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1、#FutureofConsumerGoodsJanuary 2024The market of luxury goods2 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All righ

2、ts reserved.The market of luxury goodsContents 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.2Th

3、e market of luxury goodsQuick statistics05Introduction06An overview of the global personal luxury goods market 09The growing personal luxury goods market of Greece18Understanding and attracting todays luxury consumer30Key Findings04Foreword03Luxury brands embracing sustainability44The growing signif

4、icance of the pre-owned market of luxury goods52The digital evolution of luxury brands57Interview65End notes68Our team72Special focus on key trends433 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliate

5、d with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsThe luxury goods market emerges as a resilient segment of the economy,demonstrating a remarkable performance,even in the aftermath of economic downturns.Through the years,lu

6、xury goods have evolved from a purchase preference based on functional and social value,to a lifestyle choice that spans from the way consumers self-identify to the utilisation of these goods as an investment opportunity.Nowadays,consumers express their awareness towards environmental issues through

7、 their requirements from luxury brands.They demand brands to embrace sustainable practices,adopt the notion of circular economy and guide the rest of the brands to that direction.Additionally,technology is set to drastically change the personal luxury goods market by introducing novel applications a

8、nd sources of value connected to the luxury audience.As NFTs,generative AI and multimodal AI start to become part of the luxury consumers life,brands that fail to keep up with new developments will lose the younger customer base and thus,the possibility of leading the market in the future.We anticip

9、ate the personal luxury goods market flourishing in Greece.International brands have been increasingly enhancing their physical presence with new store openings,both on the mainland and popular islands.The traditional affection of the Greek consumer to luxury goods,coupled with the increasing volume

10、 of tourist flows,ensure the continuous growth of the Greek personal luxury goods market in the foreseeable future.Foreword 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International L

11、imited,a private English company limited by guarantee.All rights reserved.3The market of luxury goodsDimitrios TanosPartner,Head of Consumer Goods and Retail SectorKPMG in Greece4 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of indep

12、endent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsKey Findings The outlook of the global personal luxury goods market remains optimistic,despite economic challenges.Broken down by region,Asia ho

13、lds the largest share of personal luxury goods at 38 percent,followed by the Americas with a 32 percent share,Europe with 27 percent,and the rest of the world with 4 percent.1The Greek high-end personal luxury goods market continued its growth in 2022,boosted by the elevated tourism volume and new r

14、etail openings.Athens and Mykonos are key shopping destinations,with a range of different distribution models adopted by the brands.2Gen Zs push for sustainability is redefining luxury,while brands target younger generations at the channel where they are most engaged on social media.3Luxury brands g

15、lobally are engaging in sustainable practices,focusing on ethical sourcing,responsible supply chains,energy efficiency,circularity,and fair labour.4The luxury goods pre-owned market is gaining traction,with leading brands investing directly in this market or through partnerships with existing resale

16、 platforms.5Technological advancements are challenging luxury brands to integrate digital innovations while maintaining their heritage.They are adopting digital strategies and tools,including NFTs,generative AI and multimodal AI,to enhance customer engagement and appeal to the tech-savvy youth.65 20

17、24 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsQuick statistics80%of the

18、personal luxury goods sales are generated by the top 10 global personal luxury goods companies+3.2%CAGR projections of global sales between 2023 and 20281234.4BNet sales of global personal luxury goods companies in 20221+2.3%CAGR of sales between 2018 and 2022142.4%is LVMHs share within the sales of

19、 the top 10 global personal luxury goods companies in 2022,positioning it as the leader in the personal luxury goods segmentGlobal personal luxury goods sales are expected to increase over the coming years,mainly due to the increase in disposable income,the evolving consumer preferences toward luxur

20、y goods,the technological advancements employed by luxury brands,and the elevated brand awareness.509.8MNet sales of the companies offering personal luxury goods in 2022 in Greece+13.2%CAGR of luxury goods sales between 2018 and 2022+36.1%Year-on-year growth of luxury goods sales between 2021 and 20

21、22 in Greece 18%EBITDA margin of personal luxury goods companies in 2022Greece has become a promising market for personal luxury goods.The potential of the Greek market is evident in the consistent sales growth over the past five years,as well as in the trust placed by both domestic and internationa

22、l luxury brands in the market,demonstrated with new store openings across Greece.Sources:Companies Financial Statements;KPMG in Greece analysisIntroduction7 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms aff

23、iliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsLuxury goods are a segment of products and services across multiple sectors of the economy,often characterised by an above-average price,among other features.The luxur

24、y goods market as a cross-sector segment consists of several sub-segments:the personal luxury goods,the luxury hotels&real estate,the luxury automobiles,fine dining,high-end furniture&houseware and fine art.The luxury goods universe and our focus on personal luxury goodsThis survey focuses on both t

25、he Greek and global market of the high-end personal luxury goods sub-segment.This includes globally renowned brands,as well as established domestic brands.The companies that constitute the universe of this research offer ultra-premium products,available at brick-and-mortar stores across the country.

26、Our survey comprises several types of high-end luxury retail models,including:mono-brand stores of well-known fashion houses,multi-brand stores,which in some cases may hold exclusive partnerships with brands,corners in malls with distinct TINs,as well as seasonal pop-up boutiques.In 2022,the persona

27、l luxury goods generated sales of approximately 510 in Greece,achieving an increase of more than 35 percent compared to 2021.Globally,the personal luxury goods is the second largest sub-segment of luxury goods2,with sales of 332B.The personal luxury goods market includes high-end apparel,footwear&ba

28、gs,fine jewellery&watches,luxury eyewear,premium personal care and beauty products,as well as stationary.Our focus:Personal luxury goodsOur focus:Personal luxury goods8 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent memb

29、er firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsThe global marketplace of personal luxury goods is a dynamic and ever-evolving sub-segment,continuously adapting to the changing preferences and values of

30、customers.The new era in the global market is marked by unprecedented technological advancements,shifting socio-cultural landscapes and heightened environmental consciousness.The trends shaping the luxury market are more intriguing and transformative than ever before.The main trends shaping the luxu

31、ry goods market include:Key market trends in the luxury goods worldLuxury brands intensify sustainability strategiesCompanies are driving their sustainability targets through brand innovations.Most of their initiatives are targeted towards reducing plastic pollution,making packaging recyclable,decre

32、asing carbon footprint and introducing eco-friendly products.Conscious consumption is gaining prominence and brands align their values respectively,with consumers valuing products that are developed under fair labourconditions and sustainable sourcing of materials.The pre-owned market gains signific

33、anceThe pre-owned market in luxury has redefined the way consumers perceive and access high-end goods.Consumers seek high-quality,second-hand luxury items as a means of reducing environmental impact,promoting longevity in product lifecycles,and accessing coveted brands at a fraction of the original

34、cost or delivery time.Luxury firms have started to consider the pre-owned market as an alternative distribution channel,investing in resale platforms,conducting partnerships or creating their in-house resale strategy.Experimentation with the latest technologiesWhile striving to remain loyal to their

35、 great heritage,luxury brands have been experimenting intensively with the new technologies,such as NFTs,generative AI and multimodal AI.Generative AI has the potential to enhance luxury brands operations and efficiency along the value chain as an assistive tool for various professions.NFTs can func

36、tion both as the digital identity of a product and as an engagement tool for digital-savvy customers and younger generations.2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International

37、Limited,a private English company limited by guarantee.All rights reserved.An overview of the global personal luxury goods market 10 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG Intern

38、ational Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsThe global market of personal luxury goods reached a five-year maximum in 2022In 2022,macroeconomic challenges,such as the energy crisis,the war in Ukraine,the struggle of the Chinese economy

39、 and the global inflation,put extra pressure on costs and created supply chain disruptions,causing notable downturns in the global markets.However,the consumption of luxury goods remained resilient.The global market of personal luxury goods fully recovered in 20221.After 2020,the market has been con

40、tinuously growing,and in combination with the increasing adoption of growth strategies by global key players,the global personal luxury goods revenue reached new heights.In detail,the revenue in 2022 has reached 234.4B a five-year maximum that exceeded 2018 levels by 9.4 percent with a revenue CAGR

41、of 2.3 percent between 2018 and 2022.It is evident that the five-year period can be divided into two groups:the pre-and post-pandemic eras,when personal luxury goods market was increasing,and 2020 the pandemic year when personal luxury goods market recorded a noticeable decline.214.3228.9195.1222.12

42、34.4200212022+2.3%Global revenue of personal luxury goods during 2018-22(Billion)Notes:Cosmetics and Fragrances revenues are excluded;Financial data calculations based on 31/12/2022exchange rates;CAGR:Compounded Annual Growth Rate11 2024 KPMG Advisors Single Member S.A.,a Greek Societe An

43、onyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goods265.5275.6285.0294.0302.2311.25202620272028Projection of global reven

44、ue of personal luxury goods during 2023-28(Billion)Notes:Cosmetics and Fragrances revenues are excluded;Financial data calculations based on 31/12/2022exchange rate;CAGR:Compounded Annual Growth RateProjections suggest a steady rise in the revenue sales of personal luxury goods worldwideThe global m

