Report Summary

Wealthy consumers comprise a large base of the luxury market, but a younger, less affluent and more diverse generation is emerging, requiring brands to be agile.

Brittany Steiger, Senior Analyst, US Retail and eCommerce Reports

Table of Contents

  1. Executive Summary

    • What you need to know
    • Consumer trends: key takeaways
    • Market predictions
    • Opportunities
  2. Market Dynamics

    • Market context
    • Market drivers
    • An improving economy could buoy the luxury consumer
    • Graph 1: consumer spending habits – cut backs on dining out/leisure, luxuries/non-essentials, 2023-24
    • Economic indicators trend positive
    • Graph 2: headline CPI, 2022-24
    • Graph 3: quarterly real GDP growth, 2020-23
    • Consumers are the most upbeat they have been in nearly three years
    • Graph 4: consumer sentiment index, 2021-24
    • Net wealth remains concentrated among older Americans
    • Graph 5: median net worth of consumers in US dollars (thousands), by age, 2019 and 2022
    • Long-standing income inequalities limit the spending power of Black and Hispanic consumers
    • Graph 6: median household income, by race and Hispanic origin, 2013-22
    • Graph 7: median household income, by race and Hispanic origin, 2022
    • Digital innovation enables a new era of personalization and connectivity
    • Market landscape
    • Global market for luxury goods enjoyed a post-pandemic surge
    • Americas region accounts for a quarter of global luxury sales
    • Graph 8: percentage analysis of sales by region, 2022
    • Luxury sales soften amid economic pressures
  3. Consumer Insights

