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Luxury Goods Retailing - International - August 2016

Published By :

Mintel

Published Date : Aug 2016

Category :

Luxury Goods

No. of Pages : N/A

The global luxury market continues to grow steadily, rising by 10.4% to €142 billion in 2015. The shift from wholesale to retail among leading brands has provided a boost to the value of the market and this strategy offers an opportunity for luxury players to strengthen their high-end positioning through greater control over distribution, discounting and the in-store experience. Uncertainties overhang the market, yet the underlying demand for luxury goods remains strong.

Overview

What you need to know
Products covered in this report
Report scope
Mintel market sizes
Defining luxury goods
Geographical breakdown
Technical notes
Financial definitions
Exchange rates
Figure 1: US Dollar to Euro annual average exchange rates, 2010-15

Executive Summary

The market
Market size and forecast
Figure 2: Luxury goods market size and forecast (excl. VAT), 2011-21
A regional view
Figure 3: Regional share of the luxury goods market, 2007-15
Figure 4: Top 10 countries in the luxury market, by sales, 2014-15
Segmentation by product
Figure 5: Luxury goods market split by product category, % share, 2011 and 2015
Companies and brands
Market shares
Figure 6: Leading luxury companies: % share of all luxury sales, 2014 and 2015
The consumer
Who buys luxury goods
Figure 7: Those who had bought luxury goods in the last 18 months, by country, May/June 2016 and April/May 2015
Where they buy
Figure 8: Where they bought luxury goods, by country, purchases made in-store in home country, May/June 2016
Figure 9: Where they bought luxury goods, by country, purchases made in-store abroad, May/June 2016
Luxury online
Figure 10: Percentage of luxury goods shoppers buying luxury goods online in the last 18 months, by type of retailer website, May/June 2016
Interest in luxury products and services
Figure 11: Interest in luxury products and services, May/June 2016
Attitudes towards luxury goods
Figure 12: Attitudes towards luxury products, May/June 2016
What we think

Issues and Insights

What is driving growth in the luxury market?
The facts
The implications
The downward pressure on pricing in luxury
The facts
The implications
Strengthening the high-end positioning through luxury store experiences
The facts
The implications

The Luxury Market – What You Need to Know

Steady growth
Mintel’s market size
High Net Worth Individuals
Americans are low spenders
Fashion and leather the largest sector

Market Size and Forecast

Uncertainty
Retail vs wholesale
Outlook
Figure 13: Luxury goods market size and forecast (Excl VAT), 2011-21

Market Drivers

What are luxury goods?
How important is quality?
Who buys luxury goods, when and where?
Luxury goods prices
Wealthy individuals
Figure 14: Numbers and share of wealth of HNWIs, 2015
Growth in numbers
Figure 15: Number of HNWIs, 2003-15
Figure 16: Numbers of HNWIs, 2007-15
Figure 17: Wealth of HNWIs, 2011-15
Figure 18: Average wealth of HNWIs, 2003-15
Economic background
Figure 19: GDP growth in US dollars at current values, 2011-16
Figure 20: Leading international currency exchange rates, 2002-16
Stock markets
Figure 21: Leading stock markets year-on-year growth, 2010-15
Tourism
Figure 22: International inbound tourism, 2000-15

Luxury Market – A Regional View

Regional analysis
Market size by region
Figure 23: Luxury goods markets, 2011-15
Figure 24: Regional share of the luxury goods market, 2007-15
Country market sizes
HNWIs and spending by region
Figure 25: Sales of luxury goods per HNWI by region, 2011-15
HNWIs and spending by country
Figure 26: Top 10 countries in the luxury market, by sales, 2011-15
Figure 27: Country shares of the global luxury market, 2011-15
Americas
Figure 28: The Americas: Leading luxury goods markets, 2011-15
Figure 29: Leading American luxury markets’ share of all luxury spending in the Americas, 2011-15
Asia Pacific
Figure 30: Asia Pacific region: Leading luxury goods markets, 2011-15
Figure 31: Asia Pacific region: Leading luxury goods markets, 2011-15
Europe
Figure 32: Europe: Leading luxury goods markets, 2011-15
Figure 33: Leading European luxury markets’ share of all luxury spending in Europe, 2011-15

Luxury Market – Segment Performance

Fashion and leather goods
Market size
Figure 34: Global luxury market: Fashion and leather goods sales, 2011-15
Market share
Figure 35: Top 10 leading luxury goods retailers, by % share of global luxury fashion and leather goods market, 2015
Jewellery and watches
Market size
Figure 36: Global luxury market: Jewellery and watch sales, 2011-15
Market share
Figure 37: Top 10 leading luxury goods retailers, by % share of global luxury fashion and leather goods market, 2015
Perfumes and cosmetics
Market size
Figure 38: Global luxury market: Perfumes and cosmetics sales, 2011-15
Market share
Figure 39: Top 10 leading luxury goods retailers, by % share of global luxury perfumes and cosmetics market, 2013 and 2014

