According to a report by Bain & Company, luxury brands in the United States are experiencing an uptick in sales from high-end shoppers. The report reveals that luxury brands focusing on wealthier consumers are outperforming those targeting aspirational shoppers with lower incomes, who are more affected by economic uncertainty.

In addition, Bain & Company’s biannual report has revised its annual sales forecasts for the global luxury goods market, now predicting growth between 5% and 12% this year. This is an increase from the previous forecast of between 3% and 8%. The driving force behind this growth is primarily China, especially now that Covid lockdowns have been lifted.

However, the report also points out a slowdown in the United States, suggesting that the strong post-pandemic spending spree may be losing momentum. Federica Levato, a partner at Bain & Company, explains that this slowdown is mainly attributed to the aspirational segment of customers, particularly in categories like streetwear and sneakers.

Levato emphasizes that brands catering to the needs of their top customers are performing better than others. Many high-end labels are adjusting their merchandising strategies or focusing on premium offerings to cater to their wealthiest clients, who are more resilient to economic challenges. On the contrary, younger shoppers are facing increasing pressure from rising prices, impacting their purchasing power.

The report also mentions the success of companies like Hugo Boss, which recently raised its sales and profit targets for 2025. The brand is witnessing strong growth in the United States and anticipates revenue growth in the Asia-Pacific region.

Although there are concerns regarding China and a potential slowdown in sales growth, there is still a significant demand for luxury goods in the country. According to Bain, luxury sales amounted to 345 billion euros last year.

Overall, the report underscores the significance of targeting high-end consumers and adapting to their needs in order to thrive in the luxury sector. As economic uncertainty persists, brands that can cater to their top customers and provide them with a premium experience are more likely to succeed.

Useful links related to the article:
Bain & Company’s Luxury Study 2021 Report
Bain & Company’s Insights