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Designer Fashion - UK - November 2017

"The UK designer fashion market has likely benefitted from increased inbound tourism, with an uplift in overseas residents heading to the UK to shop as they look to take advantage of a weak Sterling. The outlook for domestic consumers is more challenging and designer fashion retailers will need to work hard to sustain growth. Meanwhile, many luxury brands need to rebuild trust in product quality and craftsmanship to attract today’s high-end fashion consumer."

– Samantha Dover, Retail Analyst

This report looks at the following areas:

  • Encouraging more frequent purchases
  • Tapping into online fashion shoppers
  • Opportunities to drive higher-value purchases

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • UK designer fashion sales boosted by tourism
              • Figure 1: Total spend by overseas residents in the UK, 2007-17
            • Outlook for UK consumers more challenging
              • Figure 2: Consumers’ future financial confidence, Jan 2009-Sep 2017
            • Companies and brands
              • Pureplays driving online innovation
                • Increasing focus on digital advertising
                  • The consumer
                    • Purchasing peaks among 16-24s
                      • Figure 3: What designer fashion items consumers have bought in the last 3 years, August 2017
                    • Self-purchasing drives market, but many also gift
                      • Figure 4: Who designer fashion items were bought for in the last 3 years, August 2017
                    • Most only shop every six months or less
                      • Figure 5: Frequency designer fashion items were bought in the last 3 years, August 2017
                    • Departments stores remain popular
                      • Figure 6: Where designer fashion items were bought in the last 3 years, August 2017
                    • Brand ethics are not a priority for many
                      • Figure 7: Important factors when buying designer fashion, August 2017
                    • Price sensitivity among consumers
                      • Figure 8: Attitudes towards designer fashion, August 2017
                    • What we think
                    • Issues and Insights

                      • Encouraging more frequent purchases
                        • The facts
                          • The implications
                            • Tapping into online fashion shoppers
                              • The facts
                                • The implications
                                  • Opportunities to drive higher-value purchases
                                    • The facts
                                      • The implications
                                      • The Market – What You Need to Know

                                        • A tougher outlook for UK consumers…
                                          • …but the UK’s HNWI population rising
                                            • Aging population could impact the market
                                              • Uplift in inbound tourism driving growth
                                              • Market Drivers

                                                • Rising inflation puts pressure on consumers
                                                  • Figure 9: Real wage growth – Average weekly earnings vs inflation, Jan 2014-Sep 2017
                                                • Consumer confidence weakening
                                                  • Figure 10: Consumers’ future financial confidence, Jan 09-Sep 17
                                                • Number of HNWI in the UK continues to rise
                                                  • Figure 11: Number of HNWIs in the UK, 2008-16
                                                • Changes to the population structure
                                                  • Figure 12: Trends in the age structure of the UK population, 2014-24
                                                  • Figure 13: Trends in the age structure of the UK population, 2014-24
                                                • Value of Sterling falls following Brexit vote
                                                  • Figure 14: Selected international currency exchange rates, annual averages, 2003-17
                                                  • Figure 15: Sterling exchange rate versus selected currencies, annual averages, 2013-17
                                                • Inbound tourism boosted by weak Sterling
                                                  • Figure 16: Total overseas residents’ visits to the UK, 2007-17
                                                • Uplift in overseas spending forecast
                                                  • Figure 17: Total spend by overseas residents in the UK, 2007-17
                                                • Average spend per visit declining
                                                  • Figure 18: Average spend per visit to the UK, 2012-16
                                                • Britain a popular tourist destination for French…
                                                  • Figure 19: Top 20 markets by volume of visits to the UK, 2016
                                                • …but Americans account for more tourism spend
                                                  • Figure 20: Top 20 countries by total amount spent when visiting the UK, 2016
                                                • Middle Eastern shoppers spend the most per visit
                                                  • Figure 21: Top 20 countries by average amount spent per visit to the UK, 2016
                                              • Companies and Brands – What You Need to Know

                                                • Pureplay retailers gain momentum
                                                  • Ongoing investment in technology
                                                    • Transparency increasingly important
                                                      • More focus on designer menswear
                                                        • Leading designers shift advertising spend
                                                        • Online

