Brussels – The Computer & Communication Industry Association has released the fourth study in the “The Sky is Rising” series focusing on the Internet’s economic impact on the luxury goods sector. The study explains how Internet technologies support the growth of the luxury goods market allowing companies new forms of marketing, sales and consumer engagement.
The latest study from Floor 64, co-authored by Mike Masnick, Michael Ho and Joyce Hung, provides a detailed economic analysis on various product segments in the luxury goods market. Using most recent data the study quantifies and illustrates how the sky is rising for the luxury goods sector.
Some findings from the report:
The luxury goods market is thriving, especially for brands which embraced the Internet, digital marketing and innovation. Importantly, digital technologies have also enabled new entrants to participate in markets that previously were nearly impossible to enter. Among the findings this year:
- The luxury goods market has been growing worldwide. The market grew from €153 billion in 2009 to almost €217 billion in 2013 — that’s a 43% increase during one of the worst global recessions.
- The global luxury accessories market grew from €36.7 billion in 2009 to €60.8 billion in 2013, a nearly 66% increase.
- The global market for luxury watches and jewelry grew from €29.1 billion in 2009 to €49.9 billion in 2013, a 71% increase.
- The global market for luxury cars has grown from €210 billion in 2009 to €320 billion in 2013, a 52% increase.
- Direct online sales of luxury goods more than doubled from €2.5 billion in 2007 to €9 billion in 2013 which is a 260% increase in only six years.
- 65% of wealthy consumers believe brands with no social networking presence are out of touch.
- 92% of luxury consumers use the Internet to search for information about a product before buying.
- More than 50% of online luxury goods sales were for full-price products.
- Mobile commerce is booming — in 2013 39% of traffic to the Top 500 e-retailers come from smartphones.
Masnick, who authored the report said, “As with many things online, we’re seeing that those who embrace what the internet enables have found that it pays off tremendously. Brands who have embraced the internet and what their customers want find they’re better able to connect with consumers, as potential buyers expect to find and engage with products, brands and other fans of such products. We’re seeing unique and innovative business models that are increasing brand loyalty and opening up new ways to reach a market, such as mobile commerce. Luxury goods companies are facing a tremendous opportunity, which many are already seizing.”
The following can be attributed to CCIA Brussels Director Jakob Kucharczyk:
“As consumers look for Christmas presents they will find most of their favorite brands online. Luxury goods companies are increasingly taking advantage of the marketing opportunities and innovations the Internet offers. New luxury companies are entering a traditionally very closed market. The Internet is a driving force behind a thriving market for luxury products and a will increasingly assert itself as a major distribution channel.”
“We were interested in this additional research as we have already seen how the Internet drives growth and innovation in other sectors. The entertainment industries are a good example. This study confirms in an objective way the details of Internet-enabled growth for specific types of luxury products. It adds to the growing evidence that online innovations will continue to positively impact luxury goods markets.”