Where is the luxury industry going as we head toward 2023? Let us take a look at the latest trends in luxury, including trends for the 2022 holiday season.
In the latter part of 2022, luxury brands are still dealing with strained supply chains and unprecedented inflation. These post-pandemic challenges are coupled with an increased consumer demand for sustainability and social responsibility.
Yet despite these challenges, the industry as a whole has proven it’s incredibly resilient — and the quickest industry to bounce back from a global crisis. In fact, the future shows great promise for the sale of luxury goods. The global industry is predicted to reach $1.69 trillion by 2025, with 30% of luxury sales taking place online.
2022 Luxury Shopping Trends
Luxury has always been a status symbol for those with more disposable income, so naturally, luxury shopping trends are a slight departure from overall retail trends. Here is what to expect from the luxury industry in the second half of 2022.
Brands Are Stepping Into the Metaverse
Non-fungible tokens (NFTs) have gone from being a mysterious acronym to one of the hottest buzzwords of the year. But this digital asset is much more than just a talking point — NFTs are predicted to account for 10% of the luxury goods market by 2030.
In fact, the metaverse as a whole is having a massive impact on the luxury sector. Brands like Gucci and Balenciaga are pioneering the way, filing trademarks for smart glasses and connected clothing. Balmain, Burberry and Louis Vuitton are also getting ahead of the trend, experimenting with artificial reality (AR), virtual reality (VR), gaming and NFTs.
In addition to selling digital assets, luxury brands are increasingly accepting them as many of the world’s largest fashion houses announced this year they will accept cryptocurrency as payment. Gucci, Balenciaga and Tag Heuer will accept cryptocurrencies at various stores throughout the world. More of the world’s young, elite and affluent shoppers are moving from crypto-curious to crypto-enthusiasts giving brands the chance to demonstrate relevance by accepting cutting edge payments.
Resale Is on the Rise
Millenials and Gen Z increase their spending on high-end goods, they are redefining the meaning of luxury. Their concern for the environment — coupled with a desire for exclusivity — is driving the rise of resale across the global luxury market. Incredibly, the resale clothing market is expected to grow 11 times faster than regular retail clothing sales. Online marketplace Mercari estimates that by 2030, the baby and children’s luxury resale market will be worth USD$1.45 billion.
Much of today’s luxury resale business is done through third-party ecommerce sites like The RealReal and Vestiaire Collective. And while brands once turned, at best, a blind eye to the resale of its past seasons’ merchandise, many fashion houses are inking deals with the consignment platforms. To further protect the brand while still engaging with the nostalgic and eco-conscious consumer, other brands are looking to bring resale in house.
As brands embrace resale, traceability and authenticity is of paramount concern. According to a Vogue Business survey, 41% of global consumers and 58% of Chinese shoppers are interested in the development of luxury traceability features. Brands can meet these demands by embracing blockchain technology, which can help securely authenticate and track products with each resale transaction.
Consumers Want Rental
In addition to resale, luxury brands have historically been cautious about entering the rental market. And yet, both resale and rental are parts of the circular economy and could boost luxury’s image among the young, eco-conscious consumer and help brands meet sustainability goals.
As companies like Rent the Runway continue to have astonishing success, consumers are voicing an interest in luxury rental services offered directly from brands. Yet even though 30% of surveyed consumers rated luxury rental as an exciting upcoming trend, the majority of luxury brands have failed to deliver.
Just 36% of luxury clothing brands can be found on Rent the Runway, and Ralph Lauren is one of the few index brands with a rental subscription service. Forward-thinking companies can see this as a wide open opportunity. By diving into the rental services game early, they can gain market share and beat out the competition.
Exclusivity Wins This Holiday Season
Many retail brands are bracing themselves for a holiday season hindered by inflation and an economic downturn. Luxury brands have less to worry about. That is, as long as they commit to delivering the exclusivity and newness their customers are seeking.
Whereas the average consumer might be tightening their wallet for the holidays, luxury consumers are still open to spending. But they are more keen to do so if the product offers a fresh perspective, sense of uniqueness or immersive experience.
Therefore, top luxury brands and department stores are preparing for the 2022 holiday season by treating customers to new product lines, exclusive releases and experiential branding.
Holiday Sales Are Starting Earlier Than Ever
Black Friday once marked the beginning of the holiday shopping season. But the popularity of online shopping has pushed the start date earlier with every passing year. In fact, many experts say the holiday shopping season for 2022 is already underway.
When did the holiday shopping season begin? According to Adweek, the new holiday sales period starts with Amazon Prime Day in July and continues into the fall.
Luxury brands can capitalise on this trend by marketing holiday sales early. They can reach shoppers when they are not so busy — or worn out by the hustle of the holiday season.
The Future of Luxury
Consumer expectations are rising with every passing year, and only the companies that exceed these expectations will continue to thrive. Ultimately, luxury brands must hyper-focus on delivering a more sustainable, environmentally friendly, ethical and digital-friendly product.
“Luxury brands are now actors in social conversations, driven by a renewed sense of purpose and responsibility,” said Claudia D’Arpizio, partner at Bain & Company.
Make sure your luxury eCommerce store is ready to meet consumer demands in the second half of 2022. ESW helps you take control of your DTC sales channel and build lasting relationships with customers. We deliver a high-performing platform built for high volumes. Schedule a demo today.