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Luxury goods sales four times more than estimated – BCG
03
Feb '14
The Boston Consulting Group (BCG) launches its newest report on the global business of luxury, Shock of the New Chic: Dealing with New Complexity in the Business of Luxury.
 
The report -- the third in BCG's series of flagship reports on the luxury sector -- introduces BCG's proprietary Metroluxe Indices to track the luxury status and growth potential of the world's richest cities. The three indices help brands answer pressing questions such as which cities should be priorities for their luxury goods and services, where brands should optimize existing retail footprints rather than opening new stores, and where tourists spend most freely on luxuries.
 
The report also flags the importance of finely detailed segmentation of customers and markets and of the value of analyzing markets at a city level rather than by region or nation. In combination, these approaches enable brands to cluster cities together and develop sophisticated, localized go-to-market strategies that better serve local customers and tourists.
 
Furthermore, the flagship report highlights BCG's projections that the sales of luxury goods and services are far greater and far more robust than widely thought. BCG's latest study found that consumers spent more than $1.8 trillion worldwide annually on items they defined as luxuries -- far beyond the $390 billion usually cited as total global sales of luxury goods such as apparel, cosmetics, watches, and jewelry. 
 
"Luxury experiences are by far the most powerful driver of luxury spending everywhere. Collectively, they make up nearly $1 trillion of the annual global total," said Jean-Marc Bellaïche, a BCG senior partner and coauthor of the report. "As older consumers realize that they have all the 'things' they want -- and as younger people favor experiences they can share with their friends -- consumers are spending more on everything from dining at five-star restaurants to exotic vacation travel."


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