Global luxury market surpasses trillion-dollar mark

Milan, Italy--The global luxury industry has surpassed $1 trillion in retail sales value this year, with the category that includes jewelry and watches seeing slight but positive real growth.

According to Bain & Company’s Luxury Goods Worldwide Market Monitor report released last week, the $1.120 trillion spent in luxury markets around the globe is a 5 percent year-over-year increase at constant exchange rates.

Spending in the personal luxury goods category--the category that includes jewelry and watches—has reached $253 billion, a 13 percent increase overall but only a 1 to 2 percent improvement at constant exchange rates.

In the report, Bain & Company identified three macro-economic events that hampered growth potential for the global luxury industry this year: the strength of the U.S. dollar, dissuading tourists from visiting the United States and driving Americans to buy their goods in Europe; the Chinese stock crisis impacting consumer confidence in the U.S.; and oil’s price drop reducing the wealth of most exposed economies and its key luxury consumers.

Around the world
In 2015, the strength of the U.S. dollar has continued to weaken luxury consumption in the Americas.

Department stores have suffered because of a slowdown in spending by both tourists and locals and played on promotions to bring in consumers. The off-price channel has become a top performer, with organized trips driving tourists to premium outlet centers and local shoppers looking for bargains while buying online, the report stated.

Canada also has witnessed improved luxury goods sales, as there has been decreased competition from the U.S. due to the strength of the dollar.

When it comes to cities, the report showed that the top luxury goods market in the world are New York, followed by Tokyo, Beijing, Milan, and Paris.

E-commerce
Online also has turned out to be a winner in 2015, as European and American retailers continued to actively respond to customer requests for an omnichannel experience.

Social e-commerce also has begun to pick up steam, the report said, with “buy” buttons transforming the role of social networks from pure referral to a retailer’s website to direct shopping on social platforms.

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Mobile commerce also is becoming a central touchpoint and growing channel, with wearables potentially becoming the “new frontier of mobile,” Bain & Company said.

Off-price shopping
The U.S., Europe and Japan have been trending as the most-penetrated geographies when