Luxury trends in 2024: 20 figures that you need to know

This article has been updated in July 2024 by Sabrina KHADIVI.

The luxury marketing landscape has been changing consistently for the past decade and the evolution continues at a fast pace. As the average age of luxury consumers is decreasing, their shopping patterns are changing as well and, for the first time in decades, brands are finding it necessary to reexamine their strategies and adjust to what Millennials and Generation Z members expect from them.

At Hapticmedia, we are consistently writing about innovations and trends on our blog; however, in this piece, we decided to approach luxury marketing starting from the relevant figures.

No matter which sector it is, marketing is always based on data and we consider that the following 20 figures do an excellent job helping us get a better understanding of the luxury market:

The luxury industry

■ 2,5 trillion Euro is the value that the overall expenditure luxury market is expected to be in 2030. In 2023, the luxury market was evaluated at 1,3 trillion euros with an annual growth rate of 4% to 8%. Source: Long Live Luxury: Converge to Expand through Turbulence | Bain & Company

This is why luxury brands have been heavily investing in new marketing tools and strategies with which consumers resonate, including influencer marketing, online and conversational retail, AI, 3D and Big Data, collaboration with high-street brands and building a more personal brand-consumer relationship.

Some brands like IKKS have adopted new technologies like 3D configurators and augmented reality. We find their entire range of lighting fixtures which can be personalized and visualized thanks to this technology, the goal of 3D configurators is to allow consumers to be able to customize products while manipulating them online.

The luxury consumer

Demographics

■ The luxury customer base will expand to 450 million by 2025, up from 390 million in 2019, then 500 million by 2030 mainly thanks to the growing middle-class, especially from Asia. Source: Bain & Co.

■ 35% of luxury consumers are Chinese and their percentage is expected to grow to 40% by 2030. Source: 2023 China Luxury Goods Market: A Year of Recovery and Transition | Bain & Company.

In such a context, knowing what Chinese consumers want is crucial and understanding their appreciation for social commerce, live streaming, and key opinion leaders is something that marketers can’t miss.

Above are a few examples of live streaming campaigns on Taobao Live, an inbuilt feature of eCommerce platform Taobao including Tmall. In China, netizens appreciate live content so much that video-based social networks like Douyu, Huya, YY, Douyin and Taobao Live have become part of their daily lives.

■ Chinese customers account accounted for 90% of the global market growth in 2019, reaching 35% of the value of luxury goods sold in the world. Source : Global luxury goods market takes 2022 leap forward and remains poised for further growth despite economic turbulence | Bain & Company

Indeed, a new generation of Chinese consumers, that are new to luxury brands, will be funding the market in the following years and this offers brands both opportunities and challenges.

On one hand, luxury brands have a high array of tactics that may enable them to address these newer segments and introduce them to their values and commitments.

On the other hand, this means heritage houses have to pay close attention to what is happening, keep up with the trends, remain competitive and relevant. In such a fast paced and digitalized world governed by data and AI, luxury marketing is about offering convenience, creating bonds, anticipating what consumers want and offering it to them before they even articulate it. With the COVID-19 pandemic, new technologies have made a huge leap forward, many brands have been able to adopt them for their site (e-commerce) or in their store. We find virtual testing, augmented reality, 3D configurators or animations. Generation Z and even Alpha generations are increasingly consuming luxury products, which makes them relevant targets. These people are fans of user experiences and seek authenticity while having an affinity for new technologies.

■ 50% of total luxury consumers will be Millennials by 2025. Nowadays, Gen X represents 33% of luxury consumers, but their percentage will increase in the next 5 years. Source : Generation share of the luxury goods market worldwide 2018-2025 | Statista

■ By 2030, 35 to 40% of consumers in the luxury personal goods market will be Chinese customers, while e-commerce and online sales will represent nearly two-thirds of the market. This is partly due to the rise of young consumers such as Gen Z who are constantly connected and for whom new technologies are an integral part of their lives. Source: Le marché mondial du luxe devrait atteindre une valeur-record de 1500 milliards d’euros en 2023 ; les consommateurs de nouveau en quête d’expériences de luxe | Bain & Company

One of the luxury brands that is capitalizing on Generation Z is Gucci, one of Kering’s fastest growing labels that delivers excellent conversions and sales, both online and in stores.

The HENRYs

■ 43 years old is the average age of a HENRY. HENRYs, i.e. High-Earners-Not–Rich-Yet, are a consumer class that has started to rise and which is going to be extremely relevant in the coming years.

With a current income of 250 000 $ to 500 000 $ per year, HENRYs are believed to soon become the world’s wealthiest demographic group; therefore luxury brands have already started targeting them, cultivating their appreciation for authenticity, craftsmanship and heritage. Source: Deloitte Global Powers of Luxury Goods 2019.

HENRYs take advantage of technology. They pay online, using mobile devices, prefer credit cards with rewards and are not much into savings, as they are quite comfortable living in debt. When they shop online - which is a top activity for them - HENRYs opt for clothing and footwear, home furnishings, cosmetics, pet supplies, books, entertainment etc.

HENRYs need engaging shopping experiences, that run seamlessly across different channels and touch points. HENRYs don’t just settle for basic functions of digital platforms and apps. Their favorite brands are now using emerging technologies to tell stories, stir emotions, make them part of the creation process and keep them close.

The luxury marketing

Channels

■ Online now accounts for 12% of the market and continues to gain share, with customers increasingly influenced and enabled by digital channels, including in their physical purchases. Globally, 75% of luxury transactions were influenced by the online channel, and 20% to 25% of purchases were digitally enabled. Source: Bain & Co.

