MILAN – A tumultuous series of geopolitical events has slowed global sales in the luxury goods sector, according to a study presented Tuesday, while deeper, longer-term trends in the sector are being shaped by social media.
An annual study by Bain & Co. consultancy indicates sales of designer apparel, leather goods and jewelry are expected to increase 2 per cent this year to 223 billion euros ($282 billion) compared with 3 per cent growth in 2013 and 10 per cent in 2012.
The crisis in Ukraine, demonstrations in Hong Kong, a military coup in Thailand along with record cold in North America and declining consumer confidence in Europe all have slowed the pace of luxury goods purchases, said senior partner Claudia D’Arpizio.
“Luxury consumption depends not only on personal wealth, micro- and macroeconomic environment but also the overall consumer confidence, so all of these dangerous events have had a strong impact,” D’Arpizio said.
Chinese consumers retain their place as the biggest collective spenders, responsible for nearly one-third of global luxury goods spending, although growth there was slowing amid anti-corruption measures by the government and a weaker economy.
Over the longer-term, the immediacy of social media in diffusing trends straight from the runways is putting pressure on brands to get their goods to consumers more quickly, D’Arpizio said.
“This is important because once fashion weeks were events catering to the industry and special press, but the wider public wasn’t fully aware what was happening,” she said. That has changed with brand loyalists, bloggers and journalists posting highlights directly after the shows, meaning “more and more, they will not be able to wait one year for trends to make it to the stores,” D’Arpizio said.
Moschino is an example of a brand getting ahead of the shift, by offering in stores during fashion week a sampling of the items it was previewing.