Analyst Insight by Neil King - Analyst, Automotive
Of the markets that Euromonitor covers, Hong Kong has the highest retail value sales of luxury goods per household, but it is especially striking that this is four times higher than consumer expenditure per household on the purchase of motor vehicles. Even in China, luxury goods sales only amount to 66% of consumer expenditure on buying motor vehicles. However, there are two very good reasons for this phenomenon in Hong Kong; luxury-obsessed consumers and low levels of private vehicle ownership.
Continue reading "Personal Vehicles a Rarity in Hong Kong; Consumers Spend on Luxury Instead " »
Analyst Insight by Neil King - Analyst, Automotive
Two persistent questions in the European automotive industry are whether car sales have finally bottomed out in the region and if they will ever return to pre-crisis levels. As private car purchases are discretionary in nature, I thought it interesting to consider another sector that relies upon discretionary purchasing as opposed to necessity buying; luxury goods. In comparing the retail value sales growth of luxury goods per household between 2004 and 2012 against the performance of consumer expenditure per household on the purchase of motor vehicles, there were two notable findings.
First, luxury goods sales per household already recovered back to 2004 levels in 2012 in France, Germany and Italy and are only slightly down in the UK, although they are still over 20% lower in Spain. Second, the recovery of the luxury goods sector is stronger in each country than that of consumer expenditure on the purchase of motor vehicles, which remained at least 10% off the 2004 level in 2012 in the EU Big 5, with the exception of Germany, which was down by 9.9%. This naturally suggests that the propensity to spend on luxury goods has recovered from the crisis better than consumers’ inclination to purchase motor vehicles. In fact, luxury goods themselves may be partly responsible for the sluggish recovery of the European automotive sector as consumers seemingly prefer to indulge in luxury items than committing to on-going repayments for a car.
Continue reading "The European Luxury Goods Industry is Back on Its Feet but Automotive Still Limps On" »
Analyst Insight by Rob Walker, Contributing Analyst
Here are three questions that ought to get the pulse rate running of any self-respecting brand or marketing manager. What is your Facebook strategy? What is your Twitter strategy? What is your YouTube strategy? You can add Google, Weibo, Instagram, Tumblr and a host of other social media platforms to that list too. Skill in engaging with these forums is now key to competitive differentiation in consumer goods marketing. Yet, many of the world’s leading luxury brands – especially those in hard luxury – have been slow in developing a strategy.
Things are changing. Social media is fast becoming the big new battleground for luxury timepieces and jewellery. Rolex, for example, launched its official Facebook page earlier this year and now showcases its newest products on YouTube. Last month, Omega began building a presence on Instagram. Cartier makes big budget video advertisements for Facebook. There is no shortage of innovative digital endeavour, but have these luxury brands really thought their social media strategies through?
Continue reading "Luxury Brands and the Lure of Social Media" »
Analyst Inisght by Sulabh Madhwal - Analyst, Personal Accessories and Eyewear
A prolonged Eurozone crisis and renewed fears about the US economy have sparked several new developments in the world of jewellery. In 2013, the state of the global economy has led to a combination of restricted consumer expenditure, fluctuations in raw material prices and new marketing initiatives, all of which have in turn provided for an interesting leadership race in key markets such as China and the US. We explore these events through a two-part opinion series, the first of which focuses on real jewellery.
Global Consumers Continue to Drift Away From Luxury
Continue reading "Developments Shaping Real Jewellery Competition in 2013" »
Analyst Insight by Sulabh Madhwal - Analyst, Personal Accessories and Eyewear
Luxottica Group SpA and Safilo Group SpA dominate spectacle frames and sunglasses globally. Both companies offer comprehensive portfolios of licensed brands, making renewals and new partnerships vital in terms of retaining leadership. However, Luxottica managed to outshine Safilo in terms of portfolio changes over the review period, thus weakening the latter’s global position in spectacles.
Continue reading "Luxottica Winning Licence War as Safilo Tries to Repair Damage" »
Analyst Insight by Serena Jian
Car air fresheners proved the most dynamic air care category in 2012,
beating the economic downturn to post 8% value growth while the wider
air care category grew by just 3.5%.
This strong performance was largely driven by the launch of Procter
& Gamble’s Febreze Car Vent Clips in the US, the world’s largest air
care market. Leveraging the Febreze brand name, the product achieved a
whopping 15% share in its first year to take third position behind the
specialist car accessories brands Little Trees (27%) and Auto
Expressions (25%). The success of Febreze Car Vent Clips subsequently
produced a turnaround in the wider US air care category, driving 2%
value growth in 2012 after four years of consecutive declines. With the
US economy on course for a steady recovery from 2013, it would appear
that consumers are reverting to more indulgent lifestyles, thus opening
up opportunities for further development in the car air fresheners
category. Euromonitor International investigates.
Continue reading "Affordable Luxury and Designer Fragrance: A Missed Opportunity in Automotive Air Care?" »
Analyst Opinion by Rob Walker - Contributing Analyst
There is an economic wind change in Latin America at the moment, and
the outlook for Brazil is getting brighter. This is because commodity
prices have received a new injection of life thanks to surprisingly
strong third quarter GDP growth in China. As a commodity driven (and
increasingly Chinese-oriented) economy, Brazil is reaping the upside. On
the flipside, Mexico’s economy – which had been doing so well – is
getting more sluggish by the month, reflecting its heavy dependence on
the US, where economic recovery is stalling. It is a reminder that
conditions change very quickly in emerging regions.
Continue reading "Brazil’s Second-Tier Cities Present Untapped Opportunity for Luxury Brands" »
Analyst Insight by Daphne Kasriel - Consumers Editor
More brands are turning to social media in place of events to launch
products – an approach that has been called ‘social unveiling’. Saluting
the ability of social media to reach a wide audience quickly, designers
and brands are choosing platforms such as Pinterest (a pinboard-style
photo-sharing website) and the Snapchat photo messaging app to debut new
goods. This approach is creating an incentive for online engagement
with brands and generating media attention. Meanwhile, this very
contemporary approach to promotion optimizes campaigns for sharing.
Continue reading "Social Unveiling: Hoping to Convert Followers into Buyers" »
Analyst Insight by Mylan Nguyen - Analyst, Retail
Hypermarkets Engaged in a Price War
Five years into the global
economic downturn and price remains a key word for French consumers. According
to a recent study, some 80% of French consumers compare prices before
purchasing non-grocery items, while for groceries some 42% use price comparison
engines to determine the cheapest retailer. Grocery retailers have therefore
started a price war both in stores and through their communication campaigns. Hypermarkets,
the most dominant format in French grocery retailing, have adapted their
strategies over the years, aiming to attract consumers through their widespread
presence and strong promotion of lowest price guarantees on private label and
national brands. Some retailers, such as Simply Market (Auchan Group SA) and
Géant Casino (Casino Guichard-Perrachon SA), even reimburse their customers up
to 10 times if they can find the same products cheaper in other stores.
Continue reading "Top Five Retailing Industry Trends: France" »