Editor’s Note
The latest Altagamma Observatory report, produced with Bain & Company, presents a nuanced picture of the global luxury market. It details a sector-wide slowdown, redefined by a growing consumer focus on experiential spending and the second-hand market. This analysis serves as a clear radiograph of the industry’s current pressures and shifting contours.
The latest “Altagamma Observatory 2024” report, in partnership with Bain & Company, quantifies the slowdown in the dream sector and its new configuration, caught between the quest for experiences and interest in second-hand goods. A radiography of the crisis.
The figure of the day comes from Bain & Company. In partnership with the Italian luxury brand association Altagamma, the consulting firm unveiled a 2024 report in half-tones.
warn Claudia D’Arpizio and Federica Levato, Senior Partners at Bain & Company and authors of the report, in unison. It echoes the “luxury fatigue” mentioned earlier this month by Frédéric Grangié, President of Jewelry and Watches at Chanel.
Faced with economic uncertainty, rooted in inflation and the geopolitical climate, but also with the continuous price increases from brands, global consumers of luxury goods are reducing their purchases. This trend, particularly marked among Generation Z, whose profile challenges luxury brands, has, according to the report, led to a reduction in the luxury customer base of approximately 50 million over the past two years.
Consequence: the personal luxury goods market could experience its first slowdown since the Great Recession, excluding the Covid-19 period, with a decline of -2% at current exchange rates compared to the previous year. A crisis that some names like Miu Miu and Hermès are defying, and which does not affect everyone.
The report highlights the strong polarization between the wealthiest clients, who represent 1%, and other consumer segments, who are losing purchasing power globally. These high-end clients continue to increase their share of consumption, although they “feel a gradual loss of brand exclusivity.”
To attract them, the recipe is experiential luxury, favored by the shift in spending from this age group towards travel, dining, social events, wellness, and personal care rather than products. However, jewelry, a safe-haven value, and ready-to-wear continue to meet with the most success in the sector.
the study specifies. Hopes are turning towards the United States, which, post-election, are expected to be the best customers in 2025 with a projected growth of +4.5%, followed by the Asia-Pacific region (+3%) and Japan (+1%) in 2025.
The famous Gen Z, however, continues to access luxury through entry-level products, such as leather accessories. This behavior supports the leather goods sector (in timid growth of +2% in 2024), suffering from “the decline in occasional consumers and Chinese tourism have reduced sales and increased inventories.” Also promising, the second-hand market is expanding, with strong demand for jewelry, clothing, and vintage leather items. It competes with outlets, an expanding consumption channel.
Despite this loss of clientele, the Altagamma Observatory 2024 report announces that the global luxury market should remain stable compared to 2023 (with nearly 1,500 billion euros) and could experience positive evolution, subject to developments in key markets, in 2025.