandemic across regionsRevenue per capita of the personal luxury goods market($bn),2014-2022RetailX 2023AsiaEuropeNorth America20.619.419.920.923.1
61、25.522.324.427.7110.694.594.499.2109.4112.294.2110.6104.4149.2146.8145.4144.3147.9157.1132.2144.6156.02000202021202220 40 60 80 100 120 140 160$Source:Statista Consumer Market InsightsFigure 9:Chinese consumers attach more importance to luxury apparelRelative importance of luxu
62、ry clothing and shoes according to consumers,by country,2022RetailX 202345%45%47%62%GermanyUKUSAChina9|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|REGIONS&SEGMENTSSource:Statista Consumer Market InsightsFigure 10:Chinese consumers give significa
63、ntly more importance to luxury cosmetics and body care than other regionsRelative importance of luxury cosmetics and body care according to consumers,by country 2022RetailX 202317%18%17%27%GermanyUKUSAChinaCONSUMER PREFERENCES BY LUXURY SEGMENTAcross the segments that make up the luxury sector for t
64、his report,apparel,cosmetics,accessories,footwear,leather goods and eyewear Chinese consumers lead the way in desiring all and more of these luxury staples.Analysis of consumer preferences across the regions finds that in all these segments,shoppers in China are looking to buy luxury items from each
65、 category more keenly than their counterparts in USA and the selected leading European markets of Germany and the UK(Figures 9,10 and 11).The indicates that the market for luxury goods across the board is currently strongest in China,with consumer preference data outlining that growth in all these s
66、egments can be generated in the Chinese and wider Asian markets.Again,this keenness is tempered by the potential per capita spending(Figure 8).While there is a growing thirst for luxury apparel,accessories and cosmetics in China,the price point for all of these goods is still relatively low.The stan
67、dard of living in China is still lower than that of the markets of the US and Western Europe.Consequently,luxury pricing,while set at a premium above that of everyday goods,remains much lower than found in the other markets.Consequently,while there is a strong desire for these goods among Asian shop
68、pers,the revenue generated by their sale is lower.This does,however,offer a growth opportunity for luxury brands.The creation of lower cost alternatives that feature the well-known brand name can tap into this large,lower-value market,while the opportunity to create new,lower-cost luxury brands in t
69、heir own right is also strong.Established luxury brands must move fast.The gap between growing demand for affordable luxury and lack of supply of affordable brands is leading to the proliferation of domestically created luxury brands.This is in line with the Chinese principle of Guochao,literally na
70、tional trend,referring to the increased consumer favouritism towards Chinese brands,designs and culture,which has swept across the Chinese consumer base for all goods.Luxury has been no exception.Many of the established domestic Chinese luxury brands centre around local alcoholic drinks,such as Shui
71、 Jing Fang,the oldest distiller on record,dating back 600 years;Changyu,Chinas oldest and largest winery;and Moutai,hailed as Chinas National Liquor and the countrys most expensive domestic spirit.Yet the Chinese luxury market is branching out,with luxury apparel brands such as Shanghai Tang and Ne
72、Tiger seeing growing sales,while jewellery maker Lao Feng Xiang,which has been in existence since 1848,is gaining considerable global traction.Sea-Gull Watches are also becoming a must-have in the country.And lets not forget Red Flag,Chinas oft-overlooked luxury car maker,launched by Chairman Mao in
73、 1958 because even then,he recognised that China needed its own luxury car.Now government 10|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONSSource:Statista Consumer Market InsightsFigure 12:Chinese consumers attach more importance to luxury consumer electronicsRelative impor
74、tance of luxury consumer electronics according to consumers,by country,2022RetailX 202344%47%43%53%GermanyUKUSAChinaSource:Statista Consumer Market InsightsFigure 11:UK and US consumers trail China in placing less importance on luxury bags and accessoriesRelative importance of luxury bags and access
75、ories according to consumers,by country,2022RetailX 202324%27%31%44%GermanyUKUSAChinaofficials and state-owned enterprise chiefs tend to use Red Flag cars for official occasions.There is also a growing market in China for luxury consumer electronics(Figure 12),driven by the relatively new demand amo
76、ng the younger end of the consumer base for the latest in high-end mobile phones,games consoles and even VR headsets.These digital natives have grown up seeing such devices as a right rather than a privilege and are now looking to the luxury end of the market to make a personal statement.This segmen
77、t of the luxury market is set for strong growth across China,the rest of Asia and,increasingly,other developing markets in Africa and the Middle East as these similarly youthful users come of age and demand high-end tech.REGIONAL SEGMENT BREAKDOWNHow this regional spending breaks down into what kind
78、s of luxury goods consumers are spending on paints an even more interesting picture.Chinese consumers show a greater desire for all segments of the luxury market,suggesting that the growth opportunity here is strong in the years ahead.This is currently translating into actual revenue growth in each
79、of the segments.Looking more specifically at leather goods,jewellery,luxury watches,cosmetics and fragrances,Asian markets here too lead the way in terms of luxury revenue generation(Figures 13,14 and 15).This is offset by sluggish growth in the US and decline across Europe,once again driven by the
80、fall in tourist traffic,as well as a general slowdown in economic activity.Even in the buoyant luxury leather goods market,European sales are struggling to regain their pre-GLOBAL LUXURY SECTOR REPORT|REGIONS&SEGMENTS11|RetailX|February 2023RXSLX23RP 2023 ,pandemic levels.The overall luxury leather
81、market has seen steady growth but sales in Europe are tailing off.While the drop in tourist traffic may be playing a role,there is also the fact that European imports of leather goods have increased dramatically over the past decade.The European leather good sector turned over 48bn in 2020,with the
82、EU generally regarded as one of the pre-eminent sources of high-quality leather as a raw material and leather goods.However,Europe has also become one of the biggest importers of manufactured leather goods,in 2018 importing 8.6bn and increasing at a rate of 7%to 10%per year1.This is potentially offs
83、etting sales of domestically produced leather luxury goods in Europe,with its high-quality raw leather being exported and the products made from it imported.The jewellery and luxury watches segment,meanwhile,has been relatively flat through the pandemic and beyond.Watches,in particular,have a relati
84、vely niche appeal and an audience that is small but acquisitive.The market is the preserve of consumers in the 25 to 44 year age range,who have a relatively high disposable income.Again,the market for these devices is falling albeit slowly in Europe and surging in Asia,driven by the same factors as
85、the wider luxury market.In North America,however,growth has been slower than elsewhere,held back by a burgeoning market for second-hand luxury and designer watches2 and a rise in counterfeit time pieces from,ironically,Asia,flooding the market3.The growth of collecting luxury watches as a hobby had
86、fuelled early gains in the segment but rising Source:Statista Consumer Market InsightsFigure 13:Steady growth of luxury leather goods in Asia since Covid-19 as Europe slows sales in 2022Revenue of luxury leather goods segment($bn),by region,2014-2022RetailX 2023AsiaEuropeNorth America13.212.913.915.