45、arket of personal luxury goods is expected to grow at a constant rate with a revenue CAGR of 3.2 percent for the period 2023-281.If personal luxury goods forecasts hold,then the expected size of the market worldwide will reach 311.1B in 2028.This increase in the market value is anticipated to be dri

46、ven by several key factors reflecting the evolving consumer preferences and foreseen economic trends.More specifically,an expected rise in disposable income across different demographic segments will most probably increase the appetite for luxury items.In addition,technological advancements and the

47、continuous rise of online channels are likely to contribute to greater accessibility,expanding the customer base.Finally,the rise of brand awareness through marketing strategies in social media and promotions will continue to be a considerable factor,contributing to increased sales3.Estimate12 2024

48、KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsIn 2022,Asia tops the list of

49、 global personal luxury goods shareThe global share of Asia in the personal luxury goods market has reached 38 percent.China contributes the largest share with 17 percent,Japan adds another 7 percent,and the other Asian countries contribute the remaining 14 percent.America follows in the second plac

50、e with a share of 32 percent.Europe has a market share of 27 percent,while the rest of the world is responsible for the remaining 3percent of the market.Among other factors,tourism is contributing significantly to increased sales across regions.In detail,the Asian market is booming due to the increa

51、sed domestic travelling of Asian consumers,the elevated Russian tourist spending and the increased demand for jewellery and watches.Americas share is made up of luxury consumers spending on personal luxury goods,while it is influenced by the fact that a variety of US consumers tend to purchase perso

52、nal luxury goods from abroad due to price differentials.The European market share is shaped by the lift of travel restrictions,the tourist flows from the US and the Middle East reaching new heights,as well as the rise in domestic consumption.Share of personal luxury goods market by region17%7%14%Res

53、t of worldEuropeAmericasAsiaShare of global personal luxury goods market by region in 20224(%)ChinaJapanRest of Asia32%27%38%3%13 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG Internati

54、onal Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsLVMH dominates the personal luxury goods market worldwideIn 2022,following the Covid-19 era,the market started to recover with companies including the personal luxury goods firms increasing thei

55、r revenues.Among them,LVMH had the highest revenue for 2022 with 79.2.Based solely on revenue,it is evident that LVMH stands in a league of its own,with a revenue three times greater than that of the second-ranked firm,Kering,which amounted to 20.4B.The revenue differences among the rest personal lu

56、xury goods companies are smaller.Richemont in the third place reached 19.2B revenue,while Chanel achieved a revenue of 16.1B.Herms and Chow Tai Fook Jewellery Group*closed the year with revenues of 11.6B and 11.4B,respectively.The list of the top 10 global personal luxury goods companies also includ

57、es companies,such as Rolexe,Lao Feng Xiang,China National Gold Group Gold Jewellery and Capri Holdings*.Global leaders in personal luxury goods5.36.48.58.9e11.411.616.119.220.479.2Capri Holdings LimitedChina National Gold Group Gold JewelleryCo.,LtdLao Feng Xiang Co.,Ltd.Rolex S.A.Chow Tai Fook Jewe

58、llery Group LimitedHerms International SCAChanel LimitedCompagnie Financire Richemont SAKering SALVMH Mot Hennessy-Louis Vuitton SETop 10 Global personal luxury goods companies revenue in 2022(Billion)Notes:Financial data calculations based on 31/12/2022 exchange rate;e:Estimation;Companies related

59、to Cosmetics are excluded from the sample;*FY2023 ends on 31stof March 2023 and on 1stof April 2023 Sources:Companies Financial Statements;KPMG in Greece analysis14 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member f

60、irms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsIn an ever-evolving world defined by technological advancements,shifting socio-economic landscapes,and changing consumer behaviours,the dynamics of society are

61、 constantly in flux.All these factors have an impact on the evolution of the global luxury market.The main forces of demand in the luxury goods market globally are the following:Stable growth and rapid recovery after economic downturns The market of luxury goods recovers quickly after economic downt

62、urns.This characteristic is evident in the post-pandemic era,when luxury goods sales rebounced and even surpassed the pre-pandemic levels.Additionally,during the crisis of 2008-09,the value of the luxury goods market decreased by 9 percent,however the market quickly recovered5.This swift recovery ca

63、n be attributed,in part,to high-net-worth individuals who,being less affected by economic downturns,maintain their purchasing patterns over time.Inelastic demand Inflation and increase in interest rates drive up the prices of goods,however demand for luxury goods appears intact.In the luxury goods w

64、orld,high prices are expected.Given that the audience of luxury brands comprises mostly of loyal customers,increased prices affect the demand for such products to a small degree.Accumulation of savings during the pandemic The pandemic prompted consumers to restrict their spending,resulting in an acc

65、umulation of savings,prompting a reassessment of perspectives on life and its meaning.As restrictions were lifted,many sought fulfilling experiences,contributing to the increased sales of luxury goods.Growing affluent middleclass The growth of the affluent middle class worldwide has marked a transfo

66、rmative era for the luxury goods market.As disposable income rises and purchasing power increases,more people desire a lifestyle that reflects their new-found affluence,turning to luxury goods as a means of self-expression and social status.Driving forces behind global luxury goods market1234 2024 K

67、PMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved14The market of luxury goods15 2024 KPMG Advisors Single

68、Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsThe Chinese consumer The expansion of the middle c

69、lass in emerging markets,such as China,has created a larger customer base for luxury goods.In addition,before the pandemic,Chinese consumers tended to purchase luxury goods abroad due to the rich heritage and authenticity of western luxury brands,better prices and tax-free shopping.However,in the la

70、st years,the game has changed.More and more Chinese prefer to shop within the country,taking advantage of the ease of in-country shopping,better services,connection with staff for more favourable advice,as well as the enhanced presence of global luxury brands with new store openings6.Gen Z Gen Z con

71、stitutes a significant percentage of luxury brands shoppers and,together with Gen Y and Gen A,are expected to make up a huge portion of luxury purchases by 2030.Gen Z consumers are reshaping the way luxury brands engage with their audience,they are more tech-savvy and embrace values of authenticity,

72、individuality and sustainability,shifting luxury consumption patterns.Influencer and celebrity endorsement In the digital age,social media platforms serve as a direct and interactive channel for brands to engage with their audience.Numerous luxury brands collaborate with influencers,celebrities and

73、online content creators to promote their products to a broader audience.Companies find ways to invest in this type of collaborations,in order to promote their products and increase their customer base.56716 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG g

74、lobal organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsThe reopening of Chinas borders after the pandemic created a significant opportunity for luxury brands.In the previou

75、s decade,Chinese consumers emerged as the largest buyers of luxury goods,accounting for one-third(93B)of global sales.Two-thirds of those sales occurred during overseas trips,particularly in Europe,while the remaining third took place in mainland China7.Currently,the share of luxury goods-personal l

76、uxury goods included-attributed to Chinese consumers has dropped to 25 percent,but it is forecasted to reach 40 percent of the market by 20308.During the pandemic,travel restrictions compelled Chinese consumers to stay within their country,denting consumer confidence.Purchasing behaviour changed and

77、 individuals started to reconsider their approach to consumerism.Personal luxury goods sales in China9declined during that period,reaching approximately 38B in 2020.After two years of restrictions,sales rebounded,reaching almost 46 in 2022.China is expected to surpass the US and emerge as the global

78、 leader in the luxury market by 202510,should Chinese consumers continue to purchase luxury goods domestically.The main driving forces behind Chinas luxury market expansion are the countrys rapidly increasing income levels11and middle-class consumption.According to the World Bank,it is estimated tha

79、t by 2030,the middle class of China could consist nearly 70 percent of its population,and consume goods and services worth nearly 9.4(out of the expected global middle-class consumption of 60)12.This implies that an increasing number of people will have disposable income to spend on items,such as lu

80、xury goods.China has long served as the primary growth market for numerous luxury brands.The rapid economic development has also elevated the sophistication levels of consumers.Consequently,international brands must grasp the evolution of Chinese consumer preferences and actively work towards provid

81、ing an enhanced customer experience for sustainable growth in the market.The rebound of the Chinese marketNotes:Financial data calculations based on 31/12/2022 exchange rate17 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independe

82、nt member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsAccording to Cambridge dictionary13,“Daigou”refers to someone,who is outside of China and buys goods for someone living in China.It typically descri

83、bes a gray marketplace where purchases and sales of goods and services take place through a distribution channel that is not authorised.These practices started almost a decade ago,when luxury brands priced their wares as much as 80 percent higher in China than in Europe14.According to Re-Hub report“

84、The Daigou Index 2.0 in September 2023,the size of the gray market in China was estimated at 76B,reflecting a growth of over 40 percent since 201915.In response,government officials have imposed tighter border controls,while brands have harmonised retail prices globally and expanded their offline an

