Forget Quality And Sustainability: High Price Drives Consumer Demand For Luxury Brands
The personal luxury goods market has come through the most disruptive year in recent history and emerged on the other side stronger than ever.
After reaching a global high of $307 billion in 2019, industry sales dropped a whopping 22% in 2020 only to recover and even top it in 2021, reaching $309 billion, according to Bain. By comparison, the global recession of 2008 and 2009 resulted in only a 9% drop over the two-year period.
Early on in the pandemic, the average price of luxury clothing, shoes and accessories on Farfetch, a leading global multi-brand luxury retailer, dropped but then quickly began to rise. The average selling price of luxury clothing and shoes advanced modestly but still rose, from $648 and $486 respectively in February 2020 to $653 and $521 by May 2021.
However, the price increase of luxury accessories was off the charts, rising from $456 to $633, according to data compiled by Dataweave.
For example, during the initial period following the pandemic, some 90% of Louis Vuitton bags, the brand’s cash cow, were discounted on Farfetch. That dropped to 33% in the second half of 2020 and then in 2021, not a single Louis Vuitton bag, or any other clothing, shoe or accessory item, were available at a sale price.
That luxury consumer demand grew so markedly in 2021 under pressure of pandemic restrictions in shopping and travel and in the face of rising prices provides external validation of findings in a new study by Joel-Noël Kapferer and Pierre Valette-Florence published in the Journal of Business Research.
Read More at https://www.forbes.com/sites/pamdanziger/2022/03/12/forget-quality-and-sustainability-high-price-drives-consumer-demand-for-luxury-brands/amp/