87、420.618.120.823.815.815.818.118.715.615.114.915.516.818.515.418.119.42000202021202214.614.118.019.015.719.7Source:Statista Consumer Market InsightsFigure 14:Asia remains significantly ahead and growing in the luxury watches and jewellery segment while Europe shrinks performance
88、 in 2022Revenue of luxury watches and jewellery segment($bn),by region,2014-2022RetailX 2023AsiaEuropeNorth America36.134.233.534.437.039.933.938.642.818.615.614.514.215.115.612.515.114.08.78.37.97.88.18.97.28.28.820002020212022GLOBAL LUXURY SECTOR REPORT|REGIONS&SEGMENTS12|Ret
89、ailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|REGIONS&SEGMENTSprices and a shortage of vintage luxury watches has currently stymied growth in this part of the market.The introduction of luxury smart watches,such as Apples Watch Ultra,has also shifted
90、 the emphasis from luxury brand watch sales to consumer electronics watch sales,changing the value of the watch market segment.Finally,luxury cosmetics and fragrances again see the same overall picture as the other facets of the luxury market,with resumed growth post-pandemic,particularly in Asia an
91、d the US,but with early gains in 2021 in Europe rapidly eroding in 2022.The growth has been driven by a growing awareness among cosmetics consumers of the need for high-quality products to apply to their bodies,with social media influencers and celebrity endorsements propagating this trend.There has
92、 also been a move to ethically sourced,not animal tested and sustainable cosmetics,again driven by influencers and consumer desire to do the right thing4.These two factors have seen a surge in sales of more expensive and exclusive cosmetics and fragrances,which has had the effect of enhancing the se
93、gments reach and expanding its revenues.This has occurred through both a change in pitch among the established brands in the sector and the proliferation of a new breed of high-end cosmetics companies and marketplaces.This trend,despite the economic headwinds seen in all consumer markets,is set to c
94、ontinue into 2023 driven along with the whole sector by the growing purchasing power of the younger demographic of shoppers,as we shall uncover in the next section.References1 www.cbi.eu/market-information/apparel/leather-fashion/market-potential2 Consumer Market InsightsFigure 15:Positive pandemic
95、recovery in the luxury cosmetics and fragrances segment but Europe recedes compared to 2021 Revenue of luxury cosmetics and fragrances segment($bn),by region,2014-2022RetailX 2023AsiaEuropeNorth America15.815.116.317.620.223.220.422.426.317.614.514.515.717.417.914.617.115.811.211.512.112.412.512.910
96、.811.913.52000202021202213|RetailX|February 2023RXSLX23RP 2023 ,Luxury is increasingly attracting younger shoppers and with that comes some challenging customer behavioursGlobal luxury consumer demographics and behaviourSUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REP
97、ORT|DEMOGRAPHICS&BEHAVIOURQ3 2022Source:Statista Consumer Market InsightsFigure 16:Luxury apparel displays the highest online spending per shopper Global spending per online shopper($),by category,2022RetailX 20232.042.072.362.382.522.79Home and appliancesHealth and beautyGeneral footwear General ap
98、parelActive apparelLuxury apparelFigure 17:Younger affluent consumers purchase more luxury goods in all categories In which of the following categories have you purchased a luxury brand or service within the past year?,by age group,2022RetailX 202388%78%Designer fashion18-3940+Survey contains repons
99、es from 800 high net worth 18+years old individuals,Q3 2022Source:Altiant Quarterly GLAM monitor 91%74%86%73%83%67%78%59%Consumer electronicsLeather goodsWatchesJewelryCompared to a range of general retail categories,the amount spent online on luxury apparel worldwide is among the highest of all ver
100、ticals(Figure 16).Much of this is down to the higher price point of luxury goods but it is also a reflection of how luxury is increasingly becoming a more sought-after source of clothing,footwear,accessories and cosmetics.This is being driven almost exclusively by a growing number of younger shopper
101、s.This trope is seen across the entire luxury market,with consumers aged 18 to 39 the largest single cohort in all categories from luxury apparel to watches to consumer electronics(Figure 17).Younger shoppers are looking to luxury and its spin-off sector,affordable luxury as a source of not only hig
102、h-quality and unique items that stand apart from the more widespread high street look,but also because it offers a means of buying 14|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|DEMOGRAPHICS&BEHAVIOURSurvey contains responses from 150 high net w
103、orth 18+years old Asian residents Source:Altiant Quarterly GLAM monitor Figure 18:Purchase of luxury among high net worth Asia residents reached historic high in Q1 2022 Share of affluent consumers purchasing luxury brands on PCs in Asia by age group,Q3-2018 to Q2 2022RetailX 202318-3940+49%54%44%42
104、%52%52%42%52%54%55%49%56%58%54%65%63%38%47%46%46%39%35%41%49%51%51%41%44%51%59%64%47%Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 2240 50 60 Survey contains responses from 8000 high net worth 18+years old individuals,Q3 2022 Source:Altiant Quarterly GL
105、AM monitorFigure 19:Most Asian high net worth individuals have purchased at least a single item in each luxury category in the past year Frequency or purchase of luxury categories,Asia,2022RetailX 2023Designer fashionConsumer electronicsLeather goodsWatchesJewelrySingle purchaseMultiple purchases21%
106、29%23%19%31%33%60%59%57%60%something less ephemeral,which has both sustainability and resale value to the buyer.There is a growing sense with many shoppers that,showing off and protecting the environment aside,buying luxury is a well-deserved treat.This comes from the consumer desire for experiences
107、 and novelty in all that they do.Luxury brands and retailers pride themselves on their products but they also come with a theatrical experience instore,a dramatic unboxing online and a whole interaction that is memorable and,perhaps most importantly,Instagram-able.This has given rise,in part,to the
108、birth of the affordable luxury sub-sector of the luxury market,with brands and sellers springing up that can offer luxury items end-of-line new or second-hand at a more affordable price.It has also led other brands,for example Apple,to look at how to add touches of luxury personalisation to its prod
109、ucts,with many Apple accessories now coming with free engraving.This sees the mores of the luxury sector spreading back along the retail chain and bringing many of the core unique selling points of luxury to a much wider audience.HIGH NET WORTH SPENDERS AND WHAT THEY BUYHigh net worth consumers in A
110、sia hit an all-time spending peak in Q1 2022,with two-thirds of them across all age groups buying something on a luxury site at that point(Figure 18).While this dropped off dramatically for the over-40s as the year went on,younger spenders continued to buy luxury eagerly.15|RetailX|February 2023RXSL
111、X23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|DEMOGRAPHICS&BEHAVIOURSurvey contains responses from 150 high net worth 18+years old Europe residentsSource:Altiant Quarterly GLAM monitorFigure 20:Purchase of luxury amongst high net worth Europe residents remained stable thr
112、oughout 2022 Share of affluent consumers purchasing luxury brands on PCs in Europe by age group,Q3-2018 to Q3 2022RetailX 202318-3940+63%58%63%50%55%66%47%62%57%60%66%77%66%77%65%74%72%56%52%51%55%54%40%55%56%56%58%71%72%62%76%72%64%71%Q3 18Q4 18Q1 19Q2 19Q3 19Q4 19Q1 20Q2 20Q3 20Q4 20Q1 21Q2 21Q3 2
113、1Q4 21Q1 22Q2 22Q3 2240 50 60 70 80 Figure 21:European high net worth individuals were less likely to conduct multiple purchases in luxury jewellery during the past year Frequency or purchase of luxury categories,Europe,2022RetailX 2023Single purchaseMultiple purchasesSurvey contains responses from
114、8000 high net worth 18+years old individuals,Q3 2022 Source:Altiant Quarterly GLAM monitorDesigner fashionConsumer electronicsLeather goodsWatchesJewellery17%29%33%28%39%62%41%37%48%17%Across almost all luxury categories,these shoppers were making multiple purchases on each visit,with around 60%in e
115、ach category doing so(Figure 19).The only exception is jewellery,where single online purchases accounted for the biggest share.This can be largely attributed to the nature of jewellery buying,often bought for a special occasion or as a gift.For Europe,high net worth spending has had a more jagged tr
116、ajectory,rising and falling through the quarters but with an overall path to growth driven in almost equal measure by young and old shoppers(Figure 20).This indicates that the sector,traditionally dominated by the older end of the market,has seen significant adoption by young people.More tellingly i
117、s that the number of older shoppers now shopping online for luxury goods is at a similar level to those at the younger end.The pandemic and the switch to ecommerce that it ushered in is almost entirely the cause of this shift and it is interesting to note that,in luxury as with all other retail sect
118、ors,these habits have stuck.The purchasing habits of these high net worth Europeans,however,are very different to those of their Asian counterparts.Designer fashion yields more multiple purchases,while all other segments are predominantly driven by single purchases.This tallies with RetailXs earlier
119、 findings that Europeans tend to buy fewer,although higher valued,luxury goods when shopping.16|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|DEMOGRAPHICS&BEHAVIOURThe interesting exception is luxury watches,where multiple purchases are surprising
120、ly common.This points to the collectables nature of modern luxury watch buying among younger European shoppers,as previously discussed(see page 11).The North American market is different again,with multiple purchases dominating across all sectors,reflecting how the US market is the highest revenue g
121、enerator for the luxury sector and features the most high net worth shoppers(Figure 22).Only the luxury watch segment sees a prevalence of single purchases,characterised by the growing trend in the US for the luxury watch collectibles market being driven by the second-hand sector.CONVERSION RATES AN
122、D ABANDONMENTWhile luxury consumers globally are high spenders,they are also quite fickle,with the sector seeing falling average order values(AOVs),increasingly low conversion rates and rising cart abandonment.Immediately post-pandemic,online AOV grew rapidly as luxury brands and retailers got to gr
