The opinion of influencers has an impact of 26.9% on millenials' luxury brand shopping habits
29 de August de 2018
29 de August de 2018
EAE Business School has published a new report entitled "Snapshot of the New Luxury Universe" in which there is an analysis of the evolution and current situation of the sector in figures, as well as key players, consumers and what the future holds. The report reveals that the luxury sector experienced a slight downturn in the recession at the start of the century (between 2008 and 2009, when a drop from 170 to 153 billion euros was recorded), but the sector bounced back to recover its growth in just two years. According to the report, "the effects of the recession were felt to a far lesser degree than in the rest of the economy, which goes to show that luxury is a powerful safe haven".
Currently, 80% of the value of the luxury sector is concentrated in Western Europe and Asia, an area which has grown significantly in recent years, driven by the growth of the economy of China, South Korea, Japan, Taiwan, Singapore and India.
The Asia Pacific region is the true driving force behind the luxury market, with growth of 9% compared to the previous year. Europe also recorded positive growth of 3% thanks to the rise in demand for its brands in the East, although it has had to pay the price for outsourcing the production of a large proportion of its luxury brands. In contrast, a negative growth rate of -3% was recorded in North America, as was also the case in Latin America, with a figure of -0.5%.
The country with the greatest number of luxury companies is Italy, with a total of 26 (although the value is 1.307 billion dollars), followed by the United States with 15 (with a greater total value of 3.013 billion dollars) and France with 10 (with the highest total value of 5.061 billion dollars). Switzerland and United Kingdom also have 10 luxury companies each. China has undergone enormous growth in this respect, to reach a total of 7 large brands. Spain has 4 luxury companies, the sales of which have risen by 9.7% to reach a value of 701 million dollars.
The top 100 brands in the world, which each generate sales of over 180 million, have a total turnover well above 200 billion dollars and a growth rate of over 5% per year. Five of the top ten fashion companies are French in origin, reaffirming the country's status as a lead in the luxury sector, alongside Italy, which has two brands on the list. The list is headed by Louis Vuitton, Hermès, Gucci, Chanel and Rolex. British style is represented by Burberry. With respect to jewellery, the French giant Cartier competes with the US company Tiffany & Co., both of which operate in all the World's main capital cities.
Germany still sets the stand for luxury in the automobile sector, with four of the seven leading brands, which account for 70% of the market. In Spain, car sales are still on the rise, with BMW, Porsche and Mercedes being the three most popular brands.
Spain has also seen a consolidation in the trend detected in the most developed countries for experience-based services. The wealth generated by luxury hotels is set to reach 6.7 billion euros in 2020, which is an increase of 35% compared to 2015. In the case of spa resorts, the forecast for 2020 is 458 million euros, a rise of 18% from 2015.
MILLENIALS AND LUXURY CONSUMPTION
The new nuevas generations of consumers have joined the luxury sector with their own characteristic models of conduct. 46% of a millennial's purchasing decision is determined by the brand as a projection of their values. The influence of their environment is also significant (27.1%), at a similar level to the impact of the opinion of celebrities and influencers (26.9%) or, in other words, people with who they do not have any direct relation. The impact of influencers is the most characteristic feature of this group in comparison to earlier generations, who relied and focused almost exclusively on their immediate surrounding environment.
LUXURY IN THE DIGITAL AGE
Investment in advertising is not necessarily correlated to the markets with the highest consumption. In the Asia region, with the greatest consumption, investment in advertising decreased (-6%), while, in Latin America, it rose by 5%, surpassing even North America at 4%. Europe was the leader in terms of investment in luxury advertising (10%) in view of the high level of competition between brands, many of which are local, as well as the high purchasing power in these economies.
A total of 30.6% of advertising investment in the luxury sector is concentrated online, representing an increase of 5 percentage points in just two years. This statistic is significant because, traditionally, the luxury sector has been associated with the more prestigious conventional media, which now account for 31.3% in the case of television and 32.7% for the printed press. The reasons behind these trends include Big Data management and the huge importance of social media and influencers with respect to purchasing decisions.
Technology has become one of the main access channels for Asian countries such as China and South Korea. 30% of luxury purchases are made online. The number of enquiries before purchasing online has risen above 80%, which has led large brands to make significant investments in redesigning their websites, including tutorials, recommendations from specialists and influencers, augmented reality and virtual personalization programs, among other features.
The report highlights "city marketing" as a critical success factor in the luxury sector. In this respect, New York remains the favourite destination for acquiring and enjoying luxury goods, accounting for 27% of the market, followed by Paris and London at 13% each, Tokyo at 9% and Seoul at 8%.
In short, the three Ps have transformed the luxury sector: Products, People and Presence are completely changing the sector.
CONCLUSIONS
80% of the value of the luxury sector is concentrated in Western Europe and Asia, an area which has grown significantly in recent years.
The Asia Pacific region is the true driving force behind the luxury market, with growth of 9% compared to the previous year.
The list of the leading luxury brands in the world is headed by Louis Vuitton, Hermès, Gucci, Chanel and Rolex.
Germany still sets the stand for luxury in the automobile sector, with four of the seven leading brands, which account for 70% of the market.
46% of a millennial's purchasing decision is determined by the brand as a projection of their values.
In the Asia region, with the greatest consumption, investment in advertising decreased (-6%), while, in Latin America, it rose by 5%, surpassing even North America at 4%.
A total of 30.6% of advertising investment in the luxury sector is concentrated online, representing an increase of 5 percentage points in just two years.
30% of luxury purchases are made online.