Competitor Strategies in Luxury Goods

Key Findings

Luxury players continue to grapple with pressure on discretionary spending and slow global growth

In 2024, the luxury goods sector maintained its recovery trajectory, recording a 4% year-on-year increase, largely driven by the Asia Pacific and North America. However, the impact of sluggish global economic growth and elevated inflation rates, alongside rising capital costs, trade disputes, geopolitical tensions, climate change, and deglobalization, is taking its toll on spendin

Luxury players turn their attention to emerging markets, while navigating challenging conditions

Emerging markets are increasingly becoming prime targets for industry expansion, driven by growing populations and rising affluence. Luxury brands are concentrating on these regions to attract new consumers, cater to diverse cultural tastes, and leverage substantial growth opportunities in areas such as Latin America, the Middle East and Africa, and Asia Pacific.

Shifting consumer mindsets benefit companies that promote the wellbeing of individuals and the planet

Shifts in consumer attitudes are leading luxury shoppers to favor brands that prioritize the wellbeing of people and the planet. Increasingly, consumers are attracted to brands that align with their personal values and prioritize sustainability over profit. This trend is crucial for appealing to high-income consumers and mitigating reputational risks

Competitors leverage the “lifestyle” category to enrich customer experience and foster brand engagement

Affluent consumers are increasingly viewing luxury goods as investments in their personal growth, prioritizing meaningful and authentic experiences for a more fulfilling life. This shift provides a competitive edge for luxury brands to differentiate themselves by expanding into hospitality and wellness experiences that deepen customer loyalty and enhance brand prestige

Generative AI disrupts the competitive landscape, significantly impacting both consumers and operations

With the increasing adoption of GenAI applications by consumers, luxury brands are discovering new opportunities to optimize design processes and enhance creativity. GenAI holds the promise of transforming the industry towards a more sustainable future, predicting consumer preferences, and driving innovation across the entire value chain and customer journey.

This report comes in PPT.

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