The global luxury goods market continues to
grow year on year, helped by the rise in more affluent generations, disposable incomes,
and aspirations to achieve a life of luxury as depicted by celebrities and influencers
on social media. According to Statista, the worldwide value of the personal luxury goods
market in 2018 was 305bn USD, which is expected to reach 357bn by 2023. Consumer behavior
is changing rapidly, which has led to a shift in the way global luxury brands are interacting
with their customers. This was highlighted in Deloitte’s “Global Powers of Luxury
Goods Report 2019”, where a strong online presence, social media engagement, and big
data were identified as shaping the transformation of even the more ‘traditional’ luxury
brands such as Burberry, Rolex and Chanel. This move towards a digitally focused strategy
is also supported by research conducted by Globalwebindex. In a 2019 survey, the top
three expectations of regular buyers of luxury goods were as follows: story or narrative
behind the brand, a strong online presence, and immersive advertising. With these expectations
in mind, it is predicted that the total spend on luxury advertisement in the US alone, will
be in the range of 5.49bn USD by the end of 2019. In Bain & Company’s “The Future
of Luxury Report 2019”, the number of online luxury purchases grew to nearly 27 billion
Euros in 2018, accounting for 10% of all luxury sales worldwide. In fact, they predict that
by 2025 online sales will represent 25% of the market’s value, with almost all luxury
purchases being influenced by online interactions between the brand and the consumer. Deloitte
support this in their report, stating: “The future success of luxury brands depends on
how well they will be able to communicate and market their goods to the new generations
of tech-savvy buyers.” But what does this mean on a global scale? Where should luxury
brands be focusing their digital efforts? Bain & Co report how Chinese shoppers continue
to ramp up their luxury spend; predicting that Chinese consumers will account for 46%
of the global luxury market by 2025. Other geographical areas to keep an eye on, according
to Deloitte, are: The Eurozone, particularly France and Spain who outperformed the rest
of Europe, and Russia who will maintain their growth rate in the next 12 months. The USA,
UAE and Japan which experience continued growth in the luxury space. Latin America which will
experience marginal growth in the coming years. And India which is currently experiencing
high growth in the luxury goods market, enabled by technological advancements. So, to summarise,
the global luxury goods market continues to grow. Luxury brands must invest more in a
digital strategy to maximise their reach. Social media and digital storytelling will
shape the way brands interact with their audience – but local language and culture must be
integrated so as not to alienate non-English speakers. This is where Ultimate Languages
can help. Our team is experienced in working with and for luxury brands, so do not hesitate
to get in touch. Thank you.