Why Luxury Companies Need to Pay Attention to the Newly Wealthy
Photo Credit: Silversea's Silver Cloud cruise ship. Expedition cruising was one of the big winners of 2018 according to one new luxury study. Silversea / Bruno Cazarini
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Just as a gold digger goes after an older mate with deep pockets, so the luxury market has traditionally kept a focus on the mature top 5 percent. But as the world of wealth evolves, companies need to broaden their horizons to consider the new and younger groups that are becoming eligible for elite status.
The year 2018 has been a good one for the luxury market, according to two new studies.
Bain & Company’s Luxury Study says the overall luxury market — encompassing both luxury goods and experiences — grew by 5 percent this year to an estimated $1.37 trillion globally. Meantime, Euromonitor International’s “Strategies to Win the High Net Worth Market” suggests massive growth in wealth in emerging and developing economies, which will have a strong impact on luxury spending over the next several years.
“Last year, we saw the global luxury market return to healthy growth, albeit at a more moderate pace than in the past,” said Bain’s Claudia D’Arpizio, the lead author of the first study. “That trend continues in 2018, reinforcing the ‘new normal’ we predicted, led by flourishing luxury demand from Chinese consumers, the continued rise of online channels, and increasing influence from younger generations of consumers.”
Travel is fueling that growth. In