123、ips with ecommerce and omnichannel selling.This peaked in 2021 with the confluence of high consumer confidence and the exuberance of the end of Covid-19 travel restrictions.As 2022 progressed,however,this spending spree waned,dropping some 5%year-on-year between 2021 and 2022(Figure 23).Much of this
124、 downturn was driven by US consumers reigning in their luxury spending ahead of the holiday season,with middle income American shoppers reducing their Figure 22:North America high net worth individuals were less likely to conduct multiple purchases of luxury watches during the past year RetailX 2023
125、Single purchaseMultiple purchasesSurvey contains responses from 8000 high net worth 18+years old individuals,Q3 2022 Source:Altiant Quarterly GLAM monitorFrequency or purchase of luxury categories,North America,2022Designer fashionConsumer electronicsLeather goodsWatchesJewellery24%35%24%26%13%71%55
126、%55%24%49%Source:Salesforce ResearchFigure 23:Luxury apparel average online order value drops 5%relative to the previous yearGlobal value of average online order of luxury apparel products($)222248249263258261257255245Q3 20Q4 20Q1 21Q2 21Q3 21Q4 21Q1 22Q2 22Q3 22220 230 240 250 260 RetailX 202317|Re
127、tailX|February 2023RXSLX23RP 2023 ,Figure 25:Cart abandonment is highest for luxury products,only after home furniture Cart abandonment,by category and device,2022RetailX 202389%95%85%93%84%90%88%80%80%88%Research conducted in Q3 2022Source:Salesforce ResearchMobileComputerHome furnitureLuxury handb
128、agsLuxury apparelHandbags and luggageApparelSource:Survey conducted in Q3 2022Source:Salesforce ResearchFigure 24:Luxury categories conversion rates halve their non-luxury counterparts and lay well below averageGlobal conversion rates in selected categories,2022RetailX 20233.32.31.11.00.72.1General
129、apparel Health&beauty Luxury apparelGeneral Handbags and LuggageLuxury handbagsAverage(all categories)spend on luxury apparel the most.Aspirational young consumers in the US,however,continued to spend,averting what may have been an even more significant tail-off in luxury spending1.This throttling b
130、ack of spending was likely the result of wavering consumer confidence ahead of Christmas as families budgeted for the holiday season against a backdrop of rising interest rates and a potential economic downturn in 2023.In response,many luxury brands raised their prices,looking to maintain revenue le
131、vels from lower sales.On the flip side,early 2022 saw more spending on luxury worldwide as shoppers who had effectively saved money by not going out and not buying luxury apparel and accessories across lockdown released their reserves.This is likely a one-off event and was responsible for artificial
132、ly high levels of AOV in late 2021 and early 2022,further exacerbating the now perceived downturn.The luxury industry has since seen increasing levels of cart abandonment and very low levels of online conversion.This has dogged the sector since it started to adopt online retail and has seen levels o
133、f conversion and abandonment worsen as the post-pandemic era has unfolded.Luxury conversion rates are around half those of online retails average,sitting at 1.1%compared to an average of 2.1%.General apparel,meanwhile,converts at a rate of 2.3%(Figure 24).GLOBAL LUXURY SECTOR REPORT|DEMOGRAPHICS&BEH
134、AVIOUR18|RetailX|February 2023RXSLX23RP 2023 ,Cart abandonment is also high,second only to the home furnishings market(Figure 25).Cart abandonment and low conversion rates online are connected.Luxury shopping online involves a lot of wishful thinking on behalf of many shoppers.They browse,often on m
135、obile,as a form of entertainment and retail therapy.They even put things in their baskets as a form of wish list but then,for economic reasons,never take the order any further.Luxury is also a more considered purchase.Like all high-value goods,shoppers often take much longer to convert,since they wa
136、nt to consider and consult on their purchase.Often,they will delay this conversion decision until they can go to a store to view or try on the goods.Here,the figures on conversion are potentially misleading.They show that cart abandonment and conversion are poor for luxury online,yet they do not ref
137、lect how both are higher instore and that many of these instore conversions may be driven by online.This is supported by luxury segments all seeing a similar level of cart abandonment to home furnishings.This sector also relies much more on instore experience,where look,feel and trying out play a si
138、gnificant role in making what is also an expensive and more considered purchase.The rise in luxury ecommerce,then,should be viewed not so much as a transactional channel but more as one that is linked to the sales process.This means that mobile and social media perhaps now play a stronger role in lu
139、xury ecommerce than online and mobile traditionally play in direct conversion.References1 LUXURY SECTOR REPORT|DEMOGRAPHICS&BEHAVIOURSLOW MOTION:KEY TO SELLING LUXURY?Online,TV and cinema advertising is vital for selling the look and status of luxury products and one key way this is done is through
140、slow motion footage.As viewers we are all so well versed in this trope of the advertising world that it is barely noticeable,but it has now been shown to have a key impact on selling especially luxury goods.Research carried out in December 2022 by the American Marketing Association 1 showed a group
141、of randomly recruited consumers 12 adverts for luxury products,some full speed and some featuring slow motion footage.The results were conclusive:the products in the slow motion-featuring ads were seen as more luxurious by the panel.The effect is the same across segments chocolate,shampoo,mineral wa
142、ter,wine and in different countries,in this case the US,UK and France.Why?The researchers postulate that the effect occurs because viewing a slow-motion ad increases feelings of immersion,which in turn lead consumers to expect greater hedonic value from the featured product and thus view it as more
143、luxurious.Consistent with this account,the effect weakens when video blurriness or buffering impairs the viewing experience,even in slow motion.Making it look more luxurious with slo mo also made subjects more keen to pay more for the goods.1 https:/ 2023RXSLX23RP 2023 ,Luxury shoppers have returned
144、 to stores,but that doesnt mean they arent now also highly digitalGlobal luxury device and channel useSUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|CHANNELS&DEVICESMost recent update Oct 2022Source:Statista Digital Market OutlookFigure 26:Digital channels account for over 20%of luxur
145、y sales Online revenue share,2017-2022RetailX 202300212022OfflineOnline13%87%13%14%18%19%21%87%86%82%81%79%Figure 27:60%of online consumers of luxury buy on their phones Online purchase device preference,2017-2022RetailX 2023DesktopMobileMost recent update Oct 2022Source:Statis
146、ta Digital Market Outlook0021202241%47%52%54%58%60%159%53%48%46%42%40%DEVICE USE IN LUXURYThe luxury sector has long relied on the instore experience to drive sales.Part of the justification for the high price is not only the exclusivity and design but also the attentive and hi
147、ghly personalised service meted out in physical stores.Yet successive pandemic lockdowns saw the luxury sector having to rapidly implement and expand their fledgling ecommerce strategies to drive sales while stores were closed.As with most other retail sectors,this proved highly successful,being rap
148、idly taken up by the luxury brands clientele.While it generated a lower level of sales overall,it still plugged the gap more than adequately.While this uptake of digital has remained,it now occupies quite a low level of overall sales,accounting for just 20%(Figure 26).Within this,mobile is a stronge
149、r influence on digital sales in the sector,accounting for 60%of digital sales(Figure 27).20|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|CHANNELS&DEVICESFigure 28:Stores remain important and mobile lags behind desktop salesThe percentage of peopl
150、e to have purchased luxury products in the last yearRetailX 2023Europe Asia North AmericaBased on 150 high net worth individuals in each of Europe,North America and Asia Pacific aged 18+,July-September 2022Question“Within the past 12 months,how have you purchased luxury brands of services?Source:Alt
151、iant Quarterly GLAM monitor82%61%54%20%71%71%37%18%81%83%53%26%Online via tablet Online via mobile Online via computer In a physical store Survey conducted in Q3 2022Source:Altiant Quarterly GLAM monitorFigure 29:Younger consumers are more prone to purchase luxury goods via mobile“Within the past 12
152、 months,how have you purchased luxury brands or services?”by age group,2022RetailX 202378%77%70%72%61%42%23%21%In a physical storeOnline via computerOnline via mobileOnline via tablet40+18-39Stores remain the predominant channel chosen by luxury consumers to shop(Figure 28)across all age groups(Figu
153、re 29).However,this data hides the role that digital channels especially mobile are playing in the luxury retail shopper journey.Luxury transactions online and on mobile may lag significantly behind those made in stores even among the younger shoppers who are much more digital and mobile-centric but
154、 these channels play a significant role in the overall shopping journey.As previous research in this report shows,analysis of consumer behaviour around luxury purchase relies on more careful consideration and often using digital channels to identify wish list items,which are then not purchased for s
155、ome considerable time often not until the shopper is in a store.With much of luxurys sales coming from tourist traffic shopping in airports and other transport hubs,as well as at luxury outlets in foreign cities,this conversion from items identified online and on mobile to an actual purchase can be
156、so lengthy as to never be truly correlated.That is not to say that online and mobile arent becoming an important channel for luxury retailers.Young people are increasingly using mobile as a means to seek inspiration and to track down rare goods and bargains.The digital-first generations between the
157、ages of 18 and 39 are reliant on digital tech for every facet of their lives and it will increasingly become a transactional,as well as inspirational,channel for this age group as they get older.21|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|CHA
