Optimistic Insights from FT Business of Luxury Summit 2023

The luxury industry is witnessing a transformation as brands navigate the balance between business growth, eco-ethical operations, and expanding their digital presence, including the metaverse. At the FT Business of Luxury Summit 2023, experts discussed the social, political, and economic forces shaping the future of elite brands.

An exciting insight for the category is the projected growth of the global luxury goods market, which is expected to increase from €388bn ($416bn) in 2022 to €494bn ($530bn) in 2026 (Boston Consulting Group, 2022). Despite economic challenges, the sector's growth is driven by larger brands with resources to enter new markets, benefitting from shifts in luxury's top regional customers.

Key trends highlighted in the report include:

1. Industry Growth Amidst Inflation: High-end fashion brands worldwide are raising prices to keep up with inflation and maintain exclusivity. Chinese consumers, in particular, are not expected to change the frequency of their luxury purchases in 2023, despite price increases.

2. Next Generation Affluents: Millennials and Gen Zers are becoming the dominant luxury spenders. These younger consumers engage extensively online, conducting thorough social media research and using augmented-reality-based try-on technology to inform their purchases. They value inclusivity, gender-fluid brands, and a focus on mental and physical well-being.

3. Crafting Responsible Luxury Brands: Ethical and environmental practices are becoming crucial for luxury brands. Proposed legislation in the EU and US aims to standardise and enforce sustainability claims. New frameworks like the Taskforce on Nature-Related Financial Disclosures and Eco-score are redefining sustainability, emphasising a nature-positive approach and expanding sustainability ratings to textiles.

4. Preparing for Luxury's Metaverse Moment: The metaverse presents an opportunity for luxury brand awareness and engagement. Digital fashion has gained traction, but influencers are predicted to play a significant role. Augmented reality allows consumers to experience luxury goods and try on different looks virtually, creating new avenues for brand interaction.

These insights from the FT Business of Luxury Summit demonstrate the evolving landscape of the luxury industry, where growth, digital innovation, sustainability and the metaverse are shaping the future of elite brands. If you want to talk to one of our team about the luxury industry, they would love to hear from you. Register your interest here.