85、d online presence in China16.Typically,a Daigou works for a Chinese,and acts as a personal shopper who buys luxury goods from global markets,in order to find products that are either lower-priced or unavailable in China.Another reason for the popularity of Daigou is the trust towards these individua

86、ls.They have established their reputation by consistently providing authentic luxury goods to their“clients”,alleviating concerns about counterfeit products.In addition,there are several platforms supporting this growing market,gaining significant buying power and leading to a boost in sales of bran

87、ds in non-Chinese markets15.rands can take measures against Daigou sales to eliminate the phenomenon and protect the cannibalisation of revenue in the Chinese market.These measures may include requesting audited monthly sales reports from wholesale partners to deter mass resales,and implementing quo

88、ta systems in boutiques to monitor sales15.“Daigou”continues to rise in ChinaNotes:Financial data calculations based on 31/12/2022 exchange rateThe growing personal luxury goods market of Greece19 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global orga

89、nization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsThe demand for high-end personal luxury goods has been rapidly increasingover the last few years Greece has emerged as a promis

90、ing market for personal luxury goods,experiencing a notable increase in sales mainly attributed to tourism and new store openings.More specifically,in 2022,sales of high-end personal luxury goods reached 509.8M,achieving a 36.1 percent YoY growth compared to 2021.The potential of the Greek market in

91、 personal luxury goods is evident in the substantial climb in net sales in 2022 compared to previous years.In similar fashion,the five-year net sales CAGR of the companies offering personal luxury goods is shaped at 13.2 percent.Similar to the global trend of personal luxury goods sales,Greece exper

92、ienced a significant downturn in 2020,with sales plummeting to 245.7M,a value less than half of the 2022 sales.This decline was anticipated due to the impact of the Covid-19 outbreak,resulting in store closures and quarantine measures.310.5351.8245.7374.6509.8200212022+13.2%509.8MNet sale

93、s of the companies offering personal luxury goods in 2022 in Greece+13.2%CAGR of net sales between 2018 and 2022+36.1%Year-on-year growth of net sales between 2021 and 2022+13.3%Year-on-year growth of net sales between 2018 and 2019 Net sales of personal luxury goods in 2018-22 in Greece(Million)+36

94、.1%+13.3%Sources:Financial information from the General Commercial Register(G.E.MI.)for companies based in Greece;KPMG in Greece analysis20 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG

95、 International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goods38.9%38.5%36.3%37.9%37.6%200212022Positive outlook and improving financial performance for high-end personal luxury goodsThe financial performance of the Greek high-end pers

96、onal luxury goods market can be assessed through profitability and resilience measures.In terms of profitability,we employ the Gross profit margin(GPM),the EBITDA margin,and the Return on capital employed(ROCE),while resilience is evaluated through the Net debt over EBITDA.Gross profit margin(GPM)se

97、rves as a crucial profitability indicator,representing the percentage of revenue that can be used to cover other expenses and generate profit.The ultra-luxury personal goods market has maintained a relatively stable gross profit margin during the period from 2018 to 2022,with a CAGR of-0.8 percent.W

98、hile the gross profit margin has increased over the last two years compared to that of 2020,it has exhibited a gradual decline when compared to the figures of 2018 and 2019.EBITDA margin measures a companys operating profitability,showcasing its ability to generate cash flow independently of its cap

99、ital structure or tax implications.Personal luxury goods companies have experienced an overall increase in their EBITDA margin with a CAGR of 5.4 percent between 2018-22.Over the five-year period,the EBITDA margin of the market reached its peak in the last two years,achieving 18.6 percent and 18 per

100、cent in 2021 and 2022 respectively,reflecting the markets increasing profitability levels in the country.14.6%15.1%9.8%18.6%18.0%200212022+5.4%-0.8%Gross profit margin(GPM)of companies offering personal luxury goods in Greece in 2018-22EBITDA margin of companies offering personal luxury g

101、oods in Greece in 2018-22Sources:Financial information from the General Commercial Register(G.E.MI.)for companies based in Greece;KPMG in Greece analysis21 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affi

102、liated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsNet debt to EBITDA ratio assesses a companys ability to settle its liabilities,indicating the number of years required to repay its debt.The Net debt to EBITDA ratio ha

103、s been relatively low,showcasing that ultra-luxury brands are successfully handling their debt levels,consistently maintaining them below their earnings.More specifically,in the last two years the Net debt to EBITDA ratio of the personal luxury goods segment reached its five-year lowest values,with

104、the figure for 2022 being marginally negative.Return on Capital Employed(ROCE)measures a companys efficiency in generating profits from its invested capital,indicating the percentage return on capital investment.he ROCE of the Greek personal luxury goods market has been increasing,with a CAGR of 8.7

105、 percent over the last five years.In 2022,ROCE reached its highest value with 29.4 percent,achieving a noteworthy 32 percent YoY growth between 2021 and 2022.ROCEs performance demonstrates the increasing effectiveness in leveraging invested capital by luxury goods brands in Greece.Net debt to EBITDA

106、 ratio of companies offering personal luxury goods in Greece in 2018-22-1.6%0.61.02.70.3-0.202021202221.0%19.6%5.8%22.3%29.4%200212022+8.7%Return on capital employed(ROCE)of companies offering personal luxury goods in Greece in 2018-22Sources:Financial information from the Gene

107、ral Commercial Register(G.E.MI.)for companies based in Greece;KPMG in Greece analysis22 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company lim

108、ited by guarantee.All rights reserved.The market of luxury goodsDominant destinations for personal luxury goods across GreeceThessalonikiAs the second largest city in Greece,Thessaloniki hosts a number of multi-brand stores,as well as some mono-brand boutiques that offer personal luxury goods.Sani R

109、esort,HalkidikiThe awarded luxurious beach resort,Sani Resort,hosts boutiques of international luxury brands,as well as branches of established local multi-brand stores.AthensBeing the capital of Greece and a historic city,Athens includes some of the countrys most upscale neighbourhoods,such as Kolo

110、naki,Kifissia,Glyfada,Psychiko etc.,which host flagship stores and boutiques of international and local high-end luxury brands,as well as multi-brand retailers selling these brands.Furthermore,department stores,such as Golden Hall and Attica Department Stores serve as destination hotspots,attracting

111、 customers from all over Attica.MykonosThe world-renowned destination of the international jet set,Mykonos is home to plenty of international and local top-tier luxury brands.Nammos Village,the 12,000 square meter ultra luxury shopping centre17in down-town Mykonos,as well as the Cavo Tago 5-star lux

112、ury hotel,are some of the locations that top-tier luxury brands have chosen and continue to choose as their boutique locations.SantoriniThe picturesque island of Santorini is a global destination of high-end tourists and has developed its own ultra luxury market.Luxury apparel,footwear and bags are

113、offered through multi-brand boutiques,while fine jewellery and watches are offered through official boutiques of leading national and international brands.Costa Navarino,MessiniaHosting a number of luxury and ultra-luxury resorts,Costa Navarino is a hotspot for high-end tourism.Among others,it offer

114、s its guests personal luxury goods shopping options mainly through multi-brand stores,as well as via some mono-brand boutiques.Note:KPMG in Greece research23 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms af

115、filiated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsInternational luxury brands establish their physical presence in countries employing different retail distribution models,such as directly operated stores branches of

116、 the group or via partnerships with local luxury retailers who operate either mono-brand boutiques or multi-brand stores.The majority of the leading high-end luxury goods players in Greece directly operate their stores,having increased control over distribution,financials and brand image,as well as

117、greater proximity to the customer and ability to create enhanced experiences for them.In Greece,leading luxury goods houses,such as Louis Vuitton,Herms and Prada,have physical presence mainly through directly operated mono-brand stores and boutiques.Some of these brands may also selectively offer pr

118、oducts through other retailers.Other brands do not operate local boutiques directly,but instead engage in partnerships with local luxury retailers that may offer the products through their multi-brand stores or operate mono-brand boutiques as franchisees.Notably,some retailing partnerships are exclu

119、sive,as exemplified by the longstanding 30-year collaboration between Chanel and their Greek operator,showcased through the Greek retailers multi-brand storeThe retail distribution models of international personal luxury brands in Greecenamed Linea Piu,which,in 2023,evolved into the first Chanel bou

120、tique in the country18.Some luxury brands operate in multiple locations,holding a flagship store in a city center-usually in Athens-and additional pop-up boutiques in popular islands.This trend is particularly evident among fine jewellery and watch brands,which often establish standalone stores or b

121、outiques in islands and within luxury resorts across the country.In other cases,local franchisees may operate stores in city centers,while the brands themselves directly operate seasonal pop-up boutiques.Notably,over the last two years,certain international luxury goods brands have established tempo

122、rary boutiques for the summer season in islands or beach resorts,even without having a permanent store elsewhere in the country.Sources:Companies websites Degrees of brands footprint strength in a market No physical presence online retail and international delivery though 3PLStrong physical presence

123、Weak physical presencePartnership with local retailers with mono-brand stores-franchiseesPartnerships with local retailers with multi brand storesExclusive partnership with a single local retailer with multi brand storesDirectly operated permanent storeDirectly operated seasonal pop-up boutique03125