    • Consumer fast facts
    • Affluent/HNW and luxury consumer profiles
    • The affluent/high-net-worth consumer
    • Affluent/High-Net-Worth consumers skew older and White
    • Not all luxury consumers are considered affluent
    • Graph 9: luxury shopper segments, by AHNW consumers vs general population, 2024
    • The new luxury shopper
    • Gen Z and Millennials are luxury shoppers
    • Aspirational luxury enthusiasts
    • Aspirational segment holds potential, but purchasing power is limited
    • The luxury consumer is diversifying
    • Meaning of luxury
    • "Luxury" can be both emotional and tangible
    • Graph 10: meaning of luxury, by AHNW consumers vs general population, 2024
    • In their own words: consumers describe what "luxury" means to them
    • Consumers explain the difference between luxury as an emotion and luxury as a price tag
    • Not everyone has experienced luxury, but most equate it with pleasure
    • Men are emotionally invested in the status of luxury
    • Graph 11: meaning of luxury, by gender, AHNW consumers vs general population, 2024
    • Younger generations bring a fresh point of view
    • Graph 12: meaning of luxury, by generation, 2024
    • Young affluents have especially high standards
    • Graph 13: meaning of luxury – among ages 18-44, by AHNW vs general population, 2024
    • Multicultural consumers seek unique, pleasurable and trend-forward luxury experiences
    • Graph 14: meaning of luxury, by race and Hispanic origin, 2024
    • Defining characteristics of luxury brands
    • Craftsmanship and exclusivity are hallmarks of luxury brands
    • Graph 15: what defines a luxury purchase, by AHNW consumers vs general population, 2024
    • Quality, exclusivity and designer labels became more important over the last decade
    • Graph 16: what defines a luxury purchase, general population, 2014 vs 2024
    • Quiet Luxury shifts focus toward timeless, high-quality pieces
    • Luxury brands tap into old money aesthetics
    • Affluent men are a key demographic for quiet luxury
    • Graph 17: what defines a luxury purchase, by gender, by AHNW consumers vs general population, 2024
    • There's still a case to be made for designer logos and "loud luxury"
    • Graph 18: Google search trends for "quiet luxury" and "loud luxury", 2024
    • Luxury brands position louder looks to resonate with youthful trends
    • Designer logos and limited-edition items appeal to the aspirational segment
    • Graph 19: what defines a luxury purchase, by luxury shopping history, 2024
    • Internet culture drives exclusivity and rarity
    • An era of hyper-personalization is dawning
    • Graph 20: what defines a luxury purchase – ability to customize, by generation, age and affluence, 2024
    • Attitudes toward luxury and luxury purchases
    • Consumers set the bar high for luxury brands
    • Graph 21: select attitudes toward luxury and luxury brands, by luxury and aspirational shoppers vs non-buyers, 2024
    • Graph 22: select attitudes toward luxury and luxury brands, by AHNW consumers vs general population, 2024
    • The gold standard of luxury
    • Tap into young consumers' need for exploration and self-expression
    • Graph 23: attitudes toward luxury and self-identity, by generation, 2024
    • Brand storytelling helps consumers shape their personal identity
    • Black and Hispanic consumers hold luxury in high esteem
    • Graph 24: select attitudes toward luxury and luxury brands, by race and Hispanic origin, 2024
    • Luxury products purchased
    • Personal luxury goods remain at the heart of the luxury market
    • Graph 25: luxury items purchased in the past two years, 2024
    • Affluent consumers favor big-ticket investment pieces
    • Graph 26: luxury items purchased in the past two years, by AHNW consumers vs general population, 2024
    • Collaborations and partnerships allow brands to expand into new markets
    • Men shop more categories, but women splurge on small luxuries
    • Graph 27: luxury items purchased in the past two years, by gender, 2024
    • Key men's and women's categories reflect evolving trends
    • Accessories make the outfit
    • Younger affluents prop up luxury purchases
    • Graph 28: luxury items purchased in the past two years, by age, AHNW vs general population, 2024
    • Look to broader generational trends to target young consumers across the wealth spectrum
    • Graph 29: luxury items purchased in the past two years, by generation, 2024
    • Multicultural consumers express themselves through fashion and beauty
    • Graph 30: select luxury purchases in the past two years, by race and Hispanic origin, 2024
    • Fashion has strong ties to Black culture
    • Hispanic consumers find self-expression with hairstyles and makeup
    • Luxury services and experiences
    • High-end experiences define the luxury lifestyle
    • Graph 31: luxury services and experiences in the past two years, by AHNW consumers vs general population, 2024
    • Consumers want to experience the finer things in life
    • In their own words: consumers most aspire to have luxury experiences
    • Age and lifestage play a role in luxury living
    • Graph 32: luxury services and experiences in the past two years, by age, 2024
    • Luxury dining offers a taste of the high life
    • Discovery and personalization help elevate the experience
    • Luxury travel has the potential to thrive as consumers re-prioritize experiences
    • Graph 33: participation in luxury travel in the past two years, by age, AHNW consumers vs general population, 2024
    • Appeal to affluent travelers' desire for exploration
    • Pelorus Travel satisifes a desire for adventure
    • Women seek luxury through self-care
    • Graph 34: spa treatments in the past two years, by age and gender, AHNW consumers vs general population, 2024
    • Gen Z and Millennials splurge on live entertainment
    • Brands mustn't overlook older consumers
    • Motivations for buying luxury goods and services
    • Consumers treat themselves to quality experiences
    • Graph 35: luxury purchase motivations, by AHNW consumers vs general population, 2024
    • Brands can tap into both practical and emotional drivers
    • Women buy luxury to treat themselves and boost wellbeing, while men want to feel confident and stand out from the crowd
    • Graph 36: luxury purchase motivations, by gender, 2024
    • Rolex sells a culture of excellence and distinction
    • A new luxury mindset is emerging
    • Graph 37: motivations for buying luxury goods/services, by age, AHNW consumers vs general population, 2024
    • Luxury brands must embrace inclusive storytelling
    • Graph 38: select luxury purchase motivations, by race and Hispanic origin, 2024
    • Collaborations bring in diverse perspectives
    • Barriers to buying luxury
    • Expense, lack of interest are primary barriers
    • Graph 39: barriers to luxury purchases, by AHNW worth consumers vs general population, 2024
    • Older consumers are the primary source of indifference
    • Graph 40: barriers to luxury purchases, by age, AHNW consumers vs general population, 2024
    • Aspirational consumers have the desire but not the purchasing power
    • Graph 41: reasons for not buying luxury, aspirational vs non-aspirational consumers, 2024
    • Cost is also a deterrent for multicultural consumers
    • Graph 42: reasons for not buying luxury, by race and Hispanic origin, 2024
    • The economics of luxury purchases
    • Inflation has stifled luxury spending
    • Shoppers are open to paying full price, but discounting helps
    • Graph 43: attitudes toward the price of luxury goods/services, by AHNW consumers vs general population, 2024
    • For some luxury shoppers, part of the thrill may be in chasing the deal
    • Graph 44: attitudes toward luxury and affordability, by AHNW consumers vs general population, 2024
    • Graph 45: attitudes toward luxury and affordability, by luxury shoppers vs non-buyers, 2024
    • Women are more budget-conscious shoppers
    • Graph 46: attitudes toward luxury spending, by gender, AHNW consumers vs general population, 2024
    • Brands need to explore new formats for value creation
    • Luxury brands find new ways to embrace value shoppers
    • The circular economy will keep booming
    • Mid-market department stores offer a strong middle ground for value-oriented shoppers
    • "Dupe" culture has a grip on Gen Z and Millennials
    • Graph 47: attitudes toward luxury look-a-likes, by key demographics, 2024
    • Brands must take action to combat counterfeit products
    • Sources of information
    • Social media is the prevailing source of influence
    • Graph 48: sources of information, by AHNW consumers vs general population, 2024
    • Communities are shifting online
    • A multi-faceted strategy is crucial to resonate with varying perspectives
    • Graph 49: sources of information, by generation, 2024
    • Create diverse and inclusive online communities
    • Graph 50: sources of information, by Race and Hispanic origin, 2024
    • Brand reputation and word of mouth carry weight with affluent consumers, but age is a major factor
    • Graph 51: sources of information, by age, AHNW consumers vs general population, 2024
    • Build deeper personal relationships with consumers
    • TV, streaming and film allows brands to get cinematic
  4. Innovation and Marketing Trends

    • Pharrell Williams breathes new life into Louis Vuitton's legacy
    • Storied Collection promotes memory-making adventures
    • A unique and personalized luxury travel experience
    • YaySay app finds the thrill in chasing luxury deals
    • Marketing and advertising
    • The Row heightens exclusivity by restricting social media coverage
    • Loro Piana embraces a sense of humor with Gstaad Guy
    • Brands use celebrity sightings to propel viral moments
    • Opportunities
  5. Appendix

    • Market definition
    • Consumer research methodology
    • Consumer qualitative research methodology
    • Generations
    • Abbreviations and terms
    • Global luxury market size and forecast
    • Breakdown of global market across region

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