                                                          • Online growing share of total fashion spend in the UK
                                                            • Multi-brand pureplays growing fast
                                                              • MatchesFashion sales exceed £200 million
                                                                • Yoox Net-A-Porter strong growth continues
                                                                  • Farfetch GMV up 60% in 2016
                                                                    • Others struggle to create compelling online offer
                                                                      • Avenue 32 closure
                                                                        • Style.com closure
                                                                          • New players in the market
                                                                            • LVMH unveils 24 Sèvres
                                                                              • Oki-Ni relaunches
                                                                                • New standalone e-commerce sites
                                                                                  • eBay eyes growth in luxury
                                                                                    • Online retailers’ competitive strategies
                                                                                      • Improved order fulfilment
                                                                                        • Boosting customer experience
                                                                                          • The importance of physical retail environment
                                                                                            • International expansion
                                                                                              • Social media and content developments
                                                                                                • Emphasis on exclusivity
                                                                                                • Launch Activity and Innovation

                                                                                                  • Growing demand for sustainability
                                                                                                    • Figure 22: Selfridges Material World Campaign, 2017
                                                                                                  • Capturing consumers with provenance
                                                                                                    • Figure 23: Burberry Makers House, September 2016
                                                                                                  • Designer fashion brands get personal
                                                                                                    • The Store of the Future
                                                                                                      • Figure 24: Farfetch Store of the Future, 2017
                                                                                                    • Other store technology developments
                                                                                                      • Heathrow’s connected mirror
                                                                                                        • Figure 25: Heathrow’s Connected Mirror, 2017
                                                                                                      • Harrods’ helps customers navigate its store
                                                                                                        • The new Rent the Runway store
                                                                                                          • Messenger service replicates in-store experience
                                                                                                            • Leading designers serve the underserved
                                                                                                              • Experiential retail boosts designer store proposition
                                                                                                                • Figure 26: Harrods Wellness Clinic, 2017
                                                                                                              • Pop-up retail spaces
                                                                                                                • Figure 27: The Burberry Balloon at Heathrow, 2017
                                                                                                              • New demand for made in Britain
                                                                                                                • High street collaboration trend continues
                                                                                                                  • Figure 28: H&M x Erdem, 2017
                                                                                                                • Menswear Focus
                                                                                                                  • Figure 29: Harvey Nichols menswear department, 2016
                                                                                                              • Advertising and Marketing Activity

                                                                                                                • Louis Vuitton is the highest spending advertiser
                                                                                                                  • Figure 30: Recorded above-the-line, online display and direct mail advertising expenditure on fashion by selected leading designers, 2012-17
                                                                                                                • Press remains the biggest media channel
                                                                                                                  • Figure 31: Recorded above-the-line, online display and direct mail advertising expenditure on fashion by selected leading designers, 2012-17
                                                                                                                • Key campaigns
                                                                                                                  • Inclusivity in fashion advertising
                                                                                                                    • Tapping into the new influencers
                                                                                                                      • Campaigns focus on humour and escapism
                                                                                                                        • Changes in French fashion advertising
                                                                                                                          • Nielsen Ad Intel coverage
                                                                                                                          • The Consumer – What You Need to Know

                                                                                                                            • Young people drive the market
                                                                                                                              • Most buy for themselves
                                                                                                                                • Infrequent shoppers
                                                                                                                                  • High levels of online purchasing
                                                                                                                                    • Quality and fit most important
                                                                                                                                      • Trust in designer fashion low
                                                                                                                                      • What They Buy

                                                                                                                                        • Affluent, young people most likely to purchase
                                                                                                                                          • Figure 32: Consumers that have purchased designer fashion in the last 3 years, August 2017
                                                                                                                                        • Casual clothing and footwear drive the market
                                                                                                                                          • Figure 33: What designer fashion items consumers have bought in the last 3 years, August 2017
                                                                                                                                        • Women most likely to invest in designer bags
                                                                                                                                          • Figure 34: What designer fashion items consumers have bought in the last 3 years, by gender, August 2017
                                                                                                                                        • Young people actively buying across categories
                                                                                                                                          • Figure 35: What designer fashion items consumers have bought in the last 3 years, by age, August 2017
                                                                                                                                      • Who They Buy For