158、NNELS&DEVICESSource:Statista Consumer Market OutlookFigure 30:Asia leads on mobile shopping of luxury goods Online purchase device preference,by region,2022RetailX 2023AsiaEuropeNorth AmericaGlobal100500DesktopMobile26%54%49%40%74%46%51%60%Source:Statista Digital Market OutlookFigure 31:The online s
159、ales split of the luxury market in Asia is higher than other regionsOnline revenue share,by region,2022RetailX 2023AsiaEuropeNorth AmericaGlobal100500OfflineOnline74%26%19%18%21%81%82%79%Meeting the demands of this mobile consumer base will become more important to the luxury sector as these young s
160、hoppers currently getting a taste for luxury and affordable luxury items become the central consumer base for brands tomorrow.This is particularly true for younger consumers in Asia.The growth in the Asian luxury market is being driven by a growing number of millennials and Gen Z-ers who are increas
161、ingly affluent and looking for the cache of luxury.These shoppers are also inherently digital and so we can see a higher proportion of Asian luxury shoppers buy online compared to the other regions of the world(Figure 31).These shoppers are also driven by mobile,with it accounting for 74%of online l
162、uxury sales in the region,compared to a global average of 60%an average pushed up significantly by this large proportion of mobile-first Asian shoppers(Figure 30).By comparison,just over half(51%)of US shoppers are mobile-first,with only 46%of those buying luxury online in Europe.INCREASING ROLE OF
163、SOCIAL MEDIAThe growing propensity for luxury shoppers to use mobile over desktop when they are buying digitally also points to the wider use of mobile in the shopping journey.Social media,which is predominantly a mobile pursuit among consumers,especially digital natives,is playing a growing role in
164、 driving the growth of luxury.22|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|CHANNELS&DEVICESLuxury fashion,accessories and cosmetics are all aspirational purchases,and nothing drives aspiration more effectively than social media influencers and
165、 social marketing.Across the world,luxury shoppers are engaging with social media around luxury brands,with the majority using it to recommend things to friends and family,but with a significant and growing number following social media influencers.Some are even starting to purchase items through lu
166、xury brands social media presence(Figure 32).Again,this is being driven by Asian markets,while US shoppers arent far behind.In Europe,there is less attraction to social media engagement with these brands.The demographic of European luxury consumers again offers some insight luxury buyers in Europe t
167、ending to be older,with older users being less engaged with social media Assessing consumer social media behaviour by age shows that it is the under-40s that are most often to be found using social media for everything from recommending things to friends and engaging with luxury brands by direct mes
168、sage(DM)to actually purchasing goods(Figure 33).Luxury brands are cashing in socially on the growing power of social media influence in mainstream retail,especially in fashion.A look at the leading brands on Instagram in 2022 shows that they are dominated by fashion sellers(Figure 34).International
169、brand Zara is way out in front,although luxury brand Gucci makes a strong showing,as do Dior,Louis Vuitton and Prada these luxury brands making up nearly half of the Figure 32:European consumers are less inclined to engage luxury brands in social media activity Have you participated in any of the fo
170、llowing activities in relation to luxury brands and services on social media in the past three months,by region,2022RetailX 202323%37%21%37%25%18%22%25%19%17%55%35%53%57%45%53%34%23%Followed a brandSent a private message to a brandMade a purchase via social mediaFollowed a social media influencerNon
171、e of theseLiked or recommended a brand to youfreinds/family/colleaguesEuropeAsiaNorth AmericaSurvey conducted in Q3 2022Source:Altiant Quarterly GLAM monitor23|RetailX|February 2023RXSLX23RP 2023 ,Jan 2022-Jun 2022Source:influData by weCreateFigure 34:Gucci is the luxury brand with most Instagram pr
172、esence Leading brands on Instagram worldwide in first half 2022,by number of mentionsRetailX 202343560ZaraSheinNikeH&MGucciDiorLouis VuittonPradaFashion NovaFigure 33:Under 40s are more prone to engage in luxury brand social media activityHave you participated in any
173、 of the following activities in relation to luxury brands and services on social media in the past three months,by age group,2022 RetailX 202358432720222042271134604840+18-39Survey conducted in Q3 2022Source:Altiant Quarterly GLAM monitorFollowed a brandSent a private message to a brandMade a purcha
174、se via social mediaFollowed a social media influencerNone of theseLiked or recommended a brand to youfreinds/family/colleaguesleaders in this category.It is also interesting to note that Chinese fashion marketplace Shein is second,pointing to both the power of the Chinese fashion market and the emph
175、asis that Chinese shoppers put on social media engagement with fashion.Following social media influencers is also growing in importance more rapidly among younger consumers,as they look to these people for inspiration.The rise of programmes such as Love Island in the UK which has partnered with eBay
176、 to kit out on-screen contestants in second-hand designer garb is fuelling this growth and working wonders for both the profile of luxury brands and the sustainability credentials of the whole sector.GLOBAL LUXURY SECTOR REPORT|CHANNELS&DEVICES24|RetailX|February 2023RXSLX23RP 2023 ,Increasingly,sus
177、tainability has been driving customers purchase choices.Is that now spreading to luxury?Global luxury sustainabilitySUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|SUSTAINABILITYSustainable and ethical retail practices across manufacturing,operations and logistics have become a growing
178、 driving force in the choices consumers make when looking at what to buy.For example,61%of UK consumers feel that sustainability is more important to them than it was two years ago,with 30%saying this was because of personally being impacted by extreme weather events1.This shift to more sustainable
179、habits has also been coupled with many consumers looking at being more aware of the ethics of the companies from which they purchase,with environmentally friendly production and fair treatment of workers becoming top concerns.This was,in some part,driving a surge in sales of luxury items pre-pandemi
180、c,with many consumers especially those under 40 regarding buying a piece of designer fashion as being an investment in a piece of clothing that would have longevity,an antidote to the more destructive path of fast fashion.Most consumers are taking some action to live more sustainability,with half ta
181、king their own shopping bags,avoiding waste and minimising electricity usage.Survey contains responses from 150 high net worth 18+years old Europe residentsSource:Altiant Quarterly GLAM monitorFigure 35:The importance of sustainable luxury has dramatically decreased in the eyes of European consumers
182、 Consumer opinions on the luxury brands adoption of sustainable luxury policies,Europe,2020-2022RetailX 20233%3%4%4%050Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 2022Q4 2020Somewhat unimportant or not al all importantNeutralSomewhat importantVery important63%58%66%57%15%16%11%14%9%11%25%25%26%16%1
183、6%13%11%18%18%21%13%51%56%57%53%28%6%13%Survey contains responses from 150 affluent and high net worth USA residents,18+years oldSource:Altiant Quarterly GLAM monitorFigure 36:The importance of sustainable luxury has slightly decreased in the eyes of American consumers Consumer opinions on the luxur
184、y brands adoption of sustainable luxury policies,USA,2020-2022RetailX 2023Somewhat unimportant or not al all importantNeutralSomewhat importantVery important050100Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022Q3 202238%38%37%37%30%33%31%31%41%14%7%13%6%15%14%14%10%18%13%25%10%23%11%44%40%46%46%32
185、%33%35%25|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|SUSTAINABILITYHowever,global consumers say that cost(41%),access(35%)and a lack of clarity(26%)stop them from adopting even more sustainable lifestyles.This,coupled with the cost-of-living pr
186、essures seen in 2022 and into 2023,has instigated something of a volte face on the view of sustainability in luxury in recent months.In Europe,the importance attached to sustainability in luxury plummeted between Q3 and Q4 2021 and has remained at these levels across the whole of 2022(Figure 35).Thi
187、s is almost entirely down to the shift in consumer confidence ushered in on the back of the Russian invasion of Ukraine.This sparked a sharp rise in energy price and plunged the continent into rapidly rising inflation,rapidly denting consumer confidence and reigning in spending.The impact was also f
188、elt in the US,albeit less so,which saw a small but noticeable drop in the importance of sustainability in early 2022,as the financial worries in Europe rippled across the Atlantic(Figure 36).Only in Asia,which has been significantly less exposed to Russian oil and gas imports and so been less impact
189、ed by war in Ukraine,has there been a rise in interest in sustainability in luxury(Figure 37).Here,there is a complete reversal of attitude to that seen among European consumers.In Q3 to Q4 2021,the importance of sustainability in luxury among Asian shoppers radically shifted from not being importan
190、t to being significantly important.There is no one clear reason or event triggering this change.However,the focus on health and wellbeing Survey contains responses from 150 high net worth 18+years old Asia residentsSource:Altiant Quarterly GLAM monitorFigure 37:The importance of sustainable luxury h
191、as dramatically increased in the eyes of Asian consumers Consumer opinions on the luxury brands adoption of sustainable luxury policies,Asia,2020-2022RetailX 2023010050Somewhat unimportant or not al all importantNeutralSomewhat importantVery importantQ4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022Q2 2022
192、Q3 202260%58%63%57%55%54%70%58%28%32%20%30%19%14%18%10%16%18%21%19%12%8%6%4%4%5%10%9%9%6%2%Figure 38:European consumers care the most about local production of luxury goods Which of the following statements about luxury products do you agree with,by region,2022RetailX 202322%23%11%59%53%58%30%47%14%