124、424 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsGreece,and especiall

125、y Athens,is a significant location for several top-tier players in the personal luxury goods market,having become an investment destination of high-end luxury brands for physical retailing through new store openings,redevelopment and upsizing of existing stores19.The focus remains traditionally on t

126、he prestigious area of Kolonaki,and lately has been expanding in the nearby neighbourhoodscloser to Syntagma square,as well.Noteworthy,since 2021,upscaling real estate moves by renowned brands have been recorded,following the easing of strict pandemic measures.n 2021 alone,Athens experienced a surge

127、 in store re-openings,relocations,as well as property acquisitions by high-end luxury brands.Indicatively,the Gucci boutique re-opened in Panepistimiou avenue,Athens,operated directly by the brand20.Moreover,the Tods boutique,operated by the Fais Group,was relocated to the same street with a newly d

128、esigned top-class boutique21.Additionally,Prada demonstrated a significant commitment to physical retailing in Greece in 2021 by acquiring for 19M the store they had operated in Kolonaki since 2008,and subsequently renovating it in 202222.High-end luxury brands continue to express keen interest in o

129、perating in Athens city centre and more specifically in the prestigious Kolonaki area.These central locations are attractive not only due to their proximity to landmarks and their high traffic,but also because of their established high profile.In 2023,the first Chanel boutique in the country opened

130、in Kolonaki near the Louis Vuitton,Prada and Dior boutiques18.The choice of the location is influenced not only by the prominence of neighboring brands,but also by the significance of the buildings and their architecture.Earlier in 2023,Montblanc relocated to a renovated neoclassical building in the

131、 city centre23.Furthermore,the spacious and luxurious Greek boutiques are designed by specialised architects and interior designers appointed by the brands,in order to reflect the brands identity and ensure an unparalleled customer experience.Greece confirming the resilience of brick n mortar luxury

132、 retailing25 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsThe rise of

133、 luxury watch boutiquesBefore the Covid-19 outbreak,international watch brands had started to increase the number of their physical stores internationally.he pandemic postponed their expansion plans and also triggered a shift in the consumer patterns towards localisation.This change reinforced watch

134、makers decision to continue the new store openings.Today,many brands have already multiplied the number of their physical stores internationally,targeting not only the top commercial cities,but other locations as well.Furthermore,there is an increasing trend of high-end watch brands to invest in lau

135、nching their own boutiques instead of relying on local retailers,taking more control over the supply of their products in the local markets24.26 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with

136、 KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsLeading international fine jewellery and watch brands have been strengthening their presence in the Greek market over the last five years.Some of these brands already offering the

137、ir products via authorised multi-brand retailers,opened recently their mono-brand boutiques.At the same time,other brands already operating mono-brand stores have expanded their network,establishing additional boutiques in new prestigious locations.These fine jewellery and watch brands have expanded

138、 their presence in Greece either through directly owned stores or in partnerships with well-established retailers,while in some cases they have partnered with top Greek jewellers.Indicative partnerships include Hublot with Gofas and Bvlgari with Kessaris.In geographical terms,there are brands Hublot

139、,for instance that have commenced their journey in Greece by opening their first boutique in Athens,before extending their presence in islands,such as Mykonos and Santorini.Other brands,such as Bvlgari and Panerai,firstly tested the waters in popular islands,and then established their presence in th

140、e mainland by opening a boutique in the so-called“Road of watches”,i.e.Voukourestiou street,in Athens.2019Bvlgari pop-up storeMykonos,Nammos VillageHublot boutique Athens2020Launch of Lalaounise-shop2021WC Schaffhausen boutique AthensHublot boutiqueMykonosBreitling flagship storeAthens2022Bvlgari bo

141、utique AthensCartier boutiqueMykonos,Nammos Village Panerai boutiqueSantorini2023Hublot boutiqueSantorini Panerai boutiqueAthensFine jewellery and watches:New store openings in 2019-23Note:KPMG in Greece researchFine jewellery&watches are strengthening their position in the Greek market 27 2024 KPMG

142、 Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsGreece is listed among the top lu

143、xury destinations in Europe.Athens and the renowned islands of Cyclades,particularly Mykonos and Santorini,belong among the top global destinations for affluent visitors.Hence,high-end luxury brands expansion in Greece,as well as their improved financial results over the last two years are attribute

144、d partially to the increased number of visitors and their willingness to spend on luxury items.Indices of inbound tourism in Greece showed significant increase between 2021 and 2022.Specifically,total arrivals in 2022 almost doubled compared to 2021 an 89.3 percent increase approaching the 2019 leve

145、ls.Moreover,tourism receipts in 2022 reached 17.3B,rising by 67 percent compared to 2021,and falling only 2 percent short of 2019 levels25.The newly-built Astir Marina Vouliagmeni,which has already attracted leading houses LVMH and Kering,serves as further confirmation and enhancement of Greeces pos

146、ition among the top international luxury destinations26.Similarly,the statement by the CEO of Bvlgari,expressing that Athens already meets certain requirements to be considered one of the next locations for the brands hotel chain,reinforces the citys allure in the luxury segment27.The influx of visi

147、tors from the USA and China strengthened Chanels boutique sales in Athens,especially those of apparel and footwear28.International and local fine jewellery and watch brands,such as Rolex and Lalaounis,have also experienced improved sales in the post-pandemic years.This surgeThe impact of tourism on

148、the Greek luxury market28 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goo

149、dsin sales can be attributed not only to the lifting of global travel restrictions,but also to the heightened tourist traffic in general28,29.Mykonos attracts affluent visitors from around the globe in the summer season.In 2022 and 2023,several high-end luxury brands,such as Fendi,Valentino and Loew

150、e,that hadnt owned a dedicated boutique,launched seasonal pop-up stores in the island.Furthermore,during the last five years,elite luxury brands with established presence in Greece,specifically in Mykonos,have strengthened their physical presence and image on the island by opening additional pop-up

151、boutiques and launching their so-called“events”18.Indicatively,in 2023,Chanel opened a second smaller pop-up boutique in Nammos Village to host its first Fragrance and Beauty event,while on parallel operated its seasonal 140-square-metre boutique at the same place18.Additionally,Louis Vuitton,alread

152、y located in both downtown Mykonos and Nammos Village,expanded its presence by opening a pop-up boutique at Zuma restaurant,a fine dining destination30.Note:KPMG in Greece research29 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of in

153、dependent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsThe international effort of ultra-luxury personal goods brands to approach more customers has led them to follow the global expansion of high

154、-end luxury hotels.As a result,there is a worldwide trend for new store openings within upscale hotels and resorts19.Greece is not an exception.Moschinos first pop-up boutique opening in Cavo Tagoo Mykonos31and Kitons arrival in Sani Resort in 202332are among the most recent examples.Established sto

155、res of luxury brands can already be found in several leisure and resort destinations across Greece,including Four Seasons Hotel in Athens,Costa Navarino resort in Messinia,Sani Resort in Halkidiki and Cavo Tagoo in Mykonos.Given the development of local luxury markets in Greek islands and within bea

156、ch resorts,the small yet significant and growing sub-segment of luxury resort-wear,beachwear and swimwear,is well-represented in Greece.With their focus on this sub-segment,international brands,such as Poupette Saint Barth and Vilebrequin,as well as local multi-brand retailers,such as Salt Water,hav

157、e opened their stores in prominent Greek islands and luxury beach resorts.Moreover,luxury brands include relevant collections in their seasonal pop-up boutiques,customising in many occasions their collections to the destination.For instance,Moschinos boutique in Mykonos,a recent addition to the Gree

158、k market,featured a limited-edition summer collection inspired by the islands colours and unique characteristics31.High-end personal luxury goods in the expanding luxury resort market Note:KPMG in Greece researchUnderstanding and attracting todays luxury consumer31 2024 KPMG Advisors Single Member S

159、.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsThe evolution of the luxury consumerIn the past,luxury was

160、 a rare taste reserved for an elite,a trend which over the years has changed and now is enjoyed by a wider audience.The concept of the luxury consumer has evolved significantly over the years,reflecting the changes in society,culture and consumer behaviour.Gone are the days when the customer base of

161、 luxury goods products primarily comprised of older and wealthier consumers,or when such products were far more exclusive.Today,the market is booming and the consumer profile has changed,including younger generations who are more digitally savvy,environmentally and socially conscious,and diverse tha

162、n their predecessors33.The main age groups of consumers that make up the luxury market today are younger generations,with representatives mainly from the Millennials and Gen Z.Luxury consumption signifies a type of behaviour characterised by the acquisition of high-end,exclusive,prestigious goods an

163、d services that are perceived to be of superior quality and value.For many luxury consumers,purchasing these goods signifies something beyond mere ownership it holds deeper meaning.Highly educatedAre people with advanced education and intellectual knowledge to appreciate the craftmanship of products

164、.Brand consciousnessDisplay a strong brand consciousness and tend to exhibit loyalty towards renowned brands celebrated for their prestige,heritage,and reputation.High income and affluencePosses high disposable income and are less price sensitive.High importance on qualitySeek high quality products

165、that cover their needs,are valuable,last and made of exceptional materials.Feel special and uniqueSeek purchases to reflect their uniqueness and personality.Key characteristics of luxury goods consumersDefining the luxury consumer32 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a

166、 member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsHow do customers perceive luxuryFinancial valueFunctional valueSocial valueIndividual value

167、High priceHigh usabilityHigh qualityUniquenessPrestigeConspicuousnessSelf-identityMaterialismHedonismLuxury goods,including personal luxury items,are defined by the perceived intrinsic value they possess.This value can be distinguished into four dimensions:financial,functional,social and individual.