                                                                                                                                        • High levels of self-purchasing
                                                                                                                                          • Figure 36: Who designer fashion items were bought for in the last 3 years, August 2017
                                                                                                                                        • Older Millennials most likely to gift
                                                                                                                                          • Figure 37: Who designer fashion items were bought for in the last 3 years, by age, August 2017
                                                                                                                                        • Affluent shoppers buy for their partner
                                                                                                                                          • Figure 38: Who designer fashion items were bought for in the last 3 years, by socio-economic status, August 2017
                                                                                                                                        • Gifting higher among parents
                                                                                                                                          • Figure 39: Who designer fashion items were bought for in the last 3 years, by parental status, August 2017
                                                                                                                                      • Frequency of Purchase

                                                                                                                                        • A third buy once a year or less
                                                                                                                                          • Figure 40: Frequency designer fashion items were bought in the last 3 years, August 2017
                                                                                                                                        • Men shop more frequently
                                                                                                                                          • Figure 41: Frequency designer fashion items were bought in the last 3 years, by gender, August 2017
                                                                                                                                        • The 25-34s most likely to shop monthly
                                                                                                                                          • Figure 42: Frequency designer fashion items were bought in the last 3 years, by age, August 2017
                                                                                                                                      • How and Where They Shop

                                                                                                                                        • Online purchasing almost level with in-store
                                                                                                                                          • Figure 43: How designer fashion items were bought in the last 3 years, August 2017
                                                                                                                                        • Department stores attract most shoppers
                                                                                                                                          • Figure 44: Where designer fashion items were bought in the last 3 years, August 2017
                                                                                                                                        • Women more likely to shop via brand’s official website
                                                                                                                                          • Figure 45: Where designer fashion items were bought in the last 3 years, by gender, August 2017
                                                                                                                                        • Pureplays popular with 25-34s
                                                                                                                                          • Figure 46: Where designer fashion items were bought in the last 3 years, by age, August 2017
                                                                                                                                        • One in four affluent ABs shop at designer outlets
                                                                                                                                          • Figure 47: Where designer fashion items were bought in the last 3 years, by socio-economic status, August 2017
                                                                                                                                        • Footwear buyers more likely to shop online
                                                                                                                                          • Figure 48: How designer fashion items were bought in the last 3 years, by what they bought, August 2017
                                                                                                                                        • Jewellery shoppers buy direct from brand
                                                                                                                                          • Figure 49: Where designer fashion items were bought in the last 3 years, by what they bought, August 2017
                                                                                                                                        • Retailer loyalty high
                                                                                                                                          • Figure 50: Repertoire of where designer fashion items were bought in the last 3 years, August 2017
                                                                                                                                      • Important Factors When Purchasing

                                                                                                                                        • Quality most important to consumers
                                                                                                                                          • Figure 51: Important factors when buying designer fashion, August 2017
                                                                                                                                        • Women want items to coordinate with their wardrobe
                                                                                                                                          • Figure 52: Important factors when buying designer fashion, by age and gender, August 2017
                                                                                                                                        • Customer service important to older men
                                                                                                                                          • Figure 53: Important factors when buying designer fashion, by age and gender, August 2017
                                                                                                                                        • Parents buy into brand names
                                                                                                                                          • Figure 54: Important factors when buying designer fashion, by parental status, August 2017
                                                                                                                                      • Attitudes towards Designer Fashion

                                                                                                                                        • Demand for craftsmanship high
                                                                                                                                          • Figure 55: Attitudes towards designer fashion, August 2017
                                                                                                                                        • Magazines still inspire older Millennials to purchase
                                                                                                                                          • Figure 56: Agreement with attitudes towards designer fashion, by age, August 2017
                                                                                                                                        • Men more willing to pay more for British fashion
                                                                                                                                          • Figure 57: Agreement with attitudes towards designer fashion, by gender, August 2017
                                                                                                                                        • Rental services most likely to resonate with young
                                                                                                                                          • Figure 58: Agreement with attitudes towards designer fashion, by age, August 2017
                                                                                                                                        • Renting designer fashion – CHAID analysis
                                                                                                                                          • Methodology
                                                                                                                                            • Online shoppers interested in renting designer fashion
                                                                                                                                              • Figure 59: Designer fashion – CHAID – Tree output, August 2017
                                                                                                                                              • Figure 60: Designer fashion – CHAID – Table output, August 2017
                                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                              • Abbreviations
                                                                                                                                                • Consumer research methodology

                                                                                                                                                Designer Fashion - UK - November 2017

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