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The Luxury Consumer - US - August 2019

"The concept of luxury is evolving beyond fine jewelry and formalwear. For today’s consumers, easy, enjoyable, even interactive experiences can be luxuries as well. For younger, male consumers, however, recognizable brand names are still an important part of signaling a luxurious lifestyle. Designer brands must be able to interpret a redefined luxury and demonstrate their value through quality, expediency, customization and/or sustainability."
- Kristen Boesel, Senior Lifestyles & Leisure Analyst

This report looks at the following areas:

  • Those who can afford luxury products are among the least interested
  • Younger consumers want to show off their spending
  • Millennials are the generation most likely to spend on services

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Table of contents

  1. Overview

    • What you need to know
      • Definitions
      • Executive Summary

        • Overview
          • Takeaways and Opportunities
            • Takeaway #1: Those who can afford luxury products are among the least interested
              • Opportunities
                • Figure 1: Past two-year luxury brand purchase, total vs more affluent consumers, May 2019
              • Takeaway #2: Younger consumers want to show off their spending
                • Opportunities
                  • Figure 2: Attitudes toward brands and luxury, by age and gender, May 2019
                • Takeaway #3: Millennials are the generation most likely to spend on services
                  • Opportunities
                    • Figure 3: Services consumers pay for regularly, by generation, May 2019
                  • What it means
                  • The Market – What You Need to Know

                    • The term “luxury” still carries cachet
                      • Wealthy consumers may not be the best target for luxury brands
                        • Luxury brand purchasers skew younger and male
                        • Defining Luxury

                          • The concept of luxury is evolving
                            • Consumers’ idea of luxury
                              • “Expensive” and “exclusive”
                                • Figure 4: Agreement with statements about luxury, May 2019
                              • Wanted, but not needed
                              • Identifying the Luxury Consumer

                                • Consumer Profile: Affluent/High Net Worth Consumers
                                  • Wealthier consumers skew older and White
                                    • Engagement with luxury brands is relatively low
                                        • Figure 5: Affluent/High net worth consumer profile infographic, May 2019
                                      • Current luxury market represents about one third of consumers
                                          • Figure 6: Past two-year luxury brand purchase, total vs more affluent consumers, May 2019
                                          • Figure 7: Past two-year luxury brand purchase, any brand, May 2019
                                        • Consumer Profile: Luxury Brand Buyers
                                          • Luxury buyers skew younger and male
                                            • Brand overlap
                                                • Figure 8: Luxury brand buyers consumer profile infographic, May 2019
                                            • Luxury Trends – What You Need to Know

                                              • Gucci and Louis Vuitton are where it’s at
                                                • Chanel may need to join the 21st century
                                                  • Hermès means more for those in the know
                                                    • Luxury brands make changes to help the Hungry Planet
                                                    • Key Players and Perceptions

                                                      • Financial performance of the luxury giants
                                                        • Louis Vuitton
                                                          • Gucci
                                                            • Chanel
                                                              • Luxury is a global industry. Eyes are turning to Asia
                                                                • Luxury brand perceptions
                                                                    • Figure 9: Luxury brand ratings, among general adult population, May 2019
                                                                  • Gucci and Louis Vuitton lead the perception pack
                                                                    • Figure 10: Gucci digital creatives, desktop display, 2019
                                                                    • Figure 11: Louis Vuitton digital creatives, desktop video, 2019
                                                                  • Chanel and Dior lack edge
                                                                    • Figure 12: Chanel digital creatives, desktop display, 2019
                                                                    • Figure 13: Christian Dior digital creatives, desktop display, 2019
                                                                  • For most consumers, Hermès and Burberry lack clear identities
                                                                    • Figure 14: Hermès digital creatives, desktop display, 2019
                                                                    • Figure 15: Burberry digital creatives, desktop display, 2019
                                                                  • Hermès resonates better with more affluent consumers
                                                                    • Figure 16: Hermès brand ratings, among total and more affluent consumers, May 2019
                                                                • Mintel Trends to Watch

