According to Deloitte Touch Tohmatsu Limited’s second annual “Global Powers of Luxury Goods” report, luxury goods are an increasingly powerful sector in the global economy. Based on data from 2013, the report identifies the 100 largest luxury goods companies in the world. It also pinpoints current market trends and issues, such as the need to engage luxury consumers according to technology’s influence on a range of channels.
Facts and Figures
The luxury goods market is growing tremendously. Luxury sales growth for 2013 was an astounding 8.2%, the compound annual growth rate in luxury goods sales from 2011-2013, according to Deloitte, was 9.8%. All told, the aggregate net luxury goods sales of the top 100 luxury goods companies was $214.2 billion the year data from the report was compiled.
Italy has the greatest number of luxury goods companies, with the US, France and Switzerland close behind. The picture of who the biggest players are in the global luxury market is similar when we look at countries with the most shares in luxury goods: France has the most with 23.2%, the United States is just behind France with 20.5% and Italy has 16.5% of the global shares.
Interestingly, the top three fastest-growing luxury goods companies are all clothing and accessories retailers: Michael Kors, Tory Burch and Kate Spade, the latter two of which are based in the US (Michael Kors is based in China).
Consumers and Challenges
Today’s luxury consumers, according to the Deloitte report, can be described as sophisticated, digitally-savvy, time-sensitive and socially aware. Luxury goods companies must learn how to reach this contemporary consumer base through a few key marketing practices.
Foremost, they must be innovative with technology. Luxury goods producers must capitalize on the wearable tech trend, and meet this challenge by fusing functional design with artistry that suits each user’s sophisticated taste. Luxury goods companies are also staying relevant by focusing their energies on developing more refined products.
Consumers also expect a greater deal of personalization and attention from luxury brands, who can stay ahead with heavily-involved customer relationship management systems and customer experience enhancing touch points.
Deloitte also noted that luxury goods companies must adapt to shifting consumer channels (as various as retail stores, magazines, eCommerce sites and airports) and give back to their communities in order to stay relevant with luxury goods consumers.