Luxury Goods Retailing - US

Luxury Goods Retailing - US

This report differs from other Mintel retail reports in that it looks primarily at companies involved in manufacturing and distribution, rather than pure retail companies. For specific data you will find:

• An excellent discussion and analysis of three luxury sectors: fashion and leather (including apparel, accessories, and shoes); perfumes and cosmetics; and watches and jewelry
  
  
• Unique sales data for the 25 leading luxury brands (US and global), as well as an estimate of the total market for products discussed
  
  
• Extensive discussion of strategies currently in play, with primary focus on the seven market leaders
  
  
• Advertising spend for leading luxury goods companies

This report will help you understand the luxury goods market and where opportunities exist:

• Why this formerly “recession-proof” market is a little less so today
  
  
• An understanding of where growth will come from in 2008-10, taking into account the complex cross-currents in the U.S. and global economy, and the value of the US dollar
  
  
• How household income exerts an hourglass effect on the luxury market, and why this has been a problem for mid-tier department stores like Macy’s, Nordstrom’s, and Dillard’s
  
  
• An extensive look at consumer motivations to buy luxury goods, and why cutting corners has created a risk for the industry
  
  
• How much consumers say they spend on luxury, brands purchased, and stores where they buy

For the purposes of this report, luxury goods are defined as premium branded products including apparel; accessories; perfumes; cosmetics; jewelry; watches; and some home goods. Other luxury products such as automobiles, art, wines and spirits, food, electronics and personal services are not discussed within this report.

 
 

Scope and Themes

What you need to know

Definition

Market size and sales data for this report

Abbreviations and terms

Abbreviations

Executive Summary

A cooling economy weakens growth

HNWIs create an hourglass effect in spending

Everyone wants to sell luxury and fashion goods

Leather loses its luster, cosmetics improve

A complex marketing mix

Department stores in decline

Additional target audiences

A second hourglass effect—spending by age

When male consumers matter

The importance of quality

Mixing retail channels requires firm control of the brand

Future trends

Slowing growth in a difficult market

Department stores to play a declining role

Fast fashion may slow down

Small is big

Market Size and Forecast

Sales leaders by company

Figure 1: Estimated U.S. luxury goods market size, by 25 largest luxury brands and others, 2005-06

Forecast

Figure 2: U.S. Luxury market sales and forecast, at current and constant 2007 prices, 2004-10

Global market overview

Figure 3: Estimated global luxury goods market size, by 25 largest luxury brands and others, 2005-06

Market Segmentation

Figure 4: U.S. luxury goods market segmentation revenues, 2006 and 2007

Fashion and leather

Perfume and cosmetics

Jewelry and watches

Supply Structure

Introduction

Coach Inc.

Estée Lauder

LVMH Moët Hennessy-Louis Vuitton

Phillips Van Heusen/Calvin Klein

Polo Ralph Lauren Corp.

Tiffany & Co.

Tommy Hilfiger

Advertising and Promotion

Traditional advertising

Figure 5: Advertising spending by leading luxury goods companies, 2005 and 2006

Department store advertising

Figure 6: Advertising spending by department store chain, 2005 and 2006

Figure 7: Women’s shoes at Macy’s, 2007

Figure 8: Designer fur sale at Bloomingdale’s, 2007

Runway and trunk shows

Celebrity spokespersons

Art meets commerce

Retail Distribution

Overview

Figure 9: Retail channels for luxury goods purchases, 2007

Figure 10: Retail channels for luxury goods purchases used by higher income respondents, 2007

Department stores

Figure 11: Products purchased at leading department stores, 2007

Company-owned retail

Licensing

e-commerce

Figure 12: E-commerce sales, 2001-06

Figure 13: Attitudes and behavior regarding online shopping, by household income, 2006

Market Drivers

Leading economic indicators

Figure 14: Key economic indicators (GDP, PDI, savings, unemployment), 2000-06

Declining consumer confidence

Figure 15: Consumer sentiment index, 2001-07

The declining U.S. dollar

Figure 16: Euro-Dollar exchange rate, 2001-07

Affluent households and the “hourglass effect”

Figure 17: Number of HNWIs in the U.S., 2002-06

Counterfeits, knock-offs and cheap chic

Figure 18: Categories of counterfeit goods seized by U.S. Customs, by % value, FY2007

Figure 19: Value of counterfeit goods seized by U.S. Customs, 2006-07

Knockoffs and cheap chic

Figure 20: Rate of clothing purchases at mass merchandisers and discounters, by household income, May 2006-June 2007

The influence of the Web

Online discounters

Luxury goods rental services

The second hourglass effect

The Consumer—Luxury Goods Ownership

Brief summary of all findings

Ownership

Figure 21: Luxury goods ownership, November 2007

Types of luxury goods owned

Figure 22: Categories of luxury goods owned, by gender, November 2007

Figure 23: Categories of luxury goods owned, by age, November 2007

Figure 24: Categories of luxury goods owned, by household income, November 2007