168、Despite the fact that a luxury product is often associated with multiple value dimensions,a customer may be inclined to make a purchase if they believe that the product strongly aligns with a specific value characteristic they are seeking.The financial value encompasses theperception of high price o

169、f luxury goods,while the functional value includes the high usability,high quality and uniqueness.The individual value encapsulates the notions of self-identity,materialism and hedonism,and finally,the social value incorporates perceptions of prestige and conspicuousness.While these value dimensions

170、 function separately,they interconnect and influence personal perceptions and behaviours related to luxury34.33 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a pri

171、vate English company limited by guarantee.All rights reserved.The market of luxury goodsAttracting and retaining consumers is essential for luxury brands.They focus on understanding the desires and motivations of their customers,creating an alluring brand narrative and delivering on the promise of l

172、uxury.In order to thrive,brands adopt specific strategies which include:Experiential retailExperiential retail is a way of product acquisition associated with an experience of a memorable journey.Experiential retail has emerged as a transformative trend in the luxury goods industry,reshaping the way

173、 high-end products are showcased and sold.It creates brand connections,while providing an opportunity for consumers to fully appreciate the craftsmanship,heritage,and story behind each luxury item.In an era dominated by online shopping,experiential retail serves as a strategic differentiator,reinfor

174、cing the notion that luxury is not only about owning a product,but also indulging in a rich and memorable journey.PersonalisationCustomers seek more individualised and customised solutions,prompting companies to tailor their offerings to match the unique tastes and desires of each customer.This tren

175、d fosters customer loyalty and enhances the perceived value of luxury products.Brand storytelling Companies create content about their brands and their activities,in order to capture younger generations preferences.Luxury brands recognise the power of storytelling to connect with consumers on a deep

176、er emotional level,thereby fostering increased customer retention.Social consciousnessBrands understand that in todays world,expressing social consciousness is crucial for attracting and retaining customers.To align with this awareness,brands can take action by implementing strategies and taking mea

177、sures to enhance sustainable operation of their businesses and promote more sustainable offerings.Howdo luxury brands attract consumers?2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG Int

178、ernational Limited,a private English company limited by guarantee.All rights reserved.33The market of luxury goods34 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,

179、a private English company limited by guarantee.All rights reserved.The market of luxury goodsLuxury consumer segmentationPreference for international brandsPrioritising social status Motivated by trends and a sense of belongingFocused on improving own life quality,influenced by personal beliefs Purp

180、ose and values-driven consumersLuxury newcomersStatus reflectorsCommunity approval seekersLuxury investors“New luxury”pioneersValue brand name and originValue conspicuous luxuryValue quality of lifeValue sophisticationValue the“greater good”Low understanding of brand nuanceBuy luxury products to dis

181、play statusShare experiences on social mediaAppreciate brand heritage,fabric and manufacturingChoose companies that are sustainable and inclusiveMost prevalent among 45+years oldMost prevalent among 25 34 years oldMost prevalent among 25 34 years oldMost prevalent among 45+years oldMost prevalent am

182、ong 18 24 years oldCharacteristics,drivers and demographics of luxury consumer clusters35Understanding the global luxury consumerWhen analysing consumer preferences and behaviours in the global luxury market,it becomes clear that large groups of consumers share common characteristics,regardless of t

183、heir geographical location.Consumers undergo a dynamic evolution in their purchasing mindsets,advancing through a series of recognisable clusters.MotivationProfileValuesReasoningAgeGoing globalLook at meFitting inQuality first Better good35 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anony

184、me and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsLook at me:Prioritisingsocial status As some consumers advance economically,their i

185、nclination to purchase luxury items increases,often influenced by digital marketing,as a means to signify their wealth and status within their social circles.Fitting in:Motivated by trends and a sense of belongingThis consumer group equates quality of life with higher-end purchases to reflect person

186、al growth and status.These acquisitions serve to reinforce social identity and belonging,often showcased on social media platforms to affirm their elevated status.Quality first:Focused on improving own life quality,influenced by personal beliefs Educated consumers prioritise craftsmanship and unique

187、ness in luxury items,making deliberate choices based on personal identity,independent research,and peer recommendations,rather than brand prestige.Better good:Purpose and values-driven consumersConsumers who are environmentally and socially conscious increasingly demand luxury products that align wi

188、th their values,favouring sustainable,inclusive brands with ethical credentials,a trend amplified by the Covid-19 pandemic.Going global:Preference for international brandsConsumers in this group,due to their limited familiarity with the core values embodied by each brand,are influenced by their soci

189、al connections and peers.As a result,they tend to view owning products from international brands as a way to elevate their social standing.Luxury goods consumers worldwide can be categorised into 5 dominant groups with distinct characteristics based on what motivates them,their profiles,what they va

190、lue most in luxury items,the reasoning behind their purchases and their age groups35.Exploring the luxury consumer profile36 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International

191、Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsGeneration Z refers to the demographic cohort born approximately between 1997 and 2012.This generation is characterised by a profound connectivity to the digital world and tech-savviness,having grown

192、 up with the internet and social media as integral parts of their lives.They are known for their diversity,and progressive values36.They value authenticity,creativity,and individual expression,often seeking uniqueness in their consumer choices37.As this generation enters adulthood and strengthens it

193、s purchasing power,its influence is progressively shaping various industries,ranging from technology to fashion38.Gen Z redefines luxury,placing athleisure at the forefront of evolving brand preferencesThe luxury market is currently transforming to cater for Generation Z,whose values demand a shift

194、from traditional luxury concepts towards inclusivity,sustainability,and innovation.This shift is evident in strategic partnerships between luxury and high-street brands,aligning with cultural trends and the generations ethical expectations.Luxury brands enter into these collaborations to ensure they

195、 enhance,rather than weaken,their brand identity and heritage,balancing the allure of luxury with the preferences of an emerging consumer base39.Tiffany&Co x NikeAdidas x GucciDior x BirkenstockMugler x HMBurberry x SupremeNotable collaborations of luxury goods brands37 2024 KPMG Advisors Single Mem

196、ber S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsSocial media has emerged as pivotal in shaping the pe

197、rception of luxury brands among the younger,digitally-native generations.The recent shift in luxury brands marketing recognises that Gen Z consumers place great value on authenticity and social proof derived from peer recommendations36.Studies underscore the significant influence of social media mar

198、keting on the online purchasing intentions of consumers,where a brands engagement on social platforms can make or break its appeal40.Luxury brands that adeptly navigate these digital channels,crafting campaigns that resonate with the values and social consciousness of this audience,find themselves w

199、ell-positioned to convert online buzz into tangible sales.The case of Bottega Veneta quitting social mediaIn an unconventional move in 2021,Bottega Veneta chose to withdraw from social media,opting to engage with its audience through alternative channels,such as a dedicated app and traditional press

200、.However,recognising the unique dynamics of the Chinese market,the fashion house has recently made a return to digital platforms by resuming activity on Sina Weibo41.Despite not resurfacing on western social platforms such as Instagram or X,Bottega Venetas teasers for its Fall/Winter 2023 show have

201、attracted significant attention on Weibo.This strategic and market-specific re-engagement with social media reflects the brands efforts to maintain its allure and reconnect with the digitally engaged luxury consumer.Social media and influencer marketing38 2024 KPMG Advisors Single Member S.A.,a Gree

202、k Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsIn the context of consumer behaviour,the process of purchasing luxur

203、y goods differs significantly from that of routine purchases.In contrast to the practicality of everyday shopping,shopping for luxury items offers a unique experience.It involves emotional bonding,the cultivation of a sense of high status and an aspiration for something special.The customer journey

204、for luxury goods is an immersive experience,characterised by exclusivity,personalisation and exceptional customer service.AwarenessConsumers of luxury goods frequently come across products through influencers and content creators on social media or by noticing strangers with items they might find ap

205、pealing.Others may seek inspiration by observing the fashion choices of celebrities at events or in their daily lives.Window shopping and the chance of spotting an item they fancy in store displays,also contribute to this exploration.Additionally,keeping up with the latest collections from designers

206、 and discovering items showcased on the runway are a prevalent practices among those with an interest in luxury clothing.In Greece,luxury brands consistently update their social media content to increase customer awareness,providing customers with the latest collections available in-store.Furthermor

