Where Is The "Breakthrough" Opportunity For Luxury Goods?

Global individuals
Luxury goods
The market has entered the "new normal" stage of low growth since 2015. The "bonus period" of the industry has ended, and the quality of the brand has been polarized.
Despite the first half of this year, Gucci (
Gucci
), Coach (
Cox Chi
Sales of brands and other brands have been slightly warmer, but most brands still have poor performance. The performance of brands such as Prada (Prada) and BottegaVeneta (Bao die Jia) continues to decline, closing stores has become the norm in the industry.
But at the same time, when luxury brand stores are closing up, brand collection stores and high-end experiential consumer markets have ushered in new opportunities.
Luxury market is in the doldrums
Since 2015, the annual compound growth rate of the luxury goods industry has dropped to -1%. Less than half (49%) of the brands still maintain growth momentum.
Recently, Bain consulting released a global luxury market research report, the report predicts that the global luxury market will enter a stagnation period, or has reached the lowest level since the global recession.
Bain consulting believes that the global personal luxury market has entered the "new normal" stage of low growth since 2015. The current "bonus period" of the industry has ended, and the quality of brand operation has been polarized.
The report shows that between 2009 and 2015, the annual compound growth rate of the personal luxury goods industry was 9%. During this period, 93% of the luxury brand income grew. But since 2015, the annual compound growth rate of the luxury goods industry has dropped to -1%, and less than half (49%) of the brands still maintain growth momentum.
In the global luxury market surveillance report jointly released by Bain consulting and Italy luxury industry association, the total consumption volume of global luxury goods for Chinese consumers has declined for the first time this year, while the global personal luxury market will decline to 1% euros, or 249 billion euros. This is also the first time that global luxury goods have been stagnant since the financial crisis.
The luxury goods industry has been in the doldrums, but it has not risen for a year or two. However, the news that luxury brands Gucci wants to rise frequently has attracted everyone's attention recently.
Beijing SKP Gucci store clerk told the China Commercial Daily reporter that at present, some Gucci products prices quietly rose in Europe, and individual products rose even to 10%.
But there is no price increase at home, which is a good time to start buying.
Reporters also visited Chanel (Chanel), Prada (Prada), Dior (Dior), LV (LV) and other brand stores, shop staff told reporters that the past two years did not appear in the situation of price increases.
At the same time, reporters also asked a number of luxury brand Chinese market staff, they said they did not follow Gucci's intention to price adjustment temporarily.
What is the reason for Gucci to raise prices and start shop? According to Gucci's latest financial report, after ending two consecutive years of decline in sales, the brand's profit in the first half of this year increased by 7%, and the two quarter's price earnings increased by 70%.
Insiders pointed out that the price rise of the brand is related to exchange rate changes on the one hand. On the other hand, the increase in sales volume should be the courage of its "willful" price increase.
Li En, editor in chief of fashion headlines, pointed out that the sales of luxury goods in China are still in a "stalemate" state, and the whole brand is not recovering, but some brands are recovering.
Li En predicted that it would be inevitable for a brand to rise in price, but most of the price adjustment was due to exchange rate changes, not because of the good performance.
In addition, some brands will reduce prices in order to stimulate consumption.
However, in the long run, Bain consulting is optimistic about the outlook for the luxury goods market. It expects that the luxury market will gradually resume growth in 2017.
Between 2017 and 2020 three, the personal luxury market will grow at a compound annual growth rate of 3% to 4%.
Bain consulting partner ClaudiaD Arpizio predicts that by 2020, the value of the personal luxury market will reach 280 billion to 285 billion euros (from 2017 to 3% to 4% of annual compound growth rate of sales revenue).
But she warned that the road ahead is not smooth. Luxury brands must adjust expectations and strategies if they want to grow.
Good business adjustment, multi-channel, customer centered brand will eventually become the real winner.
Luxury breakthrough opportunities
In the current environment of slowing economic growth, luxury stores that offer more and more choices will become the development trend of luxury goods industry in the future.
At present, the luxury goods market is still in a predicament, and has repeatedly been trapped in the "closed shop".
According to incomplete statistics of the first half of 2016 in the mainland of China, the six major brands such as Gucci and Burberry (Bo Baili) were close to ten. Last year and this year, LV closed nearly 6 stores.
In contrast, luxury stores are still opening stores.
According to the analysis of the industry, when the luxury brand store closes a lot, it is the opportunity for the store to break through.
As the largest department store in the Greater China area, it combines the fashion, design, art and music perfectly with the innovative store environment, and promotes personalized service of customer experience. Under the condition of general luxury goods, the market situation is slightly better.
Reporters visited Financial Street shopping center, found that compared with LV, Gucci, Dior, these big shops, the popularity of Lane Crawford shop appears more vigorous.
A shop assistant told reporters that Lian Crawford adopted a buying system. Some of the styles were bought by buyers in Europe, and domestic brand stores were hard to see.
Insiders pointed out that the collection shop sent buyers to purchase luxury goods on their own, which could better consider the needs of the local market, control the rhythm of new products on their own, and some new goods might be earlier than the stores.
It can also provide customized services for guests and purchase according to the requirements of guests.
This is more popular than brand stores.
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At the same time, according to the reporter, in the past year, in addition to the expansion of brand collection shops in Beijing and Shanghai, Chengdu, Hangzhou, Guangzhou and other second tier cities also have continuous collection shops.
Recently, luxury goods officially authorized the concept of tax-free shop ATTOS stationed in Guangzhou Libo, ATTOS opened a new store in the new store image, exploring the new realm of luxury, bringing more shopping experience to more high-end consumers.
Wu Yuqiang, chief brand officer of ATTOS, said: "because many big brands are saturated at present, they choose to close stores.
But their original customers are still here, so they will have the chance to become our consumers in the future.
Secondly, shopping malls need support from large luxury stores, and brands need an export to publicize, so brand collection stores are very popular with them, brand and department stores will support us.
Jiang Guohao, President of Cci Capital Ltd in Shangdu, Shanghai, admitted that under the current environment of slowing economic growth, luxury stores, which offer more preferences and have multiple choices, will become the development trend of luxury goods industry in the future.
In addition, when the growth of traditional luxury goods is almost stagnant, high-end experiential consumption represented by luxury travel, gourmet wine and art collections is rising rapidly.
Despite the downturn in the personal luxury market, from the broader luxury market, the 2016 autumn report of the global luxury market monitoring predicts that the luxury market with high-end experience, including cars, yachts and tourism, will reach 1 trillion and 80 billion euros in 2016, an increase of 4% over last year.
Among them, the luxury car market accounted for the highest proportion, reaching 4, the market size of 43 billion 800 million euros, and the luxury car market growth is the most significant, in 2016, an increase of 8%.
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