While many people are struggling to absorb the price increases brought on by rampant inflation, a separate sector of society is focused on plunking down big bucks on luxury goods.
A new report shed some light on the factors involved in the luxury sector’s recent growth.
Market shifts toward younger buyers
As researchers determined, the customer base for high-end brands is more diverse than ever before, as is the range of products that people are willing to spend their money to purchase.
Here are a few of the most interesting takeaways from the report:
- The sale of personal luxury items — think apparel, jewelry, shoes, etc. — is on course to rise by a whopping 22% this year.
- Luxury sales are set to hit $367 billion this year, but experts think that number will top $550 billion within five years.
- Recession fears do not appear to be taking the same toll on luxury consumption that the 2009 downturn did.
- Consumers in their mid-20s to early 40s account for roughly half of all luxury purchases — and the even younger Generation Z makes up about another 20%.
Root causes for the spending spree
One reason the sector appears so resilient in today’s economic climate involves the fact that we’ve all gone through a period of pandemic-related restrictions during which it was more difficult to spend money. All of that demand is now boiling over and people with the means to do so are shopping at levels higher than any point on record.
Claudia D’Arpizio, one of the study’s authors, called it a “rebirth,” adding: “Some pockets of consumers that have been unlocked during COVID are here to stay and growing, like subcultures and ethnic groups in the U.S.”