207、e,several brands host events to introduce and familiarise consumers with new products.During the summer of 2023,Dior,in collaboration with Vogue Greece,organisedan exclusive sunset event in Athens,Greece,unveiling the new fragrance,Dioriviera,to their esteemed guests42.In another example of awarenes

208、s creation,in 2021,Dior unveiled its Cruise 2022 collection at the historic Panathenaic Stadium in Athens,underscoring a strong commitment to the Greek market43.Louis Vuitton is yet another brand that has taken actions to increase awareness among Greek consumers.Notably,in June 2023,the brand unveil

209、ed its latest High Jewellery Collection,“Deep Time”,by hosting an event at the Odeon of Herodes Atticus,accompanied by a mesmerising choreographic performance44.In addition to individual brand initiatives,customer awareness is also generated from major events,such as the Athens Xclusive Designers We

210、ek(AXDW),which stands as the premier international fashion event in Greece,showcasing the latest trends and innovations in the fashion industry.Held biannually at the iconic Zappeion Hall,this esteemed platform spotlights avant-garde creations fromGreek designers alongside leading international fash

211、ion figures and renowned fashion houses45.1The luxury goods customer journey 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by gua

212、rantee.All rights reserved.38The market of luxury goods39 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights r

213、eserved.The market of luxury goods3ConsiderationDuring the consideration phase of luxury shopping,consumers engage in extensive research,exploring department stores,luxury brands websites and other platforms to gather information about the products,and read relevant reviews.This phase,often the long

214、est in the luxury goods journey,involves careful consideration,comparison and a desire to explore all possible options thoroughly.The consideration phase holds immense significance for brands,as it is a pivotal opportunity to persuade consumers towards conversion.To succeed in this phase,brands shou

215、ld prioritise impeccable customer service across all channels,fostering an omnichannel experience.Providing consumers with the chance to engage with knowledgeable representatives who can address queries and concerns,enhances the sense of exclusivity and exceptional treatment,crucial elements in infl

216、uencing purchasing decisions and securing customer loyalty.A prime illustration of an effective omnichannel experience is exemplified by Gucci,which,during the Covid-19 pandemic,introduced a service allowing customers to engage in live showings online or to schedule virtual personalisedappointments

217、with dedicated client advisors.This service facilitates in-depth product exploration and expert guidance during the consideration phase,being available for customers to this day46.PurchaseThe purchase phase signifies the apex of the customer journey,particularly when purposefully visiting a store fo

218、r a specific product.It serves as the critical factor that largely distinguishes the customer journey between luxury and non-luxury brands,emphasising the significance of the in-store experience.This is the phase where customers experience immense joy and feel valued by the sales representatives the

219、y meet.Moreover,brands provide their customers with the opportunity to add a unique and personalised touch to their products,offering a spectrum of methods and choices for customisations.For instance,customers of Louis Vuitton can choose to add personal initials,a signature,an engraved message,class

220、ic stripes or travel sticker-style designs to a selection of goods47.When it comes to online purchasers,the at-home unboxing holds equal significance as the in-store visit in shaping the overall perception of the brand.Brands need to carefully avoid mishaps with delivery services,while offering a me

221、ticulous packaging design to ensure a consistently exceptional customer journey,whether in-store or online.240 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a priv

222、ate English company limited by guarantee.All rights reserved.The market of luxury goodsPost-purchaseIn the world of luxury goods,the post-purchase phase is a pivotal stage that extends far beyond the mere acquisition of a product.During this phase,customers experience satisfaction from both the qual

223、ity and craftsmanship of the product,as well as the pride of being part of a community that appreciates and understands the intrinsic value of these items.The recognition and status associated with luxury products contribute to a feeling of exclusivity and prestige,fostering a sense of fulfilment.Po

224、st-purchase phase becomes a catalyst for brand advocacy through word-of-mouth(WoM)and its digital counterpart,electronic word-of-mouth(eWoM).The exclusivity and prestige linked to luxury items often prompt customers to share their experiences within their communities,both offline and online.Social m

225、edia platforms become virtual showcases for these cherished possessions,allowing customers to upload content,share anecdotes and showcase their personal style.This amplification of the post-purchase experience contributes to the brands online visibility and also serves as a testament to the genuine

226、enthusiasm and satisfaction of the customer.The cultivation of brand loyalty and promotion is an integral part of this phase.Brands understand the profound impact of addressing customer concerns and providing exceptional after-sales service in creating a lasting connection with their customers.Initi

227、atives like the“Chanel et moi”program,offering a 5-year warranty and restoration services,not only address concerns about the long-term durability of luxury items,but also enhance the status of the brand in the eyes of its patrons48.Such programs emphasise that luxury is not just a transaction,but a

228、 commitment to a lifestyle of enduring quality and sophistication.Oscar de la Rentas“Encore”program is another example of the lasting relationship between the brand and its customers.Operating through various channels,the house accepts high-quality pre-owned items,that are meticulously restored and

229、are then available for purchase49.This innovative approach,transforms the post-purchase phase into a dynamic exchange,fostering a sense of exclusivity and shared values within the brands community.The customer journey for luxury goods is characterised by emotional engagement and high aspirations.Sta

230、rting from the initial stages of awareness and thoughtful consideration,all the way to the tangible act of purchase,each phase contributes to a narrative of sophistication.The post-purchase stage,marked by exceptional services and community involvement,further fortifies the customers bond with the b

231、rand,fostering a continuous sense of exclusivity and recognition.441 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.A

232、ll rights reserved.The market of luxury goodsThe D2C model in luxury goodsThe direct-to-consumer(D2C)model has seen significant growth in recent years,driven in part by the remarkable growth of e-commerce.This trend reflects a broader digital transformation that has reshaped consumer habits50.At the

233、 same time,the D2C model has also started making its way into the physical realm,with brands owning retail stores without intermediaries or department stores.However,what might the D2C model look like for luxury brands,and is it worth pursuing?Luxury brands are increasingly embracing the D2C approac

234、h,recognising its potential tocreate a more personalised and immersive experience for consumers.Nevertheless,the adoption of the D2C model by luxury brands presents unique challenges and opportunities.Traditionally,luxury brands have relied on a network of third-party retailers,such as department st

235、ores and specialty boutiques,to reach consumers.This approach has enabled brands to expand their reach and build brand awareness,while minimising the upfront investment needed to establish their own retail infrastructure.42 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member f

236、irm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsThe rise of e-commerce and the changing preferences of luxury consumers have challenged the traditio

237、nal retail model.Younger generations,particularly Gen Z,are more inclined to make online purchases and seek more personalised and immersive shopping experiences51.This shift has prompted luxury brands to re-evaluate their distribution strategies and explore D2C options.D2C allows luxury brands to di

238、rectly collect valuable customer data,enabling them to tailor marketing campaigns,product offerings,and customer service experiences to specific customer preferences.Technologies,such as artificial intelligence(AI),augmented reality(AR),and virtual reality(VR)can further enhance the customer experie

239、nce,creating virtual showrooms,personalised product recommendations and immersive brand storytelling.While the digital realm offers significant opportunities,physical stores continue to play a crucial role in the luxury market.Luxury brands can leverage technology to integrate physical and digital c

240、hannels seamlessly,providing a cohesive omnichannel experience that transcends the boundaries of online and offline interactions.However,the adoption of D2C by luxury brands comes with its challenges.Profitability,narrowing assortments,and escalating digital marketing costs often become hurdles.Addi

241、tionally,maintaining exclusivity and ensuring consistent brand messaging across multiple channels can be complex.Luxury brands that have successfully embraced the D2C model have implemented innovative strategies to address these challenges.LVMH and Prada,for instance,are leveraging blockchain techno

242、logy to enhance productauthenticity and traceability,fostering trust andloyalty among discerning consumers.Other brands are expected to follow suit52.Chanel has also demonstrated the strategic value of the D2C approach.The brands direct-to-consumer sales have surged during the pandemic,highlighting

243、the importance of personalisedinteractions and brand control in the luxury market.Chanels D2C approach,which accounts for around one-third of its total net sales,underscores the growing demand for digitally enhanced experiences and the ability to connect with consumers on a deeper level53.The future

244、 of D2C for luxury brands lies in a diversified channel strategy that balances the power of technology with the enduring appeal of physical retail.As e-commerce stabilises and brick-and-mortar chains adapt,luxury brands must seamlessly integrate digital elements into their physical stores,creating i

245、mmersive omnichannel experiences that cater for the evolving expectations of luxury consumers.he D2C model presents a compelling opportunity for luxury brands to strongly connect with consumers,personalise experiences and foster brand loyalty.By leveraging technology,embracing omnichannel strategies

246、,and adapting to evolving consumer preferences,luxury brands can harness the power of D2C to thrive in the digital era,while maintaining the exclusivity and prestige that define their brands.Special focus on key trendsLuxury brands embracing sustainability45 2024 KPMG Advisors Single Member S.A.,a G

247、reek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsLuxury brands have always reflected what society considers aspira

