LAPPING UP LUXURY GOODS Despite retail closures, fashion show cancellations, and low confidence in the economy, global sales of luxury goods made a full recovery ( see chart ) and will continue to surpass pre-pandemic levels, with sales increasing from $321 billion in 2021 to $352 billion in 2022, Financial Times reports. Here's what the report predicts for the sector: Consumer shifts . A surge of buying among Americans in inland cities such as Austin and Pittsburgh is happening after many people moved out of larger coastal cities during the pandemic. The shift from spending on experiences to goods will likely persist for another year. Pricey items . After remaining stable for years, luxury brands including Louis Vuitton, Hermès, and Chanel raised prices during the pandemic. With material and labor costs rising, price hikes will continue into 2022, with some brands considering double-digit price increases. Supply chain ownership . Brands such as Chanel and Prada are acquiring more of their suppliers as access to materials and manufacturers becomes more difficult and costly, and customers demand greater transparency. The trend will continue in 2022. Secondhand grows . The secondhand market continues to increase. More brands are partnering with secondhand platforms, such as The RealReal, to offer authentication services and incentivize customers to consign their items via store credit, or are using their websites to facilitate secondhand sales directly. NFTs take off . By 2025, Gen Z will account for more than one in five luxury purchases. Brands will invest further in gaming partnerships and NFTs, which are becoming a formidable revenue stream. Metaverse gaming and NFTs could offer a 25% uplift to profits for the luxury industry by 2030. E-commerce investments . E-commerce luxury sales nearly doubled from 12% to 22% during the pandemic, and are expected to rise to as much as 30% by 2025. Brands such as Gucci and Alexander McQueen are moving to consignment models and improving their websites to gain greater control over inventory, pricing, and customer relationships.
While retail sales slowed as factory shutdowns in Asia halted production, high- end sneaker platform GOAT.com sprinted through supply chain bottlenecks, a Yahoo Finance report says. Here are ve ways the platform jumped those hurdles: 1. Sneakers have become more than just athletic gear—they’re now coveted luxury items that can go for $10,000 or more on GOAT.com, such as a pair by Kanye West and Louis Vuitton ( pictured ). 2. Sneakers are one of the best-selling products in the luxury e-commerce market. The global sneaker market was valued at $79 billion in 2020 and is predicted to reach $120 billion by 2026. 3. Women buyers are boosting the popularity of high-fashion sneakers. This demographic represents 40% of GOAT’s consumer base and continues to grow. 4. E-commerce platforms are getting into non-fungible tokens (NFTs), allowing traders to buy and sell collectible items without physically shipping them. On Black Friday, GOAT started a campaign that allowed consumers to drop into virtual worlds where they could access their products in different settings. 5. GOAT tapped into increased demand for cross-body bags, which have become staples for Gen Z and millennial urbanites wanting to stow masks and hand sanitizer. U.S. sales of men’s and unisex handbags were up almost 700% in 2021 compared to 2018. SNEAKERS SIDE-STEP DISRUPTION
By customer nationality (%)
$ Billion
300
100
Other Asian Rest of world
250
80
Chinese
200
60
Japanese
150
40
American
100
20
50
European
0
0
2007 08 09 10 11 12 13 14 15 16 17 18 19 20 21
2019 2021
Year
Source: Bain-Altagamma Luxury Market Monitor
February 2022 • Inbound Logistics 15
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