Luxury Market Slowdown: Can Brands Adapt to Evolving Consumer Behaviors?

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Luxury Market,Slowdown,Consumer Behavior

The luxury market faces its first slowdown in recent years, yet some brands are thriving. A new report highlights the importance of continuous investment in desirability to outperform in this evolving landscape.

The luxury market, known for resilience, is experiencing its first slowdown in recent years. In the first half of 2024, 42 percent of publicly listed companies reported negative growth, with revenue dipping 0.4 percent. This follows a period of double-digit annual growth since 2020. However, a select group of luxury brands are thriving, achieving double-digit growth.

A new global report from Accenture titled 'Staud's Sarah Staudinger Revealed as Buyer of Carolyn Bessette-Kennedy's Collection at Sotheby's' surveyed 500 C-suite executives from luxury brands across Europe, the Americas, Japan, India, and China. The report found that luxury brands continuously and holistically investing in building and maintaining high desirability outperform financially. These companies enjoy a 2.3 percentage point higher revenue growth rate and a projected 6.6 percentage point operating margin growth advantage over the next three years. Despite this, maintaining the top spot is challenging due to evolving luxury shopper behaviors. Only 35 percent of survey respondents are satisfied with their company's current performance. Keeping up with the customer proves difficult, as 83 percent of luxury executives believe customers are changing faster than businesses can adapt. Additionally, luxury consumers are not a homogenous group, with 82 percent noting that the values and behaviors of emerging customers frequently differ from existing ones

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