Fact is, consumers have expressed increasing interests in digital experiences and online content. According to many studies, more than 5.16 billion people will use the internet worldwide in 2023, which is an increase of 2% compared to the previous year.

Social media and influencers

■ $24 billion – that’s how much the influencer marketing industry is expected to be worth by 2024, more than double the €9 billion it was in 2020. Source: Global influencer market size 2024 | Statista

■ 76 percent of brands say their sales have increased rapidly, as a result of their influencer partnerships. Source: Ordre.

■ 79% of brands use Instagram for influencer campaigns, compared to Facebook (46%), YouTube (36%), Twitter (24%), and LinkedIn (12%). Source: 17 Key Influencer Marketing Statistics to Fuel Your Strategy.

Some of the world’s best paid Instagrammers are Kylie Jenner, Ariana Grande, Cristiano Ronaldo, Kim Kardashian West and Selena Gomez. According to Influencer Marketing hub, these celebrities make around $0.9-1 million per post.

■ 101,000 - 500,000 followers: this is the average size of the communities that luxury marketing professionals are searching, when it comes to choosing an influencer to recommend their brand.

Another option is going for the established key opinion leaders that have over 2 million followers. The objective, in either case, is to create high quality and authentic content that delivers. Source: ORDRE.

Brand collaborations

■ 60% of Millennials reported buying luxury brand collaborations, compared with 40% Generation X and 20% Baby Boomers.

Worldwide, the most purchased and best-known collaboration is Louis Vuitton x Supreme, followed by Adidas & Yeezy, Chanel & Pharrell, Nike & Off-white, Fendi & Fila, Louis Vuitton & J. Koons.

These collaborations between luxury brands and high-street brands have successfully helped heritage houses capitalize on the disruption.

Technology

■ $669,3 bn could be the value of the overall MarTech market in 2024. The emergence of new technologies including AI have enabled this exponential evolution. Source: Global MarTech revenue 2023 | Statista

■ Adopting data analytics tool is the Number 1 focus for luxury brands to provide personalized and superior customer service in 2024. Brands such as Louis Vuitton, Burberry, Tommy Hilfiger, Dior and Estée Lauder, have already started to take advantage of big data and AI-powered technologies, like machine learning and analytics, to offer more personalized and timely customer services. Source: Global Powers of Luxury Goods 2023.

■ $62 billion is the projected value of the augmented reality and marketing virtual reality market in 2029, This would take into account advertising, software and hardware with a majority for augmented reality applied to software. Source : AR & VR - Worldwide | Statista Market Forecast

Augmented Reality and Virtual Reality are extremely helpful at telling persuasive brand stories to which consumers feel attracted, as well as expand the brand’s marketing efforts.

Tiffany & Co presented an innovative project at the Vivatech 2024 exhibition, showcased at the LVMH stand named Dream Garden.

At the heart of this immersive experience is a groundbreaking experience: a stunning Virtual Try-on for three rings.

Fred, for example, uses virtual testing for his Force 10 bracelet collection. This technology, offered by Hapticmedia, allows you to visualize the bracelet on your wrist in real time and customize it as you wish.

The company wanted to convert visitors by encouraging them to co-design a bracelet from different models, colors, textures and so on.

After designing the bracelet, shoppers are also encouraged to try it on their own wrists using Augmented Reality. This solution has greatly improved the digital shopping experiences for clients and increased conversion rates. Read more about this client project here.

■ 80% Percentage of consumers reporting positive chatbot experiences and 57% Percentage of businesses that agree chatbots deliver large ROI with minimal effort. Source: 65 Viral Chatbot Statistics (2024 Insights & Trends)

Personalization

■ 40% of marketing executives report that personalization has a direct impact on maximizing sales, basket size and profits in direct-to-consumer channels, such as e-commerce, while another 37% point to increased sales and customer lifetime value through product or content recommendations.

More than one-third of respondents have seen increases in their transaction frequency as a result of personalization strategies. Source: Forbes Insights.

Guerlain 3D lipstick configuration tool allowing users to create their signature lipstick, choosing sizes, colors, cases, accessories, engraving their initials and so on. Learn more about 3D visualization and configuration technology.

■ 29% of Americans have customized apparel and footwear and their top 4 reasons to do so were: to design something just for fun, to feel pride in creating and designing, to demonstrate creativity and to stand out from other people. Source: Made to Order.

■ 57.2% of worldwide millennials interviewed replied “Yes, definitely!” to the question “Would you be willing to pay more for a high-end fashion or luxury item that was personalised to you?”, while 35.2% answered “Maybe”. Source: The Deloitte Consumer Review Made-to-order: The rise of mass personalisation.

Moreover, the demands for customized have stabilized at high levels and the most desired features are product configuration, made to measure and bespoke items. Source: 2019 True - Luxury Global Consumer Insight 6th Edition.

Personalization supported by 3D and AR technology: Contact Hapticmedia

These mentioned figures above are confirming that luxury marketing is becoming increasingly innovative, as new generations consumers are pushing brands to go out of their confort zone and adopt new and exciting approaches.

It is now the time for 360 degrees campaigns that use advanced technologies such as 3D product configurators, Augmented Reality, Virtual Reality to offer transparency to tell stories and drive engagement.

If you want to discuss about the above tactics, contact us and we will share with you our case studies, insight and ideas! Hapticmedia has over 15 years of expertise in this industry, clients including Louis Vuitton, Guerlain, Kenzo, Fred, Baccarat, and so on. We are aimed to bring you visible improvement!