Retail & Distribution
14 February 2024
The luxury retail industry has remained resilient and continues to bounce back and reinvent itself. The industry is riding on new trends with cutting-edge technology to entice a younger clientele. Let’s take a closer look at the key luxury retail trends for the year ahead.
The luxury market is expected to grow by 2% to 4% in 2024, with regional and national variations, according to an analysis by McKinsey. Luxury retail is expected to reach at least 305 billion euros this year due to strong demand in Europe and the United States, while local consumption remains important in China. In addition, according to Statista, the most important sectors for the luxury industry in 2024 will be:
- The United States with a projected revenue of $126 billion.
- China with a projected revenue of $123 billion.
- Japan with a projected revenue of $22 billion
Luxury resale will boom in 2024 as more brands take control of their second-hand markets. The 1% will continue to buy luxury goods, but other classes may pull back. The personal luxury market is expected to grow 3%-8% over the next year, according to Bain & Company.
To learn more about the luxury trends 2024 download our ebook here :DOWNLOAD
1. Luxury Retail Trends 2024: More digital transformation
Many of the most coveted brands in the world have successfully negotiated the move towards digital transformation. With 20% of luxury goods sales coming from online by 2025* , brands are upping their digital game: offering added incentives for customers like personalised gift packaging in stores; or VIP access to private events. They’re also engaging more directly with customers via social media platforms like WhatsApp and Facebook Messenger.
Various luxury fashion brands are turning to state-of-the-art technology. Louis Vuitton unveiled a new online chatbot service at VivaTech in 2021, claiming that, thanks to artificial intelligence, over 60% of customer requests can be processed 24/7. Gucci offers customers access to online sales advisors, and Chanel has been developing a virtual fitting-room service in association with Farfetch.
Live-shopping, one of the biggest luxury retail trends, could account for around 20% of global e-commerce sales by 2026.
2. Live-streaming grows in popularity
In China, live-streaming has become so popular it’s almost an everyday lifestyle choice, with virtually all brands now on the Tmall marketplace. The luxury sector is no stranger to adopting the latest trends and organising live events. For instance, Lancôme, part of L’Oréal group, first launched Lancôme Happiness Nights in 2021 by offering an immersive journey live from its store on the Champs-Élysées in Paris. Dior gave its customers exclusive access to its July 2022 fashion shows and the chance to chat ‘live’ with make-up artists and get beauty tips. According to a study by McKinsey, live-shopping will account for around 20% of global e-commerce sales by 2026.
3. More direct selling and clienteling in luxury retail
Although it’s not exactly new, the trend for more mobile solutions being adopted in retail is likely to continue, making store staff even more autonomous and better at their role. The LVMH-owned German travel accessories brand, Rimowa, has armed its sales staff with mobile POS devices using the Cegid Retail solution in a bid to improve customer service and reduce waiting times in stores. The mobile POS technology allows staff to look up inventory, process returns and manage orders for store delivery, or delivery directly to people’s homes.
It also means having customer information at their fingertips, including recent purchase history or product preferences. With around 20% of transactions now carried out on the move, mobile POS gives access to a multitude of helpful tools (and data) that provide a personalised shopping experience to customers every time they visit a store.
4. Virtual reality and the Metaverse
Virtural reality and the Metaverse are two of the most recent luxury retail trends. Many luxury brands are exploring the new world, including Louis Vuitton, Fendi, Dolce & Gabbana, Gucci, Ralph Lauren, Burberry and Prada. Luis Vuitton has created outfits for the League of Legends video game characters that players can purchase. Dolce & Gabbana sold nine NFTs in the form of dresses, suits, tiaras and crowns in September for 1,885,719 Ether (a cryptocurrency), valued at over 6 million euros. And some brands are starting to accept cryptocurrencies as a form of payment .
“Luxury is at the forefront of this new world because they share similar values: rarity, exclusivity, high value items and the VIP dimension” says Eric Briones, Managing Director of the Journal du Luxe.
A November 2021 Morgan Stanley report estimates that NFTs and online gaming could account for 10% of the luxury market by 2030 and be worth over 50 billion in revenues. Web 3.0 offers new opportunities for brands by creating more playful and futuristic links to new generations. According to a study by GlobalData in 2022, Millennials and Gen Z are expected to be key drivers for luxury growth in the Asia-Pacific market over the coming years.
5. Luxury Retail Trends 2024: Second hand and CSR
The second-hand luxury market continues to grow and was worth 33 billion euros in 2021, up 65% since 2017. According to a study by the Boston Consulting Group, 70% of second-hand buyers make their first luxury purchase through vintage products. The second-hand market could account for up to 20% of a luxury brand’s revenue by 2030, according to Bain & Company.
Nonetheless, luxury brands have been slow to embrace the second-hand market, apart from a few tentative steps (notably in watchmaking). Gucci designer Alessandro Michele reimagined an online concept store offering vintage pieces for its 100th anniversary during Milan Fashion Week 2021.
Yet blockchain technology offers several advantages, such as better traceability throughout a product’s life cycle and proof of authenticity for second-hand buyers. It also helps promote more responsible and sustainable sourcing – something that most luxury brands have been striving towards for years. For example, Kering promises to achieve carbon neutrality by 2050; and Chanel has its ‘Mission 1, degree 5’ programme to reduce greenhouse gas emissions.
According to BrandZ’s CSR Top 100 ratings for 2021, the leading luxury brands (Louis Vuitton, Chanel, Hermès, Gucci, Rolex, Dior, Cartier, Saint-Laurent, Prada, Burberry) improved their CSR ratings by 5 points over 2020, up to 114 in 2021.
Cegid supports hundreds of luxury brands worldwide
Cegid continues to support luxury and specialty retailers in their omnichannel and digital transformation initiatives. Cegid Retail is a global POS and unified commerce platform helping retailers to sell, serve and fulfil anytime, anywhere. Over 85,000 stores are equipped with Cegid Retail in 75 countries, including Longchamp, Lacoste, Furla, , Barbour, L’Oréal, Almaki Group, Jacquemus, Orlebar Brown and Manolo Blahnik.
Retail Excellence for Luxury Experience
Unlock Cegid’s latest luxury report and discover 4 key steps to delivering the ultimate luxury CX.DOWNLOAD