Eric de Bettignies’ Post

 2024 is not likely to be a great year for luxury brands. The market for global luxury products such as Gucci, Louis Vuitton, and Burberry is on track for an annual 2 percent drop. That would make this the worst year since the global financial crisis back in 2008, excluding the year of the pandemic lockdown. According to Bain & Company’s Annual Luxury Report, demand is lackluster due to global unease and changing tastes within a specific age group... Gen Z.

The post-pandemic luxury market was booming. Now, with slowing sales in China, the likes of Burberry, Gucci and LVMH experiencing struggling profits and aspirational consumers being priced out, the way forward for luxury brands is uncertain. Global Chief Strategy Officer Manfredi Ricca shared with City AM how short-term discounts to boost profits are not effective and lower the value of the brand long-term. Instead, brands must make a choice: reduce prices and open purchase opportunities to aspirational consumers, or fight to become an ultra-premium brand. Read more in the full article below ↓ https://lnkd.in/e4tnGpSF #LuxuryBrands #Luxury #BrandValue

Luxury Brands: Price Strategies in the Chinese Market Global pricing strategies are fascinating, but how do luxury brands set their prices in markets with high import taxes, such as China? Marcio A. Porcher posed this intriguing question in response to my last post, and I couldn't resist to investigate further. The chart below unveils the price hikes for identical assortments across all categories for the mentioned luxury brands compared to their home markets. To my surprise, CELINE leads the pack with a staggering 28% price increase in China compared to France. Hot on its heels, Hermès and Louis Vuitton share second place with a 23% hike, closely followed by Burberry at 22%. The average increase across all selected brands stands at 20%, aligning with the increases seen in BALENCIAGA, Brunello Cucinelli, and Saint Laurent. On the other end of the spectrum, Jimmy Choo and CHANEL show the most restraint, with price increases of just 13% and 9%, respectively. Which of these luxury giants caught you off guard?

The post-pandemic luxury market was unstoppable. Record profits driven by China’s reopening and the revenge-on-lockdown ‘urge to splurge’ sent profits at all the major luxury brands to unbelievable highs. Briefly, it looked as though the upswing was going to stick, with pundits – and papers – asking if it would ever end. Now, results season has put a string of high-profile downturns in the news: profits at Burberry, Gucci and LVMH have all struggled to reach anything like their 2022 and 2023 highs. Continue reading 👇 https://lnkd.in/e4tnGpSF

I am not sure we can take this headline as factual. First of all, it should be stated that this article covers only luxury apparel and accessories, defined to include only branded clothing, leather goods, watches and jewelry. It leaves out other luxury goods categories that are much larger and equally, or more, important to HNW, UHNW, Affluent consumers such as luxury automobiles, luxury home goods and the highly important and competitive luxury travel and hospitality market, broadly defined to include high end restaurants. In those other categories there is no clear dominance and there are several great brands that have significant market shares along with a very long tail of niche brands. There are dozens of categories in other luxury goods, and especially services, never covered by the media. Now back to the categories covered by this article. It is impossible to cover true volume vs value market shares because no one is willing to partake. Years ago one of the groups asked The Luxury Institute, LLC to be the market share aggregator, but it was like herding cats. And in luxury jewelry, for example, the branded share vs the unbranded share is an issue. Without data, the best we can say is some luxury goods brands clearly are doing phenomenally better. Phenomenally! And that’s great, but not a winner-take-all phase in all of luxury. Not even close.

What's next for luxury? The industry continued to be polarised in the first quarter, says Luca Solca, managing director of luxury goods at Bernstein. “High-end brands are doing better (Hermès, Brunello Cucinelli), as well as brands with strong momentum (Moncler, Miu Miu). Brands with high exposure to middle-class consumers are the polar opposite of that (Gucci, Burberry). Mega-brands (Louis Vuitton, Cartier) are somewhere in between.” After a challenging end to the year, #luxury’s slowdown continued in the first quarter as challenges persisted for many in China. While there were success stories, some brands — especially those with a more aspirational customer — are battening down the hatches. Here, #VogueBusiness recaps Q1.

The luxury sector is currently at a crossroads, facing a myriad of challenges that are reshaping its future. From leadership changes to evolving consumer behaviors, several key trends are emerging that are leaving many people asking what's happening with Gucci, Burberry, and other luxury brands? Our latest blog explores these trends in more detail, supported by recent stories from the industry. Read it now: https://loom.ly/vYfd8vk

Luxury brands like Gucci, Prada, and Vivienne Westwood are embracing discounted outlets to capture today’s value-conscious shopper. ✅ Outlets offer deep discounts (up to 65%) on designer goods, attracting bargain-hunters amid softening global luxury sales. ✅ Malls like Belmont Park Village and Woodbury Common Premium Outlets are expanding with new stores, restaurants, and luxury experiences. ✅ Brands once resistant to discounting now see outlets as a solution for surplus inventory, especially with EU bans on destroying unsold stock. Outlets are now a win-win. Would you drive a little farther for a 65% off pair of luxury shoes? Full story in the comments below. Source: WSJ

🌟Luxury brands evoke desirability through product rarity and exclusivity. 🔺 Rarity denotes the limited availability of products. For instance, limited-edition releases by brands to maintain scarcity. ✨ While, luxury exclusivity strategy focuses on restricting accessibility by setting higher barriers.  For instance, classic luxury brands such as Louis Vuitton and Chanel have been known for VIP invitation-only events; one-to-one appointments in VIP rooms for patrons or exclusive membership programs. 🔯 Rarity creates VALUE while abundance often dilutes the perception of value. Hermès Birkin bags are highly desirable due to natural rarity as they are handmade with high-quality rare raw materials including ostrich and crocodile skin. Brands can also create artificial shortages or tactical rarity by releasing limited editions to enhance perceptions of rareness and evoke urge to purchase. For instance, Nike limits the production of certain iconic sneakers (often in collaboration with a superstar) so well that they have become collectible items that are in high demand. 💡 Maintaining true sense of exclusivity and rarity are two key pillars to manage luxury brands. Your thoughts? #luxury #brands #strategies #exclusivity #rarity #luxeanalytics

Luxury Goods Market Shows Strong Growth Prospects with Key Players Including Revlon, Rolex, and Kering The luxury goods market, renowned for its exceptional quality and prestige, continues to demonstrate resilience amidst economic fluctuations. Catering primarily to affluent consumers, luxury goods encompass a wide array of products, ranging from fashion and accessories to automobiles and experiences. These items are distinguished by their craftsmanship, heritage, and exclusivity, commanding premium prices due to their unique designs and superior materials. Leading luxury brands such as Revlon, Rolex, and Kering strategically cultivate desirability through various means, including storytelling, limited editions, and collaborations, thus fostering emotional connections with their clientele. Despite challenges, such as evolving consumer preferences and ethical considerations, the luxury market remains buoyant, driven by factors such as growing affluence and emerging markets. According to a recent market research report, the global luxury goods market is projected to grow at a significant compound annual growth rate (CAGR) of +6.8% during... https://lnkd.in/dYjT3AEC