Luxury wants to thank the Millennials
Millennials, women and men born between 1980 and 2000, are the absolute key players with 80% of luxury sales. Their entry onto the luxury market has radically changed buying modalities and has forced brands to redefine their offer. In fact, this digital generation is revolutionizing the market and its habits.
The best performance among sales channels, and certainly due to this category of customer, was achieved on-line (+24%), followed by airports (+12%) and outlets (+12%). The digital revolution is running wild and companies need to get up to date in order to keep pace. They need to offer story-telling content that can then translate into story selling. In an increasingly connected world, the ability to interpret change by offering fast and easy solutions will become more and more crucial for the success of luxury companies and other segments. But going back to the details of this study, Altagamma's Market Monitor reports a +15% growth forecast in China for 2017 obtained by the acceleration of its middle class and its greater purchasing sophistication which will see China return to a leading role with 20 billion Euros. However, by far the most interesting aspect is Europe's 87 billion Euros (+6%), which overtakes the Americas' 84 billion Euros (+2%) due to the complicated moment that US department stores are currently experiencing. The rest of Asia registered a +6% increase (36 billion Euros) and Japan saw a +4% increase (22 billion Euros) while the rest of the world was more or less stable at Euro 13 billion (+1%). For Andrea Illy, President of Altagamma: “These are not just positive and greater than expected results, they also confirm the powerful role that Made in Italy plays in the luxury world and the Italian economy.” And figures are even more promising for 2018 considering that a further +5% is forecast for personal luxury goods and, looking ahead to 2020, annual average growth should stand at between 4 and 5%, taking the segment to between 295 and 305 billion Euros.
Market trends are also balanced: sales will increase everywhere with a record of +10% in Asia. Average earnings will undergo the same increase: our panel of analysts foresee a 10% increase in Ebitda, confirming the sector's soundness. The future looks rosy, especially thanks to the Millennials - the driving force behind this exponential growth.