The Consumer – What You Need to Know

China and the US see growth in luxury shoppers
The young and affluent drive luxury purchasing
In-store purchasing in the home country remains dominant
Chinese luxury spend migrating overseas and online
Growth online is being driven by official brand websites
VIP events could tap into high-earners’ spend
Personalisation key to luxury retail
Luxury market remains discount driven
Just a third of shoppers think luxury items offer superior quality

Who Buys Luxury Goods

Technical note
China and the US see growth in luxury shoppers
Figure 40: Those who had bought luxury goods in the last 18 months, by country, May/June 2016 and April/May 2015
Men out-purchase women
Figure 41: Those who had bought luxury goods in the last 18 months by country and by gender, May/June 2016
Young consumers drive luxury purchases
Figure 42: Those who had bought luxury goods in the last 18 months by country and age, June 2016
Figure 43: Those who had bought luxury goods in the last 18 months, China, by age, May 2016
Affluence determines purchasing behaviour
Figure 44: Those who had bought luxury goods in the last 18 months in Spain, Italy, France and Germany by household income, June 2016
Figure 45: Those who had bought luxury goods in the last 18 months in UK, USA and China by annual household income (monthly income for China), May/June 2016

Where They Buy

In-store purchasing in the home country remains dominant
Figure 46: Where they bought luxury goods by country, May/June 2016
Department stores the retailer of choice
Figure 47: Where they bought luxury goods by country, May/June 2016
Luxury brands gain shoppers through their own retail channels
Figure 48: Percentage-point increase/decrease in online shopper numbers, by country, 2015 vs 2016
Trend data
UK
Figure 49: UK: Where they bought luxury goods by selected channels, May 2015 and June 2016
Mainland Europe
Figure 50: Mainland Europe: Where they bought luxury goods by selected channels, May 2015 and June 2016
US
Figure 51: US: Where they bought luxury goods by selected channels, May 2015 and June 2016
Chinese luxury spend migrating overseas and online
Figure 52: China: Where they bought luxury goods by selected channels, May 2015 and May 2016
Who buys where?
UK
Figure 53: UK: Where they shop for luxury in UK, by age and affluence, June 2016
France
Figure 54: France: Where they shop for luxury in France, by age and affluence, June 2016
Germany
Figure 55: Germany: Where they shop for luxury in Germany, by age and affluence, June 2016
Italy
Figure 56: Italy: Where they shop for luxury in France, by age and affluence, Italy 2016
Spain
Figure 57: Spain: Where they shop for luxury in Spain, by age and affluence, June 2016
US
Figure 58: US: Where they shop for luxury in the US, by age and affluence, June 2016
China
Figure 59: China: Where they shop for luxury in China, by age and affluence, May 2016

Interest in Luxury Products and Services

Figure 60: Interest in luxury products and services, May/June 2016
Men show greater interest in wearable technology
Figure 61: Interest in wearable technology, by gender, June 2016
VIP events could tap into high-earners’ spend
Figure 62: Interest in in-store events organised by luxury brands, by gender, June 2016
Personalisation key to luxury retail
Figure 63: Interest in personalisation, June 2016
Opportunity for designer rental services in the US
Figure 64: US: Interest in designer clothing, accessories or jewellery rental and monthly subscription services, by demographics, June 2016

Attitudes towards Luxury Goods

Figure 65: Attitudes towards luxury products, May/June 2016
Luxury market remains discount driven
Figure 66: Those that have bought luxury items on discount/special offer in the last 18 months, by gender, May/June 216
Brands must communicate the superior quality of their luxury goods
Figure 67: Agreement that luxury products offer superior quality than non-luxury products, high earners vs all luxury buyers, June 2016
Savvy shoppers mix and match luxury with non-luxury
Second-hand luxury market has potential
Figure 68: Purchasing of luxury items second hand, May 2016
Young Chinese opt for unique designs over visible logos
Figure 69: China: Those who prefer luxury products with a visible logo and those who like to wear items from less well-known luxury designers, by age, May 2016

Brand/Company – What You Need to Know

LMVH out in front
Christian Dior Couture strongest CAGR
Americas the fastest growing region
Luxury market dominated by a few players
Innovation on the catwalk
Online sales reach €10bn
Social media crucial for luxury brands

Innovation and Launch Activity

‘Wow factor’ store experience
Runway show innovation
Ethical credentials
Luxury watch with contactless payment functionality
Limited-editions enhance exclusivity
Boutique at sea