193、14%8%8%I prefer luxury products madein the country I live in I am interested in buyingsustainable products I am interested in buyingsecond-hand clothes I am interested inrenting clothes Survey contains responses from 150 high net worth,18+years old,individuals in each of the stated regionsSource:Alt
194、iant Quarterly GLAM monitorEurope Asia North America26|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|SUSTAINABILITYFigure 39:North America luxury consumers are less prepared to pay for a sustainability premium Willingness to pay for sustainable lu
195、xury among luxury consumers,by region,2022RetailX 2023Europe050100North AmericaAsiaI would pay over 25%moreI would pay 10-25%moreI would pay 5-10%moreI would pay 5%moreI would not be prepared topay any moreSurvey contains responses from 150 high net worth 18+years old individuals in each of the stat
196、ed regions,Q3 2022Source:Altiant Quarterly GLAM monitor15%21%13%16%35%35%19%35%18%1%5%5%33%29%19%Survey contains responses from 150 high net worth 18+years old individuals in each of the stated regions,Q3 2022Source:Altiant Quarterly GLAM monitor Figure 40:Younger luxury consumers are more willing t
197、o pay for a sustainability premium Willingness to pay for sustainable luxury among luxury consumers,by age group,2022RetailX 202318-3940+050100I would pay over 25%moreI would pay over 10-25%moreI would pay 5-10%moreI would pay up to 5%moreI would not be prepared to pay any more12%24%12%33%33%14%9%21
198、%36%4%brought about by the pandemic,along with the focus on the detrimental environmental factors that may have led to the outbreak of Covid-19 in the first place,seem to be drivers.Research into consumers habits in Asia finds that there has been a groundswell of interest in linking personal health
199、and wellbeing with that of the products people buy.This,in conjunction with growing political investment in the Paris Accord across the region,has seen consumers,business and government all start to work to promote and deliver sustainability across the Asian region2.This has all seen a surge in inte
200、rest in sustainability in all facets of consumerism,including luxury.CONSUMER ATTITUDES While the emphasis on sustainability in Europe and the US has dropped,that doesnt mean to say that it isnt still of importance to swathes of consumers.European consumers remain drawn to luxury products that are m
201、ore locally produced,in part because of the environmental impact of shipping,as well as a residing concern for the working conditions and environmental practices associated with some less-well-regulated manufacturing regions(Figure 38).European and Asian consumers are also more prepared to pay more
202、for more sustainable and ethical goods(Figure 39).Around a third are prepared to pay between 10%and 25%more in each region.In the US,there is less appetite for paying such a high premium but consumers in all three regions are evenly matched at 35%of consumers prepared to pay 5%to 10%more for more su
203、stainable and ethically 27|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|SUSTAINABILITYproduced goods.These figures shift still further in favour of paying more when looked at by age.Younger consumers in the 18 to 39 bracket,lead the way in being
204、prepared to pay 10%to 25%more for sustainable and ethically produced goods(Figure 40),radically outstripping those aged 40-plus who would pay such a high premium.While the youth demographic is much more environmentally aware and is often seen as driving the green agenda,the data reveals that those a
205、ged over 40 are actually just as wedded to their green credentials.They are just less willing to pay such a high premium.Among the 40-plus demographic,36%are prepared to pay between 5%and 10%extra for sustainable goods,while an additional 14%would pay between 10%and 25%.This means that 50%of consume
206、rs aged 40 and over are willing pay a noticeable premium for sustainable goods.This is below the 75%of under 40s willing to do so but is a significant number nonetheless.It is also likely that this proportion of over 40s willing to pay extra will grow as environmental awareness continues to seep int
207、o consumer consciousness.The sustainability play among consumers is not limited to just looking at paying more for sustainable goods.There is also a groundswell of interest in looking at purchasing second-hand and refurbished goods,which is driving change in shopping habits(Figure 38).Source:Statist
208、a Figure 41:Growth of the second-hand luxury market normalises after a significant increase in 2020 Annual growth rate of second-hand luxury goods market,2017-2022RetailX 202318%8%8%17%3%5%2002020212022Source:StatistaFigure 42:The market share for second-hand luxury goods keeps growing sl
209、owly but steady in Europe Share of second-hand luxury goods in the overall luxury&premium market,Europe,2017-2022RetailX 20232.6%2.9%3.1%3.6%3.7%3.9%20020202120222 3 4 5 28|RetailX|February 2023RXSLX23RP 2023 ,SECOND-HAND LUXURY The growing global consumer interest in sustainability has c
210、reated a renewed interest in the second-hand market.The global second-hand and thrift market for clothing alone is valued at some$150bn in 20223 and the attraction of more sustainable and unique items has spurred a surge in interest in buying second-hand luxury items.Pre-pandemic,there was already a
211、 growing interest in sustainable purchases and this started to play through into some groups of consumers looking to the second-hand sector to reuse clothing.Many retailers,within and without the luxury sector,had recognised this shift and instigated their own re-loved and pre-loved programmes acros
212、s all sectors from furniture and homewares(Ikea)to fast fashion(H&M).Consumers had also started to see the potential stylistically,economically and sustainably in buying and selling second-hand luxury goods.This move came into its own during the peak of the pandemic in 2020,when consumers had more t
213、ime to shop around and were more inclined to look for treats for themselves.This saw the global second-hand luxury market peak at 17%in 2020,up from 8%pre-pandemic(Figure 41).While the cost of living crisis has seen the wider second-hand market continue to grow,that of luxury has dropped from this 2
214、020 peak,falling back to just 3%in 2021 and then normalising at around 5%during 2022.The drop can almost certainly be attributed to the re-opening of travel and stores,which saw many luxury shoppers returning to making first-hand*2006 data is an estimated forecastSource:Statista Figure 43:Luxury sec
215、tor is behind in the second-hand market Worldwide secondhand consumer goods revenue($bn),by category,2022 vs 2026RetailX 2023522929272624232312111099ApparelConsumer electronicsDIY&hardwareFurnitureAccessoriesHousehold appliancesToys,hobbies&video gamesFootwareLuxury goods20222026Source:Vo
216、gue BusinessFigure 44:Ebay displays highest conversion rate for buying second hand luxury items in USA Most popular online marketplaces for buying second-hand luxury,USA,2021RetailX 202327%28%32%33%36%38%40%51%53%69%EbayFacebook MarketplacePoshmarkMercariThe RealRealThreadUpGOATStockXDepopVestiaire
217、Collective29|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|SUSTAINABILITYpurchases of luxury goods.The luxury sector trails all others when it comes to the proportion of sales that are second-hand(Figure 43),with the vast majority of shoppers in t
218、he sector being relatively high net worth individuals who are seeking new and unique items.Put simply,they dont need the economic advantage of buying second-hand.That said,there is a growing cohort of younger consumers that see the value in buying and indeed then selling on unique luxury items.This
219、segment of the market is set to grow slowly but steadily.The market for second-hand luxury is also focussed at the more affordable but trendy end of the market,with rare Adidas and Nike items among the most popular on second-hand luxury sites in Europe.However,Louis Vuitton,Gucci and Chanel are also
220、 in the top 104.For this reason,the market for second-hand luxury in Europe continues to grow slowly and steadily,moving from 3%of the total luxury market in 2019 to almost 4%by the close of 2022(Figure 42).Much of this trade in second-hand luxury items takes place in eBay,which accounts for 69%of s
221、econd-hand luxury online sales in the US(Figure 44).This too points to how the second-hand luxury market is driven by both buying and selling such items.For example,in the UK,data suggests that as many as a quarter of consumers sold an item on a marketplace in 20225.This is something increasingly be
222、ing seen in the luxury sector because the inherent and long-term value of items in this sector lends*2026 data is an estimated forecastSource:Statista Figure 45:The revenue for luxury circular economy is projected to double in the next four years Worldwide circular economy revenue($bn),by category,2
223、022-2026RetailX 20233220320262022ApparelConsumer electronicsDIY&hardwareFurnitureAccessoriesHousehold appliancesToys,hobbies&video gamesFootwareLuxury goodsResearch conducted in Oct 2022Source:Business invest sarlFigure 46:Half of the leading cyclical retail industri
224、es on Google belong to the luxury sector Leading cyclical retail industries on Google,by number of brands,2022RetailX 202317137Internet retailLuxury goodsSpecialty retail30|RetailX|February 2023RXSLX23RP 2023 ,itself to resale and onward trade.The trade in pre-loved luxury has created a growing numb
225、er of sites focussed on second-hand luxury goods.These include TheRealReal,ThredUP,Depop and Vestiaire Collective.All of these are starting to generate significant sales for the luxury sector and have helped usher in a much more circular approach to retail in the luxury sector.LUXURY AND THE CIRCULA
226、R ECONOMY The circular economy a model of production and consumption involving sharing,leasing,reusing,repairing,refurbishing and recycling existing materials and products as long as possible has started to gain some traction across a range of industries,driven by the growing appetite for more susta
227、inable living.Analysis of a range of retail sectors reveals that many are set to see the uptake of circular economic models grow rapidly and dramatically across the next 12 months,with the luxury sector likely to see a doubling in the proportion of circular goods between 2022 and 2023(Figure 45).Par
228、t of the reason for this is that luxury companies tend to pride themselves on traditional values of craftsmanship and attention to detail.While becoming circular isnt traditional per se,it can be seen as part of the handcrafting tradition,with luxury businesses looking at how to take apart and repur
