Luxury Accessories Industry Analysis
Accessories are items added to complete, decorate or complement the look or finish of a consumer or consumer product. Luxury accessories are high-priced and usually high-quality branded goods. Premium accessories are used to match users’ style and personality and partly to redefine their identity and social position. The unique attribute of each premium product category generally belongs to one brand, like Hermès for leather bags and Rolex for watches.
In the luxury accessories market, which is worth more than €250 billion, growth is often linked to economic optimism in individual markets. Globally the premium accessories market is dominated by brands such as Louis Vuitton, Burberry Group plc and Prada. Typically these brands establish global prestige by collaborating with designers and fashion shows.
Key Market Segments
Important market segments for premium accessories include:
- Personal accessories: This segment includes premium accessories such as watches, jewelry, handbags, belts and sunglasses. Watches are one of the most preferred luxury accessories. The global luxury watch market is dominated by Switzerland, which enjoys a near monopoly. Rolex, a Swiss brand with annual sales of more than $8.5 billion, is considered to be the most aspirational premium watch brand in the world.
- Luxury auto accessories: These accessories encompass a full line of comfort and appearance equipment for cars including backup sensors, leather interiors, seat heaters and customized high-quality interiors.
Regional Market Shares
The global market for luxury accessories is primarily driven by the economies mentioned below:
The USA is the largest market in the world for luxury accessories due to robust demand from wealthy domestic consumers and international tourists shopping in this country. Digital shopping is highly developed in this country, where premium accessories and apparel are worth about 41% and 28% respectively of online luxury goods sales.
Spending for luxury goods and accessories has increased in Europe due to the euro’s recent depreciation which has made both travel to Europe and shopping more affordable for luxury brands. As such more Chinese tourists are turning to this region. Jewelry and watches are some of the highest selling luxury accessories, accounting for about 18% of luxury consumer expenditure in Europe. The UK, Italy, France are three of the preferred destinations in Europe for luxury purchasing of goods and accessories.
Sales of luxury accessories, including watches and jewelry are strong in Japan. The increasingly wealthy households with net financial assets of more than 100 million yen have contributed to growth in this market. The Japanese premium accessories market also grew partly because of the weaker yen making luxury shopping cheaper for foreign tourists in this country.
Many luxury brands have found Chinese consumers avid for their products in recent years, although government restraints are expected to limit this market in the foreseeable future.
Changing customer preferences have resulted in innovative trends emerging in the luxury accessories industry.
Traditionally premium accessories sales have been dominated by women. However in recent years young urban male consumers are increasingly contributing to these sales. According to a recent Bain & Company study, the global men’s accessories market, particularly men’s bags and apparel segments, is likely to thrive going forward. Growth in men’s affinity for accessories is likely to drive the global market for premium accessories to more than $7 billion in the foreseeable future. To capitalize on this growing trend, leading luxury brands including Ralph Lauren, Prada, Hermes and Gucci are investing in luxury men’s-only accessories stores.
A digital presence is becoming vital for the premium accessories industry. Against this background many premium brands like Gucci and Coach are embracing digital technology to reach wealthy customers. Luxury bands such as Chanel and Louis Vuitton are also expanding their digital presence by creating visually appealing digital platforms through short films and apps. These efforts are helping companies to engage and connect with the growing number of wealthy online customers to enhance brand awareness and improve sales.
Players in this industry are increasingly developing smart luxury accessories to adapt to technology-driven young premium buyers. For instance, Ralph Lauren launched a smart bag that enables wearers to fully charge their phones, Kovert Designs developed smart jewels with Altruis stones fitted into designer ornaments that vibrate when a person receives calls or text messages, and Swarovski in collaboration with Misfit co has developed jewelry that can track a wearer’s sleep patterns and, for runners or joggers, distance traveled and calories burned. As technology and innovation are becoming imperative for every industry, smart accessories are likely to grow from niche to mainstream.
List Of Leading Associations
- International Luxury e-Commerce Association
- The United States Fashion Industry Association
- American Watch Association
- The International Colored Gemstone Association
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