Online and Social Media

The market
The outlook
The brands online
Figure 70: Major luxury brands: Number of markets with transactional websites, 2014-16
The luxury retailers online
The consumer: Shopping online
Figure 71: Percentage of luxury goods shoppers buying luxury goods online in the last 18 months, May 2014-16
Figure 72: Percentage of luxury goods shoppers buying luxury goods online in the last 18 months, by type of retailer website, May 2016
Online convenience
Figure 73: I like the convenience of shopping for luxury products online, May/June 2016
Social media
Burberry
The beauty brands
Vloggers and Influencers
See it, buy it

Company Metrics

Figure 74: Leading luxury companies, by net revenues, 2013-15
Revenue growth rates
Figure 75: Leading luxury companies: % CAGR in revenues, 2011-15
Product revenue mix
Figure 76: Leading luxury companies: Sales mix (%), by product group revenue, 2015
Figure 77: Leading luxury companies: Percentage point change in product mix by product group revenue, 2011-15
Regional revenue growth
Figure 78: Total luxury sales growth (%), by region, 2011-15
Store numbers
Figure 79: Selected leading luxury retailers, estimated store numbers, 2015
Brand ownership
Figure 80: Brand ownership, by leading luxury companies, 2016
Swiss watchmakers output
Figure 81: Share of all COSC certificates accounted for, by leading Swiss-watch brands, 2014-15
Figure 82: Number of Swiss watch certificates issued by the COSC, 2014-15
Figure 83: Number of Swiss watch certificates issued by the COSC, three leading brands, 2011-15
Brand Sales and Market Shares

Figure 84: Top 10 luxury companies, share of all luxury goods sales, 2013-15
Figure 85: Leading luxury brands: Sales, 2013-15
Figure 86: Leading luxury brands: Share of all luxury sales, 2013-15

Appendix – Data Sources, Abbreviations and Supporting Information

Data sources
Abbreviations
Consumer research methodology

Burberry Group

What we think
Performance
Strategy
Unifying the Burberry label into a single brand
Embracing the commercial value of Snapchat
A change to the seasonal runway calendar
Experience is all
Where next?
Company background
Company performance
Figure 87: Burberry Group Plc: Group financial performance, 2011/12-2015/16
Figure 88: Burberry Group Plc: Group financial performance, revenue by product division, 2011/12-2015/16
Figure 89: Burberry Group Plc: Outlet data, 2011/12-2015/16
E-commerce

Christian Dior Couture

What we think
Double-digit retail revenue growth on back of store investment
Tapping into haute couture demand in emerging markets
New creative director to lure female clients away from rivals
Luxury menswear retail
Advertising
Company background
Company performance
Figure 90: Christian Dior Couture: Financial performance, 2011-2015/16
E-commerce

Coach

What we think
Reconnecting the brand with its core craftsmanship roots
Unique in-store experience
New luxury store concept to showcase the brand
Reinventing itself as a full lifestyle label
Apple Watch tie-up
Walt Disney collaboration brings together two iconic brands
Company background
Company performance
Figure 91: Coach Inc.: Group financial performance, 2011/12-2015/16
Figure 92: Coach Inc.: Net sales, by region, 2011/12-2015/16
Figure 93: Coach Inc.: Coach product sales breakdown, 2011/12-2014/15
Figure 94: Coach Inc.: Operated store data, 2012/13-2014/15
E-commerce

Estée Lauder

What we think
Skincare struggles while haircare excels
Targeting the young
The ‘Ageless’ market
Figure 95: Darphin Exquisâge Beauty Revealing Collection, 2015
Man in the mirror
Company background
Company performance
Figure 96: Estée Lauder Companies: Group financial performance, 2010/11-2015/16
Figure 97: Estée Lauder Companies: Group financial performance, by region, 2010/11-2014/15
Figure 98: Estée Lauder Companies: Group financial performance, by product category, 2010/11-2014/15
E-commerce

Giorgio Armani

What we think
40th anniversary celebrations go digital
Introducing the New Normal
Extensions create a lifestyle brand
Company background
Company performance
Figure 99: Giorgio Armani: Group financial performance, 2011-15
E-commerce

Hermès

What we think
Performance
Partners with Apple on the Hermès smartwatch series
Increasing manufacturing capabilities to meet demand
Strengthens relationship with footwear designer Pierre Hardy
Improving brand transparency
Where next?
Company background
Company performance
Figure 100: Hermès: Financial performance, 2011-15
Figure 101: Hermès: Sales by product category, 2014-15
E-commerce

Kering

What we think
The resurgence of Gucci in 2015
More ways to shop Bottega Veneta
YSL revenue up 37.8% on the back of e-commerce and store expansion
Luxury fashion themed restaurants
Company background
Company performance
Figure 102: Kering: Financial Performance, 2011-15
Figure 103: Kering Luxury: Breakdown of revenue by region, 2011-15
Outlets
Figure 104: Kering Luxury: Directly-operated stores, 2014-15
E-commerce