229、pose their already high-quality items.Indeed,half of the leading cyclical manufacturers on Google are in the luxury sector(Figure 46),showing just how the industry has embraced this new behaviour.The luxury sector has been quick to adapt to this new model,typically because most luxury brands are ver
230、tically integrated and largely self-Figure 47:Refurbished luxury sector market size is not expected to play a major role in the near futureWorldwide refurbished consumer goods market revenue($bn),by category,2022 vs 2026RetailX 20230000532241100*2026 data is an estimated forecastSource:St
231、atista20262022ApparelConsumer electronicsDIY&hardwareFurnitureAccessoriesHousehold appliancesToys,hobbies&video gamesFootwareLuxury goodsFigure 48:Luxury rental sector market size is projected to double in the next four years RetailX 20234.11.85.22.36.12.87.93.49.54.311.14.915.916.57.340.119.58.6*20
232、26 data is an estimated forecastSource:Statista Worldwide rental consumer goods market revenue($bn),by category,22ApparelConsumer electronicsDIY&hardwareFurnitureAccessoriesHousehold appliancesToys,hobbies&video gamesFootwareLuxury goodsSUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY
233、SECTOR REPORT|SUSTAINABILITY31|RetailX|February 2023RXSLX23RP 2023 ,contained,making it much easier to rapidly adapt to new processes.Much of this is focussed on resale and repurposing of items.The inherent quality of luxury items,along with the care their owners tend to take of them because of the
234、items high value,means that the circular economy in luxury is largely focussed on resale by individual owners,a growing number of resale sites and marketplaces and,increasingly,the luxury brands themselves.Because of this,the luxury sector has been slow to embrace any form of refurbishment and is fo
235、recast to remain outside of this form of sustainability(Figure 47).One area where the luxury sector and luxury items are seeing greater circular potential lies in rental.The rental of luxury apparel,in particular,is set to double in revenue terms between 2022 and 2023,driven again by consumer desire
236、 for affordable luxury,the need to be more mindful of the environment and the growing acceptance of the circular economy as an acceptable way to garner new clothing.The move has been readily exemplified across 2022 and 2023 by UK reality TV show,Love Island6.Partnering with eBay,this has clothed its
237、 contestants in a range of second-hand luxury and designer items and,at a swoop,added mass market appeal to the rental and reuse of luxury clothing.References1 https:/ www.consultancy.uk/news/33077/cost-of-living-crisis-driving-a-second-hand-shopping-boom4 https:/dashboards.sdgindex.org/rankings5 ht
238、tps:/ REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|SUSTAINABILITY32|RetailX|February 2023RXSLX23RP 2023 ,Who are the largest 50 luxury companies serving the global luxury market and what does that say about the sector?Global luxurys largest 50 brandsSUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY
239、SECTOR REPORT|LARGEST 50 BRANDSThe RetailX Largest 50 players in the global luxury market showcase just how diverse the sector can be,but how dominated it is by fashion apparel(see Figure 49 and the table in Figure 50 on pages 33 and 34).They are also almost entirely located in Europe,with the major
240、ity of these found in France and Italy(see Figure 51).This reflects the fact that the luxury business is routed in an older world of bespoke fashion,where brands that are today seen as luxury offerings,were once the preserve of not just high net worth individuals,but also the European aristocracy.In
241、deed,the idea of fashion apparel took hold in Europe in the 14th Century,which saw a renaissance in clothing design,moving away from traditionally draped clothing,to using new stitching and design techniques to produces more curved and fitted clothing.This was expensive and tailor-made,usually for r
242、oyalty,and hence was a luxury.The emergence of a rich merchant class through the 15th to 18th Centuries saw these sorts of designs and the companies that made them broaden Note:The number of retailers in each sector are shown in parenthesesSource:RetailX,drawing on data from SimilarWebFigure 49:Fash
243、ion websites receive more than three out of four visits We visits to the Luxury Largest 50,by product typeRetailX 2023Fashion(28)Cosmetics(6)Jewellery(6)75.9%15.8%8.3%their appeal,while still being somewhat exclusive.The renaissance drove this to new heights and,with increasingly concentration of we
244、alth in Italy,France and the UK,the luxury industry became concentrated where the money was.This has created a small but well-established group of luxury brands in Europe that trade on this longevity and tradition,with these factors along with rarity,exquisite craftsmanship and being handmade in a t
245、raditional way being what defines them as luxury brands.They are typically the best of the best.This European-ness,too,is partly what has seen these brands manage to expand their sales so dramatically all over the world.While,Europe produces the lions share of luxury goods,it is no longer the larges
246、t consumer of them.French luxury brands attract the most online traffic(see Figure 52),but most of this traffic 35%comes from the US(see Figure 53).While South Korea and Japan attract 4%and 6%respectively,the rest of the world,which includes China,attracts some 25%of luxury traffic to the RetailX To
247、p 50.This compares with traffic from the home markets of these brands,Italy and France,attracting just 4%and 6%,dwarfed by these new markets.While the overall drop in sales in Europe of luxury is rooted in the continued suppression of tourism,the fall in native sales within Europe of online luxury i
248、s harder to pinpoint.The rise of fast fashion and a raft of high-end high street fashion and affordable luxury in the wider European fashion market is likely the main reason for the drop,with shoppers tending to spend on a range of these items rather than one luxury item.The decadent appeal of luxur
249、y has also put many shoppers off over the years.However,this is now being thrown into reverse by a younger generation looking to buy high quality,long-life items with a unique style.As luxury brands come around to creating the kind of products that these entry-level,young consumers want,this trend m
250、ay yet reverse.33|RetailX|February 2023RXSLX23RP 2023 ,Company/BrandMosttraffickeddomainHQcountryPrimarysegmentsactiveinArmani Italy Fashion apparel or accessoriesBalenciaga France Fashion apparel or accessoriesBally bally.co.uk Switzerland Fashion apparel or accessoriesBobbi Brown United States of
251、America CosmeticsBottega Veneta Italy Fashion apparel or accessoriesBrunello Cucinelli Italy Fashion apparel or accessoriesBurberry United Kingdom Fashion apparel or accessoriesBvlgari Italy JewelleryCartier France JewelleryCline United Kingdom Fashion apparel or accessoriesChanel France CosmeticsCl
252、arins France CosmeticsCle De Peau Beaute United States of America Fashion apparel or accessoriesCoach France Fashion apparel or accessoriesDior France Fashion apparel or accessoriesDolce and Gabbana Italy Fashion apparel or accessoriesEste Lauder United States of America CosmeticsGivenchy France Fas
253、hion apparel or accessoriesGucci Italy Fashion apparel or accessoriesGuerlain France CosmeticsHerms France Fashion apparel or accessoriesHugo Boss Germany Fashion apparel or accessoriesJaeger-LeCoultre jaeger- Switzerland JewelleryJimmy Choo United Kingdom Fashion apparel or accessoriesKenzo France
254、Fashion apparel or accessoriesSUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|LARGEST 50 BRANDSFigure 50:Largest 50 luxury brands globally 34|RetailX|February 2023RXSLX23RP 2023 ,Company/brandMosttraffickeddomainHQcountryPrimarysegmentsactiveinLancme lancome- France CosmeticsLoewe Spai
255、n Fashion apparel or accessoriesLongines Switzerland JewelleryLouis Vuitton France Fashion apparel or accessoriesMatches Fashion United Kingdom Fashion apparel or accessoriesMoncler Italy Fashion apparel or accessoriesOmega Switzerland JewelleryPola Japan CosmeticsPrada Italy Fashion apparel or acce
256、ssoriesRalph Lauren United States of America Fashion apparel or accessoriesRay-Ban ray- Italy Fashion apparel or accessoriesRolex Switzerland JewellerySalvatore Ferragamo Italy Fashion apparel or accessoriesShiseido Italy Fashion apparel or accessoriesSKII sk- Japan CosmeticsTag Heuer Switzerland Je
257、welleryTiffany and Co United States of America JewelleryTissot Switzerland JewelleryTitan titan.co.in India JewelleryTods Italy Fashion apparel or accessoriesValentino Italy Fashion apparel or accessoriesVanCleef&Arpels France JewelleryVersace Italy Fashion apparel or accessoriesVestiaire Collective
258、 France Fashion apparel or accessoriesYvesSaintLaurent France Fashion apparel or accessoriesSUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|LARGEST 50 BRANDS35|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|LARGEST 50 BRANDSSource:Ret
259、ailX,drawing on data from SimilarWebFigure 51:Over half of the Largest 50 Luxury retailers are based in France and Italy Where the Largest 50 Luxury retailers are basedRetailX 202374FranceItalySwitzerlandUKUSAJapanElsewhere99142730NOTABLE PLAYERSWhile the Top 50 list largely reads as a whos who of l
260、uxury brands,analysis of how these brands are seen and interacted with reveals that there are some that are the epitome of the industry in the eyes of consumers.Gucci is the most well-known luxury brand worldwide,followed by French titan Chanel(see Figure 54).The rest of the top 10 are all French or
261、 Italian stalwarts,apart from the UKs Burberry purveyor of fine coats and hats which comes in fifth with a brand awareness among global consumers of 87%.The picture is pretty much the same when assessing the brand awareness of luxury brands among US shoppers.Here too Gucci and Chanel are the most re
262、cognised players in the market,being seen as synonymous with luxury and having brand awareness levels of 88%and 84%respectively(see Figure 55).Here,the list of luxury brands preferred by shoppers here are all French or Italian,aside from Burberry,which again attracts a lot of attention at 64%.Again,
263、the European-ness of these brands,along with their lineage and quality are what attracts shoppers to seek out these brands for luxury fashion and apparel purchases over any domestic players.Outside of luxury fashion apparel,the dominance of EU-based players is less.The market for luxury Figure 52:Fr
