The Luxury Goods Market | Trend Analysis 2023
Luxury’s New Standard
Going into the new year of 2023, the luxury market’s new paradigm is all about self-expression, an investment asset, vintage and new, and elevated essentialism. In order to stay at the forefront of the luxury goods market, it is imperative to understand the nature of these high-net-worth consumers and which trends are changing the ways these consumers purchase their items. This trend analysis report aims to highlight predictions for the luxury market in 2023; providing insights into how companies can stay at the forefront of their industry.
LUXURY THEMES
Themes & Takeaways
The most important information to takeaway from this analysis would be the three themes highlighted below. In addition, it is important for companies to remember that competition between mono-brand and multi-brand retailers in the luxury good market is further catalysed due to increased online shopping.
LUXURY THEMES
Personal Luxury Goods Market
- Online Sales Growth. As shown in the graph, in 2022 online purchases for personal luxury goods surpassed mono-brand in-store purchases.
- Online Surpassing Other Luxury Sales Channels. Online shopping is fixing itself a permanent spot in the customer journey. Online sales have increased tremendously in past years with this trending increase showing no signs of slowing down.
LUXURY TRENDS
Luxury Goods Trens in 2023
- The Second-Hand Market. Second-hand luxury is becoming high priority with consumers who value its timeliness, durability, scarcity, and increasing desirability.
- NFTs. Luxury brands are starting to experiment more with virtual ownership and NFT centred luxury projects.
- In-House Resale. Luxury brands are embracing resale and more specifically in-house resale. Consumer trends indicate that sustainability is of higher priority in the consideration of luxury purchases in 2023.
LUXURY TRENDS
The Second-Hand Luxury Market
The second-hand luxury market is where high-end and premium products are resold and purchased. Products in this type of second-hand market include; antique furniture, clothing, apparel, artwork, jewellery, footwear, etc. Since Covid, the online second-hand market has been booming with many consumers interested in purchasing items for long-term investments.
SECOND-HAND MARKET
Value is Increasing
The graph below shows the predicted increase in the second-hand apparel market value from 2021 to 2026. The circular economy for luxury resale is growing tremendously and is only expected to grow more.
- Lifelong Value. Gen Z and 50% of millennials consider the life-long value of a luxury item before purchasing it. These generations equally consider the item’s resale potential. Resale value is a strong purchase motivator in the primary market. Knowing that these luxury goods will have a high resale value, consumers are more inclined to purchase items from the primary market.
LUXURY & NFTS
Luxury Meets Virtual
Industries everywhere are looking for opportunities to stay at the forefront of technology and sustainability. NFTs allow brands to offer a unique and engaging experience for their consumers. Brands pairing their physical goods with NFTs to provide digital verification, are seeing results in providing a trustworthy marketplace for consumers.
With cryptocurrencies and blockchains becoming more globally mainstream, brands investing in NFTs are staying at the forefront of the luxury industry. Digital assets can be collected, traded, and sold. This is encouraging consumers to immerse themselves in an engaging virtual community, rewarding long-term fans to brands.
LUXURY & NFTS
NFT Marketing Tools for High End Brands
- Proof of Attendance Tokens. Proof of attendance tokens or POAPs, prove attendance for virtual events that brands hold in the Me-taverse. These tokens increase the chance to retain consumers using blockchain.
- Soulbound Tokens. Soulbound Tokens are digital tokens that demonstrate the owners social status. Soulbound Tokens can be used to offer exclusive NFTs with unique perks to loyal customers.
LUXURY & NFTS
Brands Currently Embracing NFTs
Many notable brands are excited to explore the potential of NFTs and many of these brands have already put out projects. Brands like Dolce & Gabbana, Burberry, Balmain, and Givenchy are just a few examples of luxury brands that have begun to explore this new exciting medium.
The first fashion house to release an NFT collection, Dolce and Gabbana, collaborated with UNXD and was extremely successful. The collection was titled “Collezione Genesi”. The collection consisted of nine pieces: five NFTs that were accompanied by custom physical pieces and four strictly digital NFTs.
The collection sold out for £4.8 million.
The Gold Glass Dress NFT designed by Dolce & Gabbana.
Photo credit to The New York Times.
TRENDS 2023
In-House Resale – Opportunity or Threat?
There is no faster growing sector in the luxury market than resale. With the growing gravitation of consumers to consider more sustainable options, resale is the perfect opportunity to do this. Mono-brand and Multi-brand retailers have started to consider in-house resale as a way to harness the luxury resale market. In addition, outside resellers are already competing with each other for strategic alliances with luxury brands.
Many brands have been hesitant to initiate in-house resale for their archival products. In order to stay at the forefront of the industry, brands must evolve with consumer trends. Building a new market around in-house resale is an innovative opportunity for brands to stay current with their consumers’ needs. Luxury brands must consider the lifecycle of their products beyond the first sale.
IN-HOUSE RESALE
Brands Embracing In-House Resale
In addition to auctions and private consignments, many luxury brands are already in the process of planning in-house resale business models. Brands such as Zenith, Van Cleef & Arpels, and Cartier, have been pulling pieces from their archives for resale.
In 2021, LVMH-owned watchmaker, Zenith launched its “Icons” collection which was tightly curated and included some of its most iconic vintage pieces, aimed at collectors. The resale collection was highly successful and was well perceived by clients and watch enthusiasts.
Photo credit to Zenith and WatchPro.
Luxury’s Lifelong Value
Resale value is a primary purchase motivator in the luxury market. Consumers understand that they will eventually earn back a significant percentage of the original cost through luxury resale. This drives consumers to the invest in more, new luxury items.
50% of Gen Z and Millennials consider resale value when purchasing luxury goods.
How to Excel in the Future of the Luxury Good Market?
- Think and act like a digital native. Implement new technology to drive online sales. Make sure this can be completed with facility and agility.
- Invest in shaping the structure of emerging markets. Build an early competitive advantage and grip on consumers.