L’Oréal Luxe

What we think
Make-up a driver of luxury growth
Travel Retail
Digital
Company background
Company performance
Figure 105: L’Oréal Group: Net revenues by division, 2011-15
Figure 106: L’Oréal Luxe: Financial performance, 2011-15
Figure 107: L’Oréal Luxe: Sales by region and product area, 2011-15
E-commerce

LVMH

What we think
Where next
Company background
Company performance
Figure 108: LVMH: Group financial performance, 2011-15
Figure 109: LVMH: Distribution of revenues by region, 2011-15
Figure 110: LVMH: Distribution of segment revenues by region, 2011-15
Figure 111: LVMH: Sales by type of distribution, 2013-15
Figure 112: LVMH: Outlet portfolio, 2014, 2015
E-commerce

Prada Group

What we think
Performance
Strategy
New social responsibility
Tapping into the personalisation trend
See now, buy now
Where next?
Company background
Company performance
Figure 113: Prada: Group financial performance, 2011/12-2015/16
Figure 114: Prada: Group net revenue breakdown, by channel, 2011/12-2015/16
Figure 115: Prada: Group financial performance, by trademark, 2011/12-2015/16
Figure 116: Prada: Group retail revenue breakdown, by channel, 2011/12-2015/16
Figure 117: Prada: Group revenue breakdown, by product line, 2011/12-2015/16
Figure 118: Prada: Directly operated stores, 2013/14-2015/16
E-commerce

Ralph Lauren Corporation

What we think
New CEO brings mass market retail acumen to shore up the business side of things
Getting designs to market more quickly
Focusing more on the company’s three core brands
E-commerce improvements driving retail revenue
Reimagining the shopping experience
Company background
Company performance
Figure 119: Ralph Lauren Corporation: Group financial performance, 2011/12-2015/16
Figure 120: Ralph Lauren Corporation: Store and concession-based shop-within-shops network, 2012-16
E-commerce

Richemont

What we think
Where next?
Company background
Company performance
Figure 121: Richemont: Group financial performance, 2011/12-2015/16
Figure 122: Richemont: Revenues by region, 2013/14-2015/16
Figure 123: Richemont: Revenues by product category, 2013/14-2015/16
Figure 124: Richemont: Performance by Maison, 2013/14-2015/16
E-commerce

Shiseido

What we think
VISION 2020 paves the way
China is challenging but holds promise
Loss of the Gaultier licence will hit EMEA
Travel Retail represents a growth area
Company background
Company performance
Figure 125: Shiseido: Group financial performance, 2010/11-2016
Performance by brand
Figure 126: Shiseido revenues, by region, 2010/11-2015
Figure 127: Shiseido revenues, by region, 2015-16
E-commerce

Swatch Group - Luxury

What we think
Master Chronometer
Brand extension
Revamping online but e-commerce still missing
Store expansions
Company background
Company performance
Figure 128: Swatch: Group financial performance, 2011-15
Figure 129: Swatch Group: Net sales, by region, 2011-15
Figure 130: Swatch Group: Watches and jewellery segment performance, 2011-15
E-commerce

Tiffany & Co.

What we think
Net-a-Porter deal an opportunity for the heritage brand to reach a new audience
Focusing on reinvigorating non-jewellery offering
Limited editions strengthen Tiffany & Co.’s exclusivity credentials
Boutique at sea to woo affluent travellers
Company background
Company performance
Figure 131: Tiffany & Co.: Group financial performance, 2011/12-2015/16
Figure 132: Tiffany & Co.: Stores and estimated sales per outlet, 2011/12-2015/16
E-commerce

Tod’s Group

What we think
Partners with Net-a-Porter
New third party e-commerce strategy to reach out to China’s online luxury consumers
Slowdown in store expansion on the back of slump in same-store sales
Bolstering its authentic Italian style credentials
Considering scrapping six-monthly collections and introducing new products every month
Company background
Company performance
Figure 133: Tod’s Group: Financial performance, 2011-15
Sales by region
Figure 134: Tod’s Group: Sales, by region, 2015
Figure 135: Tod’s Group: Sales, by region, 2014-15
Sales by product category
Figure 136: Tod’s Group: Sales, by product type, 2015
Figure 137: Tod’s Group: Sales by product type, 2014-15
Sales by brand
Figure 138: Tod’s Group: Sales by brand, 2015
Figure 139: Tod’s Group: Sales, by brand, 2014-15
E-commerce

YNAP Group

What we think
The merger
Where next?
Company background
Company performance
Figure 140: YNAP group: Group financial performance, 2012-15
Retail offering
Figure 141: YNAP Group: Sales mix, 2014

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