264、ench companies receive a third of web visits Countries where the Largest 50 Luxury retailers are based,along with the traffic they attractRetailX 20234%FranceItalyUKUSASwitzerlandGermanyElsewhereSource:RetailX,drawing on data from SimilarWeb9%14%22%39%3%9%36|RetailX|February 2023RXSLX23RP 2023 ,SUST
265、AINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|LARGEST 50 BRANDScosmetics,for instance,sees half of the top 10 companies based outside the EU,with MAC,Estee Lauder,NARS and Fenty all based in the US and Charlotte Tilbury based in the UK(see Figure 56).The RetailX Top 50 list also features
266、 several other brands across cosmetics,watches and jewellery who are also outside of the EU axis.Many of the luxury watch makers are,unsurprisingly,based in Switzerland,while cosmetics makers SKII and Pola are located in Japan and cater to the growing Japanese market,which has its own skincare deman
267、ds,based on local customs and skin tones.Jewellery company Titan is also worth a mention as it is the only company in the Top 50 from India and is perhaps an early sign that the Asian market for luxury goods is starting to see the creation of its own domestic luxury brands that are gaining significa
268、nt traffic and sales.COUNTERFEIT LUXURYAs many as 10%of all luxury goods bought are potentially counterfeits and makes up just a small part of the global counterfeiting market,which is estimated to be worth around$4.2trn in 2022 1.The market for counterfeiting of luxury items has always been large:t
269、hese are high value and desirable items that people will spend some money on for a simulacrum.However,the pandemic and the shift to online shopping has exacerbated the problem,giving counterfeiters easier ways to not only sell their goods but to also make them appear genuine.Source:RetailX,drawing o
270、n data from SimilarWebFigure 53:Online consumers from USA lead visits to the Largest 50 Luxury retailersWeb traffic to the largest 50 Luxury retailers split by consumer location,2022RetailX 202335.39.05.95.84.34.13.63.53.525.0Elsewhere Italy Australia Canada Germany South Korea France Japan UK USA T
271、he rise of social media has seen fakers able to create deep fake endorsements,accounts and websites that allow them to pass off what they have as real.This has shifted luxury fake selling form simply selling a knock off version of a luxury item to instead selling fake items as real and at almost ful
272、l luxury price.This has been a boon for the counterfeiting market,but is a terrible problem form the luxury industry.Not only is it losing billions of dollars in lost sales,but also it is doing enormous brand damage.While some of the onus falls on social media platforms to attempt to weed out the fa
273、ke adverts,there seems to be very little the luxury industry itself can do to curb the rise in counterfeit sales.And as luxury goods become more popular driven as we have seen by the need for uniqueness,sustainability and high quality so the counterfeits can afford to invest more in taking an ever-l
274、arger slice of the pie.Interestingly,the use of blockchain technology,already seen in the sale of virtual luxury items,knows as NFTs,in the metaverse(see page 54),could help solve the problem.Blockchain is a means of creating a totally immutable chain of provenance for items,so that where they came
275、from,who owns them and who sold them is logged and cant be changed.This,if it can be brought to bear in real world luxury items could go a long way to solving the problem.Besides blockchain,simple QR(quick response)37|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXU
276、RY SECTOR REPORT|LARGEST 50 BRANDScodes could be an easy way to help verify luxury authenticity.Italian luxury fashion brand Valentino teamed up with OpSec Security,a brand protection agency,in to embed QR codes in the tags inside Valentino shirts 2.All the buyer has to do is scan the code to be tak
277、en to a site that authenticates the item.Although its possible for counterfeiters to clone the genuine QR code and print it on a counterfeit bags label,counterfeiters cannot include all the information that traces the product back to the retail store.Such technological tools are all the industry has
278、 to tackle the rise in counterfeiting,but it is a battle worth fighting as the industry is projected to lose more than$50 billion a year to counterfeiting world wide.References1 Ghost Data,https:/ghostdata.io/report/Instagram_Counterfeiting_GD.pdf2 Vogue Business,https:/ Consumer InsightsFigure 54:T
279、he only non-Italian,non-French brand in the top five is Burberry,withthe British luxury fashion house attracting a brand awareness of 87 percent in the United Kingdom Leading luxury fashion brands ranked by brand awareness in the United Kigdom 2022RetailX 202378%84%85%85%86%87%89%91%92%92%Gucci Chan
280、elDiorPradaBurberryDolce&GabbanaYves Saint LaurentLouis VuittonVersaceGivenchyLeading beauty brands worldwide in the first half of 2022,based on Media Impact Value*($mn)RetailX 20239243260274337360388Dior LOral ParisLancmeMAC Cosmetics Este LauderChanelNARSCharlotte TilburyFenty BeautyYSL
281、Beauty*Media Impact Value(MIV )Allows brands to assign a monetary value to every post,interaction or article to measure its impact and identify contributions to brand performance across Voices,channels and regionsSource:Statista Consumer InsightsFigure 55:Dior remained the most influential beauty br
282、and globally in the first half of 202238|RetailX|February 2023RXSLX23RP 2023 ,Luxury shopping has been traditionally associated with in-store experiences,where salespeople provide memorable white-glove customer service.However,the shift to online shopping that has accelerated in the last few years h
283、as brought the luxury sector into the digital realm at last.Early adopters of digital technology have seen exponential growth since 2019.In fact,between 2019 and 2021,the percentage of online luxury sales almost doubledfrom 12%to 22%,totalling$70.1bn.The global consultancy group,Bain&Company,predict
284、s that online sales are expected to take up 30%of the luxury goods market by 2025 and,in doing so,become the most important channel for the sale of luxury goods.The luxury online experience a digital white glove servicePFS is the premier ecommerce order fulfilment provider supporting brands online.W
285、ith scalable solutions that support peak volumes and value-added services that offer deep personalisation,luxury brands look to PFS to fulfil brand-centric experiences that inspire customer loyalty.Reinforcing its fulfilment operations are proven customer service,order management,fraud prevention an
286、d payment processing solutions.PFS supports B2B and DTC operations for global brands and retailers with 25+years of experience.ExpertinsightDEFINING THE ONLINE LUXURY EXPERIENCE So,what characterises a luxury online shopping experience?Here are a few key factors:PERSONALISATION:In-store,the luxury s
287、hopper has the full attention of the salesperson,so they expect that same exclusive attention online.This means providing personalised service and attention to detail,including everything from speedy answers to questions to customised recommendations.FAST DELIVERY:Luxury shoppers dont expect to wait
288、 long for their high-end packages.Tracking information and open,proactive communication along every step of the way are the minimum expectations.Communication throughout the fulfilment process is essential.VALUE-ADDED SERVICES:Luxury customers want their purchases packaged and delivered with care.Wh
289、en it comes to pack-out,the expectation is a luxurious unboxing experience with a high-end feel.CREATING A PREMIER LUXURY ECOMMERCE EXPERIENCE A multitude of luxury brands have turned to business process outsourcing(BPO)companies for assistance in providing shoppers with a superior online experience
290、.BPO companies are able to provide a personalised experience,with an array of value-added services tailored specifically to the luxury brand.Luxury shoppers demand timely and effortless assistance,making brand knowledge a top priority.BPOs can facilitate high-end customer service through dedicated a
291、gents who are extensively trained in the brands history and culture.This is a critical part of replicating the in-store experience.With a luxury order fulfilment experience,next-day delivery and in-home assembly should be supported,as well as specific delivery times based on the customers needs.Luxu
292、ry shopping online must hit the mark at the critical unboxing point.From personalisation and branded tissue to unique box folding and product presentation,these extra touches make all the difference,allowing customers to enjoy the same boutique-like experience they would receive in-person.With the r
293、ight partnership,luxury brands can capitalise on the digital shift and offer a memorable shopping experience that exceeds customer expectations.SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY MARKET|PARTNER PERSPECTIVEKamranIqbal,Commercestrategist,PFS39|RetailX|February 2023RXSLX23RP 2023 ,40|Retai
294、lX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|COMPANY PROFILE:ESTE LAUDER Este Lauder is one of the only companies focussed entirely on luxury cosmetics and skin care.The company came to prominence through its holistic approach of creating both beauty
295、products and beauty routines for women.Aside from a dip during the pandemic in 2020,Este Lauder has delivered consistent revenue growth close to double digits for the past four years,with 2021 seeing a relatively strong post-pandemic bounce-back of 13%revenue growth.YOY=year-over-yearSource:Company
296、DBFigure 56:YoY change in revenue of Este Lauder Companies2018-2021RetailX 202316.1%8.8%-4.0%13.3%2002110 0 10 20 30 Figure 57:YoY change in web traffic to Este Lauder-36.7%42.4%6.5%-29.2%2002150 0 50 2018-2021YOY=year-over-yearSource:RetailX,SimilarWebRetailX 2023Company:Este
297、LauderHeadquartered:New York,USAFounded:1946Employees:62,000Revenues2021:$16.2bnWebvisits2021:4.6mnLuxurysegments:Cosmetics and perfumesBrands:Aerin,Aramis,Aveda,Bobbi Brown,Bumble and Bumble,Clinique,Darphic Paris,Dr Jart+,Editions de Parfums Frederic Malle,Este Lauder,GlamGlow,Jo Malone London,Kil
298、ian Paris,La Mer,Lab Series,Le Labo,MAC,Origins,Smashbox,Tom Ford Beauty,Too FacedThe group was also a luxury sector ecommerce pioneer,kicking off online sales in 1996 with its Bobbi Brown and Clinique lines.Its other premium brands followed during the 1990s and early 2000s.The company attracted 4.6