                                                                    • Figure 17: Reasons to pay more for products or services, May 2019
                                                                  • Total Wellbeing
                                                                    • Affluent consumers more willing to pay for healthful options
                                                                      • Young women are driving health-related consumption
                                                                        • Figure 18: Percentage who typically pay more for health-related reasons, by age and gender, May 2019
                                                                      • Case study: Lululemon expands
                                                                        • Figure 19: Yoga studio at Lululemon’s Lincoln Park, Chicago location, July 2019
                                                                      • FSTR HYPR
                                                                        • Time can be a luxury
                                                                          • Affluent consumers more likely to spend on time-saving
                                                                            • Gen X men are most willing to shell out for saved time
                                                                              • Figure 20: Percentage who typically pay more to save time, by age and gender, May 2019
                                                                            • Case study: Uber Copter takes off
                                                                              • Make It Mine
                                                                                • Figure 21: Preference for standing out or fitting in, by generation, March 2019
                                                                                • Figure 22: Percentage who typically pay more for customization, by age and gender, May 2019
                                                                              • Case study: Luxury monograms
                                                                                • Figure 23: Items from Louis Vuitton’s Mon Monogram collection, July 2019
                                                                                • Figure 24: Items from Gucci’s DIY collection, July 2019
                                                                              • Hungry Planet
                                                                                • One quarter of consumers are willing to pay more for earth-friendly products
                                                                                  • Figure 25: Percentage who typically pay more for earth-friendly products, by age and gender, May 2019
                                                                                • Case study: Burberry makes promises
                                                                                • What’s In?

                                                                                  • Hip-hop culture
                                                                                    • Namedropping
                                                                                      • Streetwear and sneakers
                                                                                        • Innovative thinkers
                                                                                          • LV stays hip by tapping Virgil Abloh
                                                                                            • Figure 26: Louis Vuitton digital creatives, Facebook carousel post, 2019
                                                                                          • Gucci looks to the future
                                                                                          • What’s Out?

                                                                                            • Inadvertent racism
                                                                                              • Figure 27: Screenshot image of controversial balaclava knit top on Gucci’s ecommerce site, February 2019
                                                                                            • Outdated legacy brands
                                                                                              • Chanel: Luxury online holdout
                                                                                                • Hermès pins hopes to fanny packs and skateboards
                                                                                                  • Figure 28: Hermès fanny pack and skateboard, published in The Wall Street Journal, April 2019
                                                                                                  • Figure 29: Hermès digital creative promoting opening of Meatpacking District store, April 2019
                                                                                              • What’s Next?

                                                                                                • Innovative fiber start-ups will help luxury brands go green
                                                                                                  • Case study: Atlantic Leather
                                                                                                    • Figure 30: Images of fish leather, July 2019
                                                                                                  • Step aside, supermodels; K-pop stars are gaining influence.
                                                                                                    • Figure 31: Getonswag’s Instagram posts with images of K-pop fashions, July 2019
                                                                                                  • Start-ups challenge luxury leaders in the bag space
                                                                                                    • Figure 32: Maestra bag from Senreve, July 2019
                                                                                                • The Consumer – What You Need to Know

                                                                                                  • Younger consumers value brand names
                                                                                                    • Accessories could be gateways to luxury
                                                                                                      • Millennials spend on services
                                                                                                        • Brands should prioritize advertising media based on demographics
                                                                                                        • Spending Motivations

                                                                                                          • Cost must equal value
                                                                                                            • One third of consumers may not even consider luxury goods
                                                                                                              • Younger consumers rely on brands to indicate quality and prestige
                                                                                                                • Figure 33: Attitudes toward brands and luxury, among total and affluent consumers, May 2019
                                                                                                                • Figure 34: Attitudes toward brands and luxury, by generation, May 2019
                                                                                                              • Male consumers want recognizably expensive brands
                                                                                                                • Female consumers prefer to pay less for the illusion of luxury
                                                                                                                  • Figure 35: Attitudes toward brands and luxury, by gender, May 2019
                                                                                                              • Pricing for Apparel and Accessories

                                                                                                                  • Apparel
                                                                                                                    • More affluent consumers may be more open to designer dresses and suits
                                                                                                                      • Figure 36: Designer dresses, Nordstrom, July 2019
                                                                                                                      • Figure 37: Price women usually pay and are willing to pay for a dress, May 2019
                                                                                                                      • Figure 38: men's designer suits and sport coats, Nordstrom, July 2019
                                                                                                                      • Figure 39: Price men usually pay and are willing to pay for a suit, May 2019
                                                                                                                    • Cultural spotlight: Tiffany Haddish’s white dress
                                                                                                                      • Figure 40: Photos of Tiffany Haddish wearing Alexander McQueen dress, 2018
                                                                                                                    • Accessories
                                                                                                                      • Bags, earrings and sunglasses always fit
                                                                                                                        • Figure 41: Gucci dresses size guide, July 2019
                                                                                                                      • More affluent consumers make better targets for some accessories
                                                                                                                        • Sunglasses and shoes
                                                                                                                          • Figure 42: Louis Vuitton women’s pumps and men’s sunglasses, July 2019
                                                                                                                          • Figure 43: Price consumers usually pay and are willing to pay dress shoes and sunglasses, May 2019
                                                                                                                        • Wristwatches and fine jewelry
                                                                                                                          • Figure 44: Designer women’s earrings and men’s watches, Nordstrom, July 2019
                                                                                                                          • Figure 45: Price consumers usually pay and are willing to pay for jewelry and watches, May 2019
                                                                                                                        • Top price points for bags are nearly universal
                                                                                                                          • Figure 46: Price consumers usually pay and are willing to pay for personal bags, May 2019
                                                                                                                        • Case study: The Hermès Birkin bag
                                                                                                                          • Figure 47: Privé Porter Instagram posts with images of Hermès bags, July 2019
                                                                                                                        • Male consumers say they are willing to spend more
                                                                                                                          • Figure 48: Highest price consumers are willing to pay for specific accessories, by gender, May 2019
                                                                                                                      • Lifestyle Services