248、tional.They view sustainability as an opportunity and put social responsibility at the core of their business.Now,ESG strategy and business strategy are intertwined.Companies try to create products that are more sustainable and friendly to the environment.Sustainable products share some common chara

249、cteristics with luxury goods,which include:Exceptional materialsRaw materials used for product design,production and packaging are sustainable,innovative,organic and alternative to the conventional ones.Products are transformed into high-end,one-of-a-kind pieces,showcasing the beauty found in the un

250、expected.Extraordinary creativity and designSustainable products are not just ordinary,theyre meticulously crafted to be both environmentally responsible and aesthetically appealing.This creative approach is vital,because it leads to unique,eye-catching,and desirable products that resonate with cons

251、umers.High qualityProducts are designed and manufactured with a focus on quality,meeting the standards of durability,performance and longevity.They follow the principle of sustainability by offering consumers lasting value,while reducing the overall environmental impact associated with disposable or

252、 lower-quality goods.Durable and timelessProducts stand the test of time,both in terms of quality and enduring style.They are built to last,resisting wear and tear,thereby reducing the need for frequent replacements.Consumer perception of sustainability in luxury brands According to a global consume

253、r survey54,only a small portion of global luxury brands are perceived to prioritise sustainability in their practices.Thirty percent of consumers consider Chanel as the leader of sustainable luxury fashion,while Chlo is perceived to lag behind other brands,being recognised as a leader only by 12 per

254、cent.In terms of perception of a sustainable brand,consumers believe that Celine is the most sustainable(23 percent),while Herms and Louis Vuitton score the lowest(17 percent)among them.ChloRalph LaurenCelineBottega VenetaPradaGucciBurberryLouis VuittonDiorHermsChanel22.0%21.0%23.0%20.0%19.0%18.0%22

255、.0%17.0%21.0%17.0%18.0%12.0%14.0%16.0%17.0%19.0%20.0%20.0%22.0%22.0%26.0%30.0%Is a leader in sustainabilityLuxury brands consumers view as sustainable worldwide(%),July 2022Is a sustainable brandSustainability in luxury goods46 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a memb

256、er firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goods 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG glo

257、bal organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.46The market of luxury goodsThe main challenges the luxury goods segment faces regarding sustainability issues include:CO2and chemical releases i

258、nto the environment Luxury fashion products,crafted from high-quality materials,do not necessarily equate to sustainability.Luxury products,which often prioritise quality and craftsmanship,may involve energy-intensive production methods and the use of resource-intensive materials.For example,the pro

259、duction of leather goods requires cattle ranching,contributing to increased emissions,raising awareness about animal welfare.Supply chain complexity Luxury goods brands often have complex global supply chains,making it challenging to trace the origin and ensure the sustainability of raw materials.In

260、 addition,brands need to comply with different legal frameworks and regulations for sustainability imposed in the different regions,from which their raw materials are sourced.Limited consumer awarenessLuxury goods consumers may not always prioritise sustainability,posing a challenge for brands attem

261、pts to implement eco-friendly practices.In addition,some luxury consumers may view sustainability as inconsistent with the idea of excess and opulence,often associated with luxury goods.For this reason,companies should adopt a sustainability strategy,in order to minimise the risks and impact associa

262、ted with this group of customers,educating them about sustainable ways of using their products.Sustainability challenges for luxury goods brandsEnvironmental challenges have prompted both industry and society to increase awareness on sustainability issues.Sustainable development has evolved from a c

263、hoice to a necessity in preserving our planet,ensuring a habitable future for generations to come.In that regard,governments take several measures to tackle the issue and force companies to comply.47 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global o

264、rganization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsLuxury goods brands have taken action to actively support sustainability,adopting several practices to limit and reduce nega

265、tive impacts.Some of them include:Sustainable sourcingIn recent years,luxury goods brands have made concerted efforts to ensure their products and operations are more sustainable.They prioritise the use of eco-friendly and ethically harvested materials,such as organic cotton,responsibly-sourced exot

266、ic leathers,and conflict-free gemstones.Some houses have stopped the use of real fur in their creations,while many luxury brands cooperate with innovative producers of new materials to create bio-textile alternatives.However,the shift to sustainable sourcing can have repercussions to local economies

267、.For example,in Greece,the change in the consumption model of fur has negatively impacted the companies of mink breeding and their respective communities.Big brands have stopped using mink furs in the manufacturing of their products.Responsible supply chain Companies are investigating the conditions

268、 under which products are manufactured and are exploring ways to reduce the environmental impact of their supply chain.They invest in transparency and traceability to provide consumers with visibility.An example is the digital passport,a digital tool that verifies the origin of luxury goods.This enc

269、ompasses details about the product,ranging from material composition and recyclability,to production processes and transportation routes.In addition,some luxury brands have started indicating the country of origin for some products produced in developing countries.Herms and Balmain include labels,su

270、ch as“made in India”,to indicate the country of origin,acknowledging and recognising the highly-skilled craftsmen in Mumbai and their suppliers in other parts of the world for their skills and expertise in product development55.Luxury goods brands initiatives towards a sustainable future 2024 KPMG A

271、dvisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.47The market of luxury goods48 2024 KPMG Advisors Single Memb

272、er S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsReduction of energy consumption and greenhouse gas emi

273、ssionsSeveral luxury brands have adopted innovative practices to reduce energy consumption and greenhouse gas emissions along their entire value chain from manufacturing to sales.For instance,many luxury fashion houses invest in energy-efficient production processes and facilities,utilising renewabl

274、e energy sources,such as solar power and wind turbines.In addition,they optimisetransportation logistics to reduce their carbon footprint using hybrid or electric vehicles.Circular economyLuxury brands promote circular economy aiming to minimise waste and maximise resource efficiency.Products are cr

275、eated to be durable and designed to last,thus extending their lifespan and reducing the need for new production.As a result,resources are conserved and waste is minimised.Other practices,such as refurbishment,resale and upcycling,are also gaining popularity among luxury products.Fair and equal labou

276、r standardsThe industry is dedicated to upholding human rights along its entire value chain and to actively promote equality,diversity,and inclusion in collaboration with its suppliers.Moreover,it has taken a leading role in advocating for diversity and inclusivity within consumer culture.As such,a

277、frequent manifestation of luxury brands support on DEI principles often takes the form of a mindset that embraces individual gender expression.2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with K

278、PMG International Limited,a private English company limited by guarantee.All rights reserved.48The market of luxury goods49 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International L

279、imited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsSustainable practices of Greek luxury retailingIn Greece,the majority of personal luxury goods retail stores are making efforts to improve their environmental policy,demonstrating a growing awareness

280、and commitment to address environmental concerns and adopt sustainable practices.Retailers tend to comply with the existing legislation and implement practices for energy efficiency,waste management,recycling and education of employees on sustainability issues.Key initiatives include the continuous

281、monitoring of electricity consumption,the use of eco-friendly packaging materials,the replacement of incandescent lamps with new LED lamps,as well as the recycling of materials and consumables.While retail stores inherently have lower energy consumption and emissions compared to production facilitie

282、s,brands try to improve their environmental footprint in stores,contributing to sustainability in the best way possible.In addition,retailers,through established procedures for ethical working conditions,prioritise the rights of their employees in accordance with International Human Rights Principle

283、s.These principles include equal treatment,diversity,equal opportunities for all,and the prevention of child or forced labour.Moreover,brands take measures to comply with health and safety standards,as well as launch related programs to educate their employees accordingly,ensuring a safer work envir

284、onment.Sources:Companies Financial Statements;KPMG in Greece analysis50 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarante

285、e.All rights reserved.The market of luxury goodsAs defined by the European Parliament,circular economy is a model of production and consumption,which involves sharing,leasing,reusing,repairing,refurbishing and recycling existing materials and products as long as possible,extending the life cycle of

286、products56.Luxury brands are increasingly adopting circular economy practices in their commercial models,a strategic decision that can benefit them in multiple ways:Cost reductionEmbracing circular economy models enables brands achieve cost reduction through streamlined operational processes,optimis

287、ing resource utilisation,leading to a reduction in material and waste costs.Additional savings can also be achieved by adopting upcycling practices,which transform discarded materials into valuable products.Sustainability and environmental impact reduction The implementation of a circular economy mo

288、del can enhance brands initiatives for sustainability and reduce their environmental impact.Particularly,companies can minimisetheir environmental footprint by promoting the reuse,refurbishment,and recycling of their products.This practice not only reduces energy consumption and greenhouse gas emiss

289、ions,but also limits the extraction of raw materials.Brand image Consumers today are more environmentally conscious and prefer brands that adopt sustainable practices.Adhering to circular economy principles strengthens a brands image and reputation.Competitive advantage Circular economy initiatives

290、differentiate companies from their competitors and attract a new segment of environmentally conscious consumers.By doing so,brands expand their customer base,securing future market share.A business model based on circularity can also bring an elevated market potential,including new materials,eco-fri

291、endly products and sustainable income flows.Regulatory compliance Governments worldwide impose stricter environmental regulations,making it imperative for companies to ensure compliance with their operations.Companies that adopt circular economy practices though,find it easier to meet environmental

