In the first of a two-part series, here we will look at how luxury business professionals are positive about the outlook for the sector in 2019, while there also remain some significant challenges for the future, including socio-political unrest and a shrinking consumer spend.
The annual report measures how luxury business is standing in the USA, by surveying 600 luxury insiders from luxury goods services, experiences and companies that supply the segment, including those working in the beauty and fragrance categories.
Optimism for luxury is palpable
And according to the latest survey respondents’ optimism was palpable, specifically from companies that provide luxury goods and service experiences to luxury consumers.
Indeed, the survey results showed that 56% of luxury insiders believe business conditions are better now than a year ago, compared to 29% who shared the same feeling two years ago.
Likewise, the majority of those surveyed still believed that conditions would continue to improve for the sector a year from now, with 52% stating that they shared this belief.
Proof will be in product innovation
Those interviewed also revealed that they believed the proof of the growth would be reflected in the product innovation line for luxury consumer goods, which is likely to be highly robust throughout 2019.
However, the team at Unity Marketing also shared survey data indicating that insiders are most worried about political instability and shifting macro-economic trends that have been underpinned by trade wars with U.S. partners such as China.
In particular, the report notes that these trade wars have already impacted sales of luxury goods in China, while fewer tourist are also going to Paris in the face of the recent uprisings and protests, resulting in a lower spend on luxury goods in what is referred to as the luxury goods capital of the world.
Luxury is losing market value
All of this is having an impact on the global luxury segment, with the Savigny Luxury Index, compiling the stock values of the 18 biggest luxury goods companies, measuring a drop that put it lower at the end of 2019, than it had been in the beginning.
“Luxury brands will face a complicated balancing act in 2019 and beyond,” said Pamela N. Danziger, president of UnityMarketing.
In the second part of article, we will look at how the luxury market is being challenges by the digital revolution, growing anxiety amongst the wealth is forcing them to retreat away from being showy about their wealth and rising specter of the luxury segment becoming irrelevant.