299、mn unique visits to its own site in 2021,down nearly a third on 2020 and well behind 2019.However,this slump has been attributed to many of their online sales now coming through third-party sites and marketplaces,as well as the companys more pronounced omnichannel strategy.For example,in China,Este
300、Lauder has used Tmall to rapidly grow its business,attracting more than 100,000 new users in the country in the first few months of operation.This has led them to look at how to further integrate its online and offline channels with third-party sellers,bloggers and social media sites.With its target
301、 audience increasingly among digital natives,the company is actively looking at how to harmonise its on-and offline services,giving shoppers a seamless experience across multiple channels perhaps discovering products on a blog,reading reviews and sharing comments on social platforms,sampling product
302、s in a store and then purchasing them online.More recently,Este Lauder has thrown itself into the metaverse.Its Too Faced brand has created a virtual world Maison Too Faced with its own 360-degree immersive site that offers a gamified world of beauty shopping,complete with interactive gardens filled
303、 with hero products,brand mascots to interact with and the opportunity to play games to capture discount codes.41|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|COMPANY PROFILE:FARFETCHFarFetch is one of a new breed of online fashion marketplaces c
304、atering to the luxury end of the market.It has tapped into a growing ecosystem of younger luxury shoppers who are looking for unique products.To fill this niche,FarFetch has built its business on providing an ecommerce platform for small luxury brands,boutiques and designers.The company now has more
305、 than 1,400 such sellers on its platform and,to expand,is increasingly reaching out directly to brand owners to host their wares on its site,giving these smaller players a chance to leap into ecommerce with minimal outlay.YOY=year-over-yearSource:Company DBFigure 58:YoY change in revenue of Farfetch
306、 2018-2021RetailX 202356.1%69.5%64.0%34.8%2002120 40 60 80 YOY=year-over-yearSource:RetailX,SimilarWebFigure 59:YoY change in web traffic to FarFetch 2018-2021RetailX 2023-7.6%46.7%6.6%-18.8%2002120 0 20 40 60 Company:FarFetchHeadquartered:London,UKFounded:2007Employees:5500Rev
307、enues2021:$2.3bnWebvisits2021:93.8mnLuxurysegments:Clothes,shoes,accessories,jewellery,designer cosmetics,perfumesBrands:FarFetch is a marketplace that sells items from more than 1,400 brands,stores and boutiques from all over the worldThis model has been very successful.Being online-focussed,the co
308、mpany saw a boom in sales and traffic across 2019 and 2020 as shoppers were forced almost exclusively online.While this has tailed off to some degree,dropping 18%in 2021 as the market normalises,the site continues to look at new ways to service its customer base.Having signed up all eligible and int
309、erested boutiques and designers that it can find,the company has shifted to a plan of expansion through acquisition and deals.For example,in January 2022,it bought leading luxury beauty marketplace Violet Grey,adding their vast array of beauty and cosmetic products.The move opens up the site to the
310、burgeoning luxury beauty market,with an estimated annual worth of$69bn globally,as well as adding new content to its site to help drive traffic.The company has looked to generate further growth by embedding its luxury marketplace model into the wider luxury sector.In mid-2022,the company effectively
311、 partnered with Richemont,buying a 47.5%stake in Richemont-owned YOOX Net-a-Porter(YNAP),a hybrid luxury clearance seller and shoppable digital magazine.Richemont chairman,Johann Rupert,says this is a step towards building an“independent neutral online platform for the luxury industry”for high-end b
312、rands and their customers.The deal has attracted the attention of the UKs Competition and Mergers Authority(CMA).Should the deal go through,it will see Richemont use Farfetchs tech to sell its brands through a marketplace model,while giving FarFetch access to more luxury brands and products.42|Retai
313、lX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|COMPANY PROFILE:KERING Kering Group is one of the behemoths of global luxury,owning some of the sectors key brands.Gucci is a strong performer,generating$6.5bn of the groups$19.5bn revenue,despite a dramati
314、c fall-off in web traffic across 2021.Balenciaga saw similar falls in web traffic,dropping 31%in 2021.This has been symptomatic of the whole group,with online traffic falling quickly following the artificial pandemic high.Clearly,many luxury consumers have reverted to their pre-Covid shopping habits
315、 and buying from physical stores YOY=year-over-yearSource:Company DBFigure 60:YoY change in revenue of Kering Group 2018-20X21RetailX 202326.9%16.1%-17.6%35.1%2002120 0 20 Company:Kering GroupHeadquartered:Paris,FranceFounded:1963Employees:42,800Revenues2021:$19.5bnWebvisits2021:Gucci 27.
316、4m,Balenciaga 5.6mLuxurysegments:Clothes,shoes,accessories,jewellery,designer cosmetics,perfumes,eyewearBrands:Gucci,Saint Laurent,Bottega Veneta,Balenciaga,Alexander McQueen,Brioni,Boucheron,Pomellato,DoDo,Qeelin,Kering Eyewearwithin their own markets.Despite this shrinkage in traffic numbers relat
317、ive to the peak,traffic remains higher than it was pre-pandemic,suggesting that consumers are now using online and mobile as part of their shopping journey before heading to stores to close the sale with that instore experience.This is showcased by Kering Groups brands continuing to operate a footpr
318、int of 1,565 stores worldwide.This footprint also indicates the direction of travel for the group.While there are 233 stores in Japan,251 in North America and 331 in Western Europe,the bulk 750 are in what Kering dubs emerging countries.These are largely focussed on China and South East Asia.The com
319、pany already banks 34%of its revenue in the Asia-Pacific,compared to 27%in the US and 26%in Western Europe,so is looking to drive growth there.When looked at by category,half of Kerings revenue comes from leather goods,21%from shoes and 15%from ready to wear luxury fashion.Watches and jewellery make
320、 up just 8%of its business,despite moves to take a slice of the watch sector with a partnership with fellow luxury brand Cartier in 2021.This partnership is marked out by being founded in the creation of the Watch&Jewellery Initiative 2030,with the aim of bringing together these sectors globally to
321、move towards a low-carbon future.Kerings other jewellery brands Boucheron,Pomellato,DoDo and Qeelin all perform well,with Qeelin adding Chinese styles to the groups jewellery presence in Europe and the US,as well as targeting the Chinese market.YOY=year-over-yearSource:RetailX,SimilarWebFigure 61:Yo
322、Y change in web traffic to Gucci 2018-20X21RetailX 2023-6.3%4.4%-7.5%-24.3%2002140 20 0 20 43|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|COMPANY PROFILE:LVMH GROUPCompany:LVMH Mot Hennessy Louis VuittonHeadquartered:Paris,FranceFound
323、ed:1987Employees:150,000Revenues2021:$76bnWebvisits2021:Dior 20.7mn,Louis Vuitton 41.3mnLuxurysegments:Clothes,shoes,accessories,jewellery,designer cosmetics and perfumes,eyewear,wines,champagnes and spirits,yachts,hotels and cruises Brands:60 subsidiaries managing 75 brands,including Dom Prignon,Gl
324、enmorangie,Hennessy,Krug,Mercier,Mot&Chandon,Veuve Clicquot,Christian Dior,Fendi,Givenchy,Kenzo,Louis Vuitton,Marc Jacobs,Stella McCartney,Benefit Cosmetics,Fenty Beauty by Rihanna,Guerlain,Sephora,Bulgari,Hublot,TAG Heuer,Princess Yachts and Tiffany&CoAs a result,LVMH Group dominates the sector and
325、 owns many of the major players and brands that make up the industry.It has,in many ways,created the mould for the modern luxury business by integrating numerous aspirational brands.As a result,the LVMH Group has seen immense growth since its inception,expanding globally and bucking the industry tre
326、nd,with strong revenue growth in 2021,rising 49%to hit$76bn way above its pre-pandemic high of$60bn in 2019.While web traffic has fallen back after the ecommerce boom of 2020,the group still attracts more than 40mn uniques every year.50%of revenues almost$40bn globally come from fashion and leather
327、goods.Watches and jewellery make up 12%,perfumes and cosmetics 9%and wines and spirits 8%.The largest market for the Group lies in Asia,which accounts for 34%of revenues around$26bn.The US makes up 30%and Europe accounts for 17%.Of the latter,France contributes around 9%of LVMHs total global revenue
328、,making it the single-largest country market,just behind the$6bn contributed by Japan.Even closing 120 stores in Russia due to the invasion of Ukraine although it continues to pay the wages of its Russian employees LVMH remains dominant in the global luxury market.Having the largest market cap of an
329、y French company also sees the company continue to grow through acquisition,recently buying jeweller Piedmont,for instance.YOY=year-over-yearSource:Company DBFigure 62:YoY change in revenue of LVMH Mot Hennessy-Louis Vuitton 2018-2021RetailX 202314.8%8.7%-15.2%49.0%2002120 0 20 40 60 YOY=
330、year-over-yearSource:RetailX,SimilarWebFigure 63:YoY change in web traffic to Louis Vuitton 2018-2021RetailX 2023-44.4%45.9%-3.4%-22.7%2002150 0 50 The leviathan of luxury,LVMH Mot Hennessy Louis Vuitton(LVMH Group)operates a globe-straddling 75-plus brands from 60 subsidiaries.It has fin
331、gers in every single segment of the luxury market pie,even selling yachts.44|RetailX|February 2023RXSLX23RP 2023 ,SUSTAINABILITY REPORT|INTRODUCTIONGLOBAL LUXURY SECTOR REPORT|COMPANY PROFILE:RICHEMONTIn 1993,the group split its luxury goods holdings into the newly created Vendme Luxury Group(Vendme
332、)and the tobacco business into Rothmans International.The latter then became part of British American Tobacco in 1999 and by 2008,Vendme Richemont,as it then was,divested itself of all tobacco interests.It then acquired a 60%interest in jewellers Van Cleef&Arpels and the Richmont Group of today took
333、 shape.The company was an early proponent of luxury ecommerce,buying a 30%stake in Net-a-Porter,an online fashion magazine that,in 2002,featured ground-breaking shoppable links.This ownership increased to 90%in 2010 before Net-a-Porter was combined with online luxury fashion clearance Source:Statista Consumer Market InsightsRetailX 2023Figure 64:YoY change in revenue of Compagnie Financiere Richem