The New Luxury Consumer: Experience Over Materialism
The last five years have seen some of the toughest trading conditions for the luxury industry. Demographic changes, currency fluctuations and shifts in consumer expectations are having the biggest impact. Despite these challenges, global sales grew by almost 4 percent in 2018, with a similar growth rate expected for 2019.
The global luxury industry is currently worth more than US$1 trillion, driven by very strong performances in Asia Pacific. Whereas Asia Pacific leads in global sales, China’s luxury goods spending makes up 68% of Asia Pacific sales.
Global Ultra-High-Net-Worth Individuals (UHNWI), High-Net-Worth Individuals (HNWI) and affluent consumers are the top three segments, representing half of world’s wealth. The HNWI market, although small, is an important driver of wealth generation and investment trends. This makes them a highly profitable consumer segment for the luxury goods industry. The US stands out as the country with the highest concentration of HNWI and wealth, making the US unquestionably the most significant high net worth market.
The growing importance of unique and mindful experiences for luxury consumers has been supported by redefined consumer values and healthy living trends. Consumers want more conscious, nutritious alternatives and are willing to pay for products to achieve this. Brands and businesses can appeal to and attract HNWIs by offering opportunities for consumers to indulge in experiences that promise to boost their health and well-being.
In addition to this, luxury brands need to adopt a seamless omnichannel approach to create a better and more convenient shopping experience to meet the ever-changing demands of high net-worth consumers.
To learn more about the strategies to win over the HNWIs, download our white paper, Meeting the Demands of High Net-Worth Individuals.