Luxury Goods Retailing - International - August 2014
“Especially in China, we expect 2014 and 2015 to be years of lower demand for ostentation and greater demand for niche, discreet luxury brands.”
– Hilary Monk, Senior Retail Analyst
This report answers the following questions:
- Out-of-country shopping: how big is it and what are the implications?
- Why is online bigger than might be expected?
- Ostentatious luxury in decline?
- How big have brands’ own stores become?
Mintel’s Luxury Goods Retailing – International, August 2014 includes Mintel’s proprietary global market size and forecast, as well as bringing together key operating statistics for leading luxury companies.
The report is concerned just with luxury products and not with other aspects of luxury which fall outside our strict retail definition, such as Cars, Holidays and Art.
The report also includes findings from Mintel’s exclusive consumer research carried out across seven major markets: the UK, the US, France, Germany, Italy, Spain and China. This proprietary data provides valuable insights into attitudes and buying habits related to luxury goods in the major markets.
The report includes profiles of 16 leading luxury companies, spanning the categories that are the focus of this report: watches and jewellery, apparel and leather goods, and fragrance and cosmetics.
Luxury goods are unusual in the retail context in that there is growing vertical integration in the sector. But more than that it is the products and brands that are luxury, rather than the retailers. The major luxury groups are taking a greater control of their retail outlets and the practice of wholesaling and licensing is very much in decline.
The concept of luxury goods is inevitably highly subjective. It is usually obvious where a product is luxury and equally obvious where it isn’t, but there is a grey area between which is more subjective. Take the Swatch group, for example. Swatch itself is clearly mass market and, while they are more upmarket, we think that Longines and Tissot are too. But Omega is a luxury brand, and one of the more desirable as well.
The term “luxury” usually carries with it the idea that there is a very high level of craftsmanship involved and that the products carry a high price so that they are out of the reach of most mass market buyers. Unfortunately they can also carry connotations of ostentation and even “bling”. Many are for people who want to appear richer than they actually are. (An issue which is beyond the scope of this report to investigate is – how many of the genuinely super-rich actually buy luxury goods?)
In our analysis there are three main categories of luxury goods to which we add a miscellaneous group of smaller products:
- Fashion & leather goods
- Fragrances & cosmetics
- Jewellery & watches
- Other – writing instruments, eyewear, furniture and other home goods and other miscellaneous items. It may also include a small element from hotels (eg Bulgari), spas and bars.
Food, beverages, tobacco, electronic/electrical goods, automobiles and services such as travel are all excluded.
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