With these results, the sector thus signs its first decline for more than a decade. Hit hard by the Covid-19 epidemic, the luxury goods sector was impacted on most of its product categories, including a -30% drop for the clothing and watchmaking segments. In this uncertain economic context, Bain & Company highlights the performance of entry price items, which represent more than half of the volumes sold this year. E-commerce and local consumption, factors of resilience. At the end of recent months marked by social distancing and containment measures, the share of online luxury goods purchases has literally jumped from 12% in 2019 to 23% in 2020, to €49 billion. “This spectacular increase is to the detriment of brick-and-mortar,” underlines the study, which predicts a “possible decline in shop networks in 2021. Faced with this situation, Bain & Company indicates that luxury brands will have to adapt to new purchasing typographies while changing the role of their shops towards a more customer experience and omnicanity. Beyond the hyper-acceleration of digital, the crisis should also consolidate certain emerging trends such as the increase in intra-frontier consumption. “Local consumption has increased in all channels, categories, generations and price levels,” says the study, which estimates the share of purchases made locally at 80 or even 85% for the year 2020. According to Bain & Company, this dynamic could continue in the months to come, with 65 to 70% becoming established on a long-term basis. The Chinese outsider. Although consequent, the fall in luxury goods in 2020 has been partly cushioned by a stronger than expected recovery in sales during the summer, particularly in China where the first signs of strength were felt as early as spring. As a result, luxury goods sales in mainland China increased by +45% this year, reaching 44 billion euros. “We have a two-speed world with Europe and the United States, on the one hand, strongly affected by the second wave and by social and political uncertainties, and China, on the other hand, whose economy is accelerating relentlessly day after day,” Federica Levato, partner at Bain & Company and co-author of the report, analyzed for Reuters. A recovery by 2021. According to the firm, luxury goods sales in the fourth quarter of 2020 could fall by -10%, a figure totally dependent on government restrictions that could mark the key holiday season. In the medium term, Bain & Company is counting on “various scenarios” for 2021, nevertheless posting optimistic estimates ranging from +10 to +19% “depending on macroeconomic conditions, the evolution of Covid-19, the recovery of international tourist flows and the resilience of local customers. “The experts estimate, however, that it will be necessary to wait until the end of 2022/early 2023 to return to 2019 levels. “Luxury brands have experienced a year of considerable change, but we believe that the industry will emerge from the crisis with more determination and dynamism than ever,” says Federica Levato. “By 2030, this industry will be radically transformed: we will no longer talk about the luxury industry, but about the market of the cultural and creative excellence of the insurgents,” she said, referring to the new generations of luxury consumers, who are attentive to the values of justice, eco-responsibility, inclusion, and diversity. According to Bain & Company, these young buyers should generate 180% of the sector’s growth over the period 2019 to 2025. “The winning brands will be those that build on their excellence while reinventing the future with an activist mindset. Luxury players will have to think boldly to rewrite the rules of the game. »
Online, the main channel for purchasing luxury goods by 2025. #1052020/23/11
The spring forecast was therefore correct. While the firm Bain & Company was expecting an overall drop of -20 to -35% in the sales of luxury goods by the end of 2020, the trend seems to be heading for a drop of -23% to 217 billion dollars.