• Linkdin

Luxury goods sales four times more than estimated – BCG

03 Feb '14
5 min read

Inside BCG's New Index of Luxury Buying
Although global luxury markets are growing steadily, BCG research finds that luxury providers risk lagging behind the markets they are meant to serve. Such providers, the report explains, must adapt to new levels of market complexity, accommodate new kinds of purchasing behaviors, push into new geographies and cities, evaluate different business models, and do more with digital technology.
 
Luxury players must anticipate such changes by focusing not on regional-level strategies -- often their conventional market lens -- but on city-level approaches or at least on strategies that target a cluster of cities whose inhabitants have roughly similar buying behaviors. "Brands must become much more specific in sizing and scoping markets," said Sarah Willersdorf, a BCG principal and coauthor of the report. "While creativity, quality, and brand protection will remain paramount, brands need to plan their go-to-market strategies more systematically -- including marketing, assortment, merchandising, and pricing -- at the city or city-cluster level."
 
To begin to explore these issues, BCG has developed its "Metroluxe" family of indices (collectively called the BCG Metroluxe Indices) to measure the current luxury status and growth potential of the world's 550 richest cities as defined by GDP per capita. Collectively, the cities in the index drive nearly 50 percent of global GDP.
 
The first of the three indices is the BCG Local Metroluxe Index, which gives some eye-opening city-by-city snapshots of the intrinsic potential of local luxury demand. The second is the BCG Total Metroluxe Index, which builds on the local index by overlaying the local propensity to spend on luxury with tourists' luxury spending and with supply-side factors such as the maturity of distribution networks and the impact of customs duties. The third is the BCG Metroluxe Growth Index, which provides a dynamic perspective of the growth in total luxury demand from 2012 through 2017.
 
Together, BCG's family of indices balances both demand and supply factors. It takes into account not only local demand from high-net-worth individuals and mass-affluent demographics but also the overlooked tourist factor -- tracking the impact of domestic and international tourism on luxury spending in the city.

Leave your Comments

Esteemed Clients

TÜYAP IHTISAS FUARLARI A.S.
Tradewind International Servicing
Thermore (Far East) Ltd.
The LYCRA Company Singapore  Pte. Ltd
Thai Trade Center
Thai Acrylic Fibre Company Limited
TEXVALLEY MARKET LIMITED
TESTEX AG, Swiss Textile Testing Institute
Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)
Taiwan Textile Federation (TTF)
SUZHOU TUE HI-TECH NONWOVEN MACHINERY CO.,LTD
Stahl Holdings B.V.,
Advanced Search