Weâ€™ve heard of democratic luxury and the luxury of simplicity. And we all know what the greatest luxury of them all is: time.
But enough of the theory. Luxury, in the truest sense of the word, is more alive than ever and continues to go from strength to strength.
The market is fuelling consumption, boosting employment and supporting the economic growth of entire nations, most of all Italy.
The luxury market once again proved itself to be dynamic and agile in 2018. While in 2017 the sector registered turnover of over â‚¬900,000, a study produced by Altagamma and the Boston Consulting Group has now found that the market will be worth â‚¬1.3 billion by 2024.
The situation looks promising, to say the least.
Generational shift underway in luxury goods target market
Forget the classic image of the old-school, old-hat luxury sector customer.
The new wave of luxury customers are 35 years old at the most and belong to the most fascinating generation of them all: millennials.
Millennials never fail to surprise us â€“ theyâ€™re super connected, they have their eyes open to everything new, theyâ€™re multitasking experts, theyâ€™re receptive to new cultural influences and â€“ above all â€“ theyâ€™re extremely curious. But what millennials also have is incredible purchasing power, despite having grown up during one of the biggest economic crises of modern history.
Millennials are showing a penchant for luxury goods and have genuine intention to buy, which is boosting the consumption prospects of the entire industry: according to estimates, this group alone will be responsible for 50% of all luxury goods purchases.
But who is going to be accounting for the other slice of the pie?
China: the future of the luxury industry
China â€“ with its huge consumer numbers â€“ is the most promising global market for the luxury market bar none. It is a sector with huge potential and is expected to represent 40% of the entire luxury market within six years.
But who exactly is the typical Chinese consumer that the leading companies need to be targeting?
In a few words, theyâ€™re young â€“ under the age of 35 â€“ and tend to live in urban settings, particularly big cities. They wonâ€™t necessarily come from rich families, but they will have experienced economic improvement that has seen them enter the world of luxury for the first time. Like all good fashionistas, perhaps they will use social media â€“ Instagram in particular â€“ to draw inspiration from the hottest influencers of the moment and keep their finger on the pulse of the latest trends.
Which products are they interested in? Mainly street fashion such as top-quality sweatshirts, t-shirts and sneakers. These products are bought by three out of every four customers, with sales up over 5% compared to 2016.
Future challenges: tradition and innovation
Companies operating in the luxury sector must be able to compete on two key aspects.
From one side, they must take advantage of traditional values such as craftsmanship and quality, both of which are seen as increasingly important by the new target market.
But at the same time, itâ€™s vital that companies show that theyâ€™re in step with the digital economy. A growing number of purchases are made over the internet, and although many luxury companies have great history and heritage behind them, they can ill afford to overlook the vital area of online shopping.
If they do, they can expect to miss out on a hefty chunk of revenue. Online shopping now accounts for 10% of the sectorâ€™s overall value â€“ but that could reach 25% in the space of just eight years.
In other words, one out of every four purchases will be made online: a truly unmissable opportunity.