For decades, it seemed, the most avid patrons of exclusive boutiques around the world sprang from a predictable, almost monolithic, caste of global elites: Prominent men and women of the baby-boom generation, who traveled extensively — and at a high standard — for both business and leisure, and whose appreciation of the quality and heritage of top luxury brands had been cultivated across generations.
But in recent years, this reliable core of the luxury consumer base has become a shrinking force in the global marketplace as the newly wealthy economies of China, India, Brazil and Southeast Asia have churned out young buyers with a hunger for markers of status and sophistication. Last year, more than 330 million people consumed luxury products worldwide, representing 217 billion euros, or about $270 billion, according to Bain & Company, a Boston-based consulting firm. Of those consumers, around 150 million are considered to be “true luxury” buyers, who consistently spend an average of €1,250, or about $1,560, a year on products such as perfume, fashion and fine jewelry.
“We are in the midst of a generational shift,” said Claudia d’Arpizio, who specializes in luxury goods as a partner with Bain in Milan. “Today’s luxury consumers are a very diverse crowd, representing many different segments of people.”
That crowd is only going to get larger and more heterogeneous — both geographically and demographically, analysts say. By the end of this decade, the global luxury consumer base will probably reach 400 million people, according to Bain, and climb to 500 million by 2030. Most of that growth will be fueled by steady economic growth in emerging markets, particularly in Asia, as well as the proliferation of digital and mobile technologies that enable consumers and brands to connect with one another in new and different ways.
It is a development that has added enormous complexity to the customer relationship, but also creates competitive opportunities for brands that are prepared to adapt to this new landscape, luxury analysts say.
“The population of high-net-worth individuals is going to expand globally,” said Doug Gollan, editor of the magazine Elite Traveler. “The big question is, how deep into the pockets of these super-rich people are the luxury brands going to be able to get?”
The key, Mr. Gollan and others say, may be in better harnessing the smartphones and other digital devices that are already nestled in these consumers’ silk-lined pockets and crocodile handbags.
Read more at The New York Times.