                                                                                                                          • Half of all consumers treat themselves to a service or membership
                                                                                                                              • Figure 49: Services consumers pay for regularly, among total consumers, May 2019
                                                                                                                            • Men are more likely to pay for convenience and exclusivity
                                                                                                                              • Figure 50: Services consumers pay for regularly, by gender, May 2019
                                                                                                                            • Younger consumers spend on services
                                                                                                                              • Grocery delivery
                                                                                                                                • Nail/waxing services
                                                                                                                                  • Self-care
                                                                                                                                    • Figure 51: Services consumers pay for regularly, by generation, May 2019
                                                                                                                                  • Case study: Ezza Nails
                                                                                                                                    • Figure 52: Ezza Nails, Chicago, 2018
                                                                                                                                • Reaching Luxury Consumers

                                                                                                                                    • Magazine ads are a best bet for reaching older and affluent consumers
                                                                                                                                        • Figure 53: Sources of fashion information, among total and more affluent consumers, May 2019
                                                                                                                                        • Figure 54: Print sources of fashion information, by generation, May 2019
                                                                                                                                      • Good old fashioned word of mouth is still effective
                                                                                                                                        • TV ads are important for reaching men
                                                                                                                                            • Figure 55: Sources of fashion information, by age and gender, May 2019
                                                                                                                                          • Case study: Faces of Christian Dior’s fragrances
                                                                                                                                              • Figure 56: Christian Dior digital creative for Joy fragrance, desktop video, 2019
                                                                                                                                              • Figure 57: Christian Dior digital creative for J’adore fragrance, desktop video, 2019
                                                                                                                                            • Female consumers more engaged with fashion-related information
                                                                                                                                                • Figure 58: Sources of fashion information, by gender, May 2019
                                                                                                                                              • Younger consumers more likely to learn about fashion from social media
                                                                                                                                                  • Figure 59: Social media sources of fashion information, by generation, May 2019
                                                                                                                                                • Chanel challenges Gucci’s social spend
                                                                                                                                                    • Figure 60: Digital spend by Mintel-tested luxury brands, January-June 2019
                                                                                                                                                    • Figure 61: Share of social impressions among Mintel-tested luxury brands, January-June 2019
                                                                                                                                                  • Outdoor advertising reaches younger generations better
                                                                                                                                                      • Figure 62: Outdoor media sources of fashion information, by generation, May 2019
                                                                                                                                                  • Appendix – Data Sources and Abbreviations

                                                                                                                                                    • Data sources
                                                                                                                                                      • Consumer survey data
                                                                                                                                                        • Consumer qualitative research
                                                                                                                                                          • Abbreviations and terms
                                                                                                                                                            • Abbreviations
                                                                                                                                                            • Appendix – Key Players

                                                                                                                                                                • Figure 63: Luxury brand ratings, among more affluent consumers, May 2019
                                                                                                                                                                • Figure 64: Luxury brand ratings, among luxury brand buyers, May 2019
                                                                                                                                                            • Appendix – The Consumer

                                                                                                                                                                • Figure 65: Price consumers usually pay for clothing items, May 2019
                                                                                                                                                                • Figure 66: Highest price consumers are willing to pay for clothing items, May 2019
                                                                                                                                                                • Figure 67: Price consumers usually pay for accessories, May 2019
                                                                                                                                                                • Figure 68: Highest price consumers are willing to pay for accessories, May 2019
                                                                                                                                                                • Figure 69: Price more affluent consumers usually pay for clothing items, May 2019
                                                                                                                                                                • Figure 70: Highest price more affluent consumers are willing to pay for clothing items, May 2019
                                                                                                                                                                • Figure 71: Price more affluent consumers usually pay for accessories, May 2019
                                                                                                                                                                • Figure 72: Highest price more affluent consumers are willing to pay for accessories, May 2019

                                                                                                                                                            The Luxury Consumer - US - August 2019

                                                                                                                                                            £3,435.47 (Excl.Tax)