State of Luxury Fashion
The expected profit and revenue for luxury fashion products worldwide is US $ 106,850m and with a future analysis the market is expected to grow annually by 4.81% (CAGR 2021-2025). Statistics also say that, at the moment, in a global comparison, most revenue is generated in the United States, approximately $27,306m for the year 2021.
Actually, before the global pandemic the global luxury goods market was expected to increase from $285.1 billion in 2020 to $388 billion in 2025, at a CAGR of 6.4%. However, with the emergence and spread of the pandemic, growth will not be as linear due to reductions in consumption and levels of GDPs, and employment falling.
But there is always hope and 2021 is the year of hope! This growth and the return to “normality” is expected to happen later this year with the help of Mainland China’s recovery, pent-up demand by Millennials and Generation Z, and the ongoing maturity of the digital channel. It was at this time of decline and change that the luxury fashion industry was completely transformed. The general idea of Luxury 4.0 is emerging, characterized not only by the growth of the online sales channel but also by the digitization of the entire journey and experience of luxury shopping.
Old Luxury vs New Luxury
This led to the need to rethink luxury as we know it and to give birth to a new generation of luxury fashion that follows modern times. So the battle between “traditional luxury” and “new luxury” has become more intense and sexier than ever!
The old luxury no longer has a place in the minds of new consumers and with the growing influence of Millenials and Gen Z, the industry is gradually moving towards more sustainable and ethical products with a great experiential component. For some brands, this can be a challenge, but for the most creative and innovative ones, it is actually a great opportunity to raise the bar and be the game-changers in this new and modern luxury industry. Therefore, we will say goodbye to aspects such as extreme exclusivity, overabundance, and barriers in society that were so characteristic of traditional luxury, to say hello and welcome a more thoughtful, conscious, inclusive, transparent, and above all more humane luxury.
Learnings from The Future of Luxury Fashion report
In our latest report The Future of Luxury Fashion, we interview and collaborate with incredible professionals in the industry to understand what will happen in the next few years in the world of luxury fashion. For that, we had the participation of Amber Jae Slooten, co-founder and creative director at The Fabricant who advised the luxury fashion industry to wake up to reality if they want to stay in the game.
Jake Bjorseth, CEO and founder of Trndsttrs, a North American marketing and advertising agency specializing in Gen Z that enlightened us on the future of retail, but in the eyes of the most recent and complex generation: Gen Z. Ihsane El Ghazouani, Omnichannel Innovation Project Manager at Galeries Lafayette Paris was also one of our guests who reflected with us on the future of department stores.
Timmu Toke, CEO at Wolf3D has developed an exclusive article for our report on what happens when luxury meets metaverse. On that note, Anne-Christine Polet, Head of HATCH & STITCH shared with us wonderful insights into the love-hate relationship between luxury and digital.
We also had the opportunity to interview Cameron-James Wilson, also known as “The Man Behind The World’s First Digital Supermodel”, founder and CEO of The Diigitals, the world’s first all-digital model agency to tell us a little better about virtual models and how they are the new allies for digital luxury. Kristina Karassoulis from TikTok was also present in the elaboration of this fabulous report sharing insights on how TikTok has become the luxury fashion brands’ best friend over the last year. From a more analytical perspective, we invite Fflur Roberts Head of Global Luxury at Euromonitor International to share with us what will be the turning points for luxury retail.
In 2020, we saw the birth of the most beautiful and incredible virtual stores of some luxury fashion brands. We couldn’t help wanting to find out who the brilliant minds were behind the building of a new retail format that gives a new life to online retail. After a short research, we discovered that Obsess was responsible for the development of the most fascinating stores we’ve ever seen. So we contacted Amrita Maria, Business Development Manager at Obsess to share her vision with us as well as the company’s vision for the future of luxury fashion retail.
We all know that the omnichannel theory has led the retail sector in recent years.However, we also know that the future is unpredictable and that the next great theory that redefines retail may be just around the corner. So, we ask ourselves, what will be the next big thing to shake luxury retail? To answer this question we invited Maghan McDowell, senior Innovation Editor at Vogue Business.
We tried to understand the future of luxury in the eyes of a brilliant and inspiring trend forecaster, Geraldine Wharry who said with us that the reset button of luxury is: philosophical. During the development of this incredible report, we also flew to China (virtually) where we spoke with Pablo Mauron managing director and partner at Digital Luxury Group to share his insights on how the luxury Chinese market uses innovation and technology platforms to stand out from the rest of the world.
Based on all these huge shifts we believe that luxury is experiencing an identity crisis, now more than ever. The question is: What is luxury? For this same reason, we invite Dr. Martina Olbert, the world’s leading expert on meaning in business and a visionary thinker redefining the future of luxury.
Almost at the end, we invite Joana Esteves, Retail Sales Manager of Josefinas Portugal, to understand the secret formula to conquering the luxury fashion market through a charming and emotional brand. We also invite Serge Carreira, Lecturer on Fashion & Luxury at Sciences Po, in Paris, and Head of Emerging Brands Initiative at the Fédération de la Haute Couture et de la Mode, to reflect with us on the future of haute couture.
Still anxious to understand what the store of the future will be like, we sat down with Lui Iarocheski, marketing director at PlatformE, who shared with us everything about the future of luxury retail, and together we dream about what the store of the future will be. And last but not least, we had a big question at the beginning of the investigation: between new pieces and pre-owned luxury, who wins the battle? To answer this challenging question and have a better understanding of these markets, we invite Maria Pimentel, fashion buyer & consultant for the Fashion Clinic, Gucci, and Dolce & Gabbana at Amorim Luxury Group, to share her wonderful and fascinating insights with us!
It is impossible not to be curious right? You can access our wonderful and unforgettable report for free here!