292、regulations,thereby avoiding potential fines and penalties.FinancingMany financing institutions and investors are highly interested in supporting sustainable businesses.Companies that adopt circular economy practices may find it easier to secure financial support for their activities.“Green”financin

293、g options for example,such as“green”bonds and loans,offer favourable terms and lower interest rates.Circular economy can benefit luxury brands in achieving better business outcomes51 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of in

294、dependent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsSustainability case studies of luxury brandsThe world of luxury goods embraces sustainability as a core value,not only setting new standards

295、for quality and craftsmanship,but also pioneering innovative approaches to minimise their environmental footprint.Indicative examples of such initiatives from some major players include:HermsHerms has committed to contributing to the reduction of global warming,aligning with the goals set by the Par

296、is Agreement.In this direction,Herms has invested in Mycoworcs,an American startup that produces alternative materials,replacing leather with mycelium a material made from mushrooms.LVMHLVMH has established a new bioclimatic factory in the French town of Vendme as part of the companys effort to redu

297、ce its environmental footprint throughout its supply chain.Due to the construction of the new building,both the overall energy consumption and the greenhouse gas emissions have been reduced to half.Gucci and KeringGucci and its parent company Kering have launched the Circular Hub,an open innovation

298、platform for the design and manufacturing of circular products and for researching new solutions.The main goal of the initiative is to positively impact the luxury fashion industry by redifining the entire value chain,from raw materials and design,through to production optimisation and logistics.Car

299、tierCartier has introduced Watch&Jewellery Initiative 2030 to create an entirely sustainable watch and jewellery segment by building climate resilience,preserving resources and fostering inclusiveness.Sources:Companies website;KPMG in Greece analysisThe growing significance of the pre-owned market o

300、f luxury goods53 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsThe pre

301、-owned market for luxury goods encompasses the buying and selling of previously owned or used goods,including designer fashion items,accessories,watches,jewellery,and luxury handbags.Participants in this market seek to acquire,sell,or exchange items with a history of previous ownership.It is estimat

302、ed57that the global second-hand luxury market will reach almost 73B by 2031,having achieved a CAGR of 11.5 percent during the forecasted period.Due to the size of the market,luxury firms consider how consumers use their products throughout their life cycle and try to find ways to benefit from this t

303、rend.The drivers fueling the growth of pre-owned luxury market are:AffordabilityLuxury resale gives shoppers the ability to acquire luxury items at reduced prices.Buyers who cannot afford new luxury products,can gain access in a unique range of goods,while sellers have the opportunity to earn extra

304、income.However,some pre-owned goods are more expensive than the new ones,such as luxury handbags and watches.This is often observed in items sold above the original retail price,particularly due to their high demand and long waiting lists in traditional retail channels.SustainabilityConsumers have b

305、ecome more socially and environmentally aware and may opt for more sustainable consumption patterns.Purchasing a pre-owned luxury item can be a more sustainable option compared to buying a new one,as it extends the products lifecycle and reduces waste.CollectabilitySome luxury brands are known for t

306、heir timeless and durable products that retain their value over time.Shoppers can take advantage of luxury resales,acquiring unique limited-edition products,whose first launch they missed.Digital platformsOnline shopping platforms that offer a wide range of products,authentication services,and buyer

307、 protections,are transforming the pre-owned market.They enhance user experience and increase consumer confidence in online purchases of luxury items.Changing consumer attitudesConsumer attitudes change over time.Many people,particularly younger generations,are less interested in owning products,focu

308、sing more on experiences.Renting or buying pre-owned luxury items aligns with their mindset.Drivers of the pre-owned market 54 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG Internationa

309、l Limited,a private English company limited by guarantee.All rights reserved.The market of luxury goodsPitfalls of the pre-owned market Luxury goods brands have started to invest in the resale market,reshaping the traditional landscape.However,there are some challenges companies should strive to avo

310、id:Brand image and authenticityCompanies investing in the resale market showcase their commitment to meet the emerging customer expectations and control their brands image.However,they need to foster and maintain customers perception and emotions about the authenticity and uniqueness of the brand,ma

311、king the distinctions between the first and pre-owned market as clear as possible.Cannibalisation of salesThe rising sales in the pre-owned market can potentially damage the sales of first-hand products.To prevent sales cannibalisation,companies should adopt a multifaceted strategy involving distinc

312、t positioning and branding of products.Additionally,establishing separate distribution channels is equally crucial in ensuring that pre-owned items complement rather than detract customers from the primary products.Counterfeited goodsCounterfeit products can be promoted in the resale market,harming

313、a brands reputation.To mitigate this risk,companies should invest in solutions that offer verification,such as the digital passport.This digital tool,often based on blockchain technology,verifies the origin of goods,providing useful insights about the product.Together with the general growth of sens

314、itivity in sustainability issues,luxury companies are increasingly adopting resale as a strategy to limit the negative environmental impact.Furthermore,they have begun to reduce overproduction and overconsumption of products,promoting circularity.Participation in the pre-owned market can take variou

315、s forms,with three main engagement models.The selection of the most appropriate model is based on multiple factors such as the brands status,core values,historical heritage and benefits that each brand hopes to derive.Luxury goods companies investment opportunities and challenges on pre-owned market

316、PartnershipLuxury brands are partnering with existing resale platforms,offering unsold merchandise.Burberry has teamed up with the resale website TheRealReal,selling its products and providing perks to customers for personalised shopping experiences.Investment in platformsOther brands have chosen to

317、 invest in or acquire second-hand platforms in order to drive change toward a more sustainable future.For example,Kering financed Vestiaire Collective,a leading global platform for desirable second-hand luxury products,allowing Kering to have control over and approve the items being sold.In-house de

318、velopmentIn-house development of resale services allow companies greater control over prices,availability,authentication and brand positioning.Thus,brands expand their offerings and build trust in secondhand products.Oscar De La Renta operates its own site,selling clothes authenticated by its archiv

319、ists and reconditioned by hand in the atelier.Engagement modelsSources:Companies website;KPMG in Greece analysis55 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a

320、private English company limited by guarantee.All rights reserved.The market of luxury goodsThere are several reasons why luxury brands might consider entering the pre-owned market.The main factors include:Benefits for luxury brands entering the pre-owned marketBrand protection and controlLuxury bran

321、ds entering the resale market can ensure the quality of their products,verifying accurate authentication and limiting counterfeit items.Thus,they maintain control over sales and protect their image.SustainabilitySustainability has become an increasingly significant issue for companies,urging them to

322、 embrace more sustainable practices.Engaging in the resale market allows companies to actively demonstrate their willingness to reduce waste and minimise their environmental impact.Customer reachLuxury brands can reach a new customer base in the resale market those who cannot afford their new produc

323、ts.These customers often belong to segments passionate about fashion,presenting an opportunity to cultivate future brand loyalty when they can afford new products.Customer loyaltyOffering customers the opportunity to resell their luxury products through a companys official platform,not only boosts t

324、rust,but also enhances loyalty toward the brand.Brands that provide easy and trusted resale options are more likely to attract investments from customers.Given that a significant portion of secondhand buyers belong to a younger demographic,companies consider the resale option as an opportunity to cu

325、ltivate loyalty within this emerging consumer group.55The market of luxury goods 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited,a private English company limited by

326、 guarantee.All rights reserved56 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.The market of lux

327、ury goods 2024 KPMG Advisors Single Member S.A.,a Greek Societe Anonyme and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.56The market of luxury goodsIs luxury an

328、 investment?Luxury goods are considered investments,fueling the pre-owned marketLuxury goods present a unique opportunity for consumers,blending craftsmanship,exclusivity,and status attributes that contribute to their appreciation in value over time especially for rare or limited-edition items,such

329、as vintage watches,designer handbags,or high-end artwork.In addition,the trend of circularity also helps to reaffirm the idea that luxury items are an investment;they are goods that maintain their quality,tradition,and exclusivity.The value of luxury products is timeless,encouraging consumers to ado

330、pt a buy less,but better approach,as these items can be cherished and retained for a significant period.Luxury watches are perceived as an investment,with investors preferring watches to diversify their portfolios.The luxury watch market is particularly attractive,demonstrating resilience in the lon

331、g-term compared to traditional investments.While most products experience a decrease in price once they exit the store,luxury watches tend to follow a different trend.Resale values for sought-after models of prestigious brands often appreciate over time.During the Covid-19 period,a shortage of luxur

332、y watches was observed in Greece for brands such as Rolex,with customers turning to the second-hand market.Second-hand watches were available at higher prices than new models,while brands were trying to cover shortages from the increased demand,a trend witnessed in other countries across the globe a

333、s well.Recent global data suggests that the prices of pre-owned watches have eventually started to decline due to the increased supply.The Bloomberg Subdial Watch Index,which tracks the prices of the 50 most traded watches,was down by 1.7 percent in the beginning of December 2023 compared to the previous month and down by 14.9 percent compared to the last 24 months58.In addition,global challenges