The UK luxury market is forecast to double in size over the next five years, increasing in value to £12.2 billion in 2017, in comparison to £6.6 billion in 2012, according to new research.
The findings form part of the 2013 UK Luxury Benchmark study conducted by Walpole – a non-profit British industry group – and market research company Ledbury Research.
The research found that digital innovation and growth across emerging markets, such as Brazil and India, will be key to the future success of the sector.
Key points
• Over the course of 2013, the sector is predicted to grow 12 per cent to £7.4 billion and 83 per cent of British brands expect a sales rise during the year
• The most popular initiative for UK brands was building a strong e-commerce and mobile offering
• Compared with last year, nearly double the amount of respondents are set to invest in m-commerce in the year ahead
• 98 per cent believe that reaching the next generation of consumers will present the greatest challenge to the luxury sector
• Only 13 per cent of brands surveyed currently have operations in Brazil though 52 per cent of UK brands have an interest in entering the country ahead of the Olympics and World Cup
• In the UK, London continues to be the prime retail destination for luxury labels, though 81 per cent of brands have a presence outside the city, with the South East and North West the next largest regions
The analysis was based on figures from the apparel, accessories, travel, hospitality and jewellery sectors, plus the results of surveys with senior management and executives.
“Despite the backdrop of the Eurozone crisis and a difficult economic environment, the UK luxury industry remains extremely robust and is forecast to grow significantly in size,” said Julia Carrick, chief executive of Walpole.
Over 80 per cent of the labels surveyed forecasted an increase in sales for 2013, reports The Business of Fashion.
The study also found that tourism remained crucial for the industry – with over 60 per cent of brands specifically targeting shoppers from abroad – with Chinese visitors the fastest-growing group of shoppers, closely followed by Americans. London remained the key central hub for most brands, with Manchester and Edinburgh experiencing the strongest sales outside of the capital.
“Behind some buoyant numbers, this year’s results reveal the key theme of innovation for the British luxury market,” said James Lawson, director of Lebury Research. “Innovation from the brands – including their use of technology and social media – and a next generation of new and inquisitive luxury consumers who are voracious users of these new platforms.”
Commenting on the research findings, Mark Haviland, MD, Rakuten Marketing, said: “It’s absolutely right that digital innovation is a priority for luxury brands. Customers no longer only associate shopping online with bargains and as a result digital now opens many doors for high-end retailers, allowing them to create an exclusive shopping experience for their online audience across the web, social, mobile and tablet.
“An array of style blogs and pioneering digital publishers can provide luxury retailers with the e-commerce tools to target hyper connected consumers, whilst echoing their own quality brand values at the same time. Through sophisticated features, such as dynamic ads with 360 degree products views and interactive video, digital can truly drive the growth of luxury.”
