+4% in 2017 for high end

China and Europe power the recovery. Clothing, accessories and beauty the most performant categories. The consumption of personal luxury products close to 259 billion euros. Source: Monitor Altagamma on World Markets, carried out by Bain & Company in cooperation with Altagamma. A summary.


After a difficult 2016, the year at hand shows positive signs for personal luxury goods, thanks to the recovery of European consumption, both local and touristic, and by Chinese citizens, at home and abroad. The American markets show a drop. Clothing, leather goods, footwear and accessories show growth, along with perfumes and cosmetics. The companies continue the challenge of the personalised and multi-channel engagement with the consumers. Prospects of an annual growth of 3-4% up to around 290 billion euros in 2020.
This is what emerges by the updates of the Monitor Altagamma studies on the world market, done by Bain & Company in cooperation with Altagamma, and  Altagamma Consensus 2017, drawn up since  2009 by Altagamma, with the contribution of the major specialised international analysts (of which we publish a summary).
According to the Monitor, the global market of high end personal goods in 22017 will reach 254 - 259 billion euros, with a constant growthrate of between 2% and 4%, mainly sustained by the recovery of the Chinese consumers both in their local markets as well as abroad and by the greater propensity to purchase in Europe.
The performance differential between high end brands continues to broaden, making it even more indispensable to review ones own growth strategy to adapt to the needs of the new class of “millennial - minded” consumers.

Trends 2017 per geographic area
- In America, the US market will continue to underperform, impacted by a strong currency, an uncertain political environment, and a negative trend in the department store channel.
- Europe is recovering from the decline in tourist flows in 2016 and local consumption is also increasing.
- The Chinese market is expected to grow, mainly due to increased local purchases, although Chinese tourists will continue to represent a significant portion of the overseas luxury market.
- Stable trend expected for Japan, a mature and slowing market, mainly supported by local consumption in the face of sharp decline in tourist flows.
- Difficult context for the market in the rest of Asia, which is expected to decline in late 2017, due to the decline in tourists, especially from China and Korea, despite a slow recovery of Hong Kong and Macao.
The study identifies the five major issues that will guide the evolution of the luxury goods market in the coming months: The US market trend, the rise in Chinese consumption both local and abroad, the constant growth of the digital channel, the increasingly high polarization of the high-end brands performance and the new wave of millennial consumers.
 
The future in 5 choices

The success of high-end brands in this context can be achieved through five key strategic choices:
- develop a strong 1:1 relationship with local consumers;
- promoting personalization of products, services and messages;
- develop a holistic distribution approach and completely rethink the “customer journey”;
- build a “story-living”, engaging in a stimulating conversation and offering more and more experiential content to ones consumers;
- handle all possible touch-points during the entire customer journey, by developing a 360° engagement plan .
According to the Monitor, the market will continue to grow at an average annual rate of 3-4%, reaching 280-290 billion euros in 2020.                                                                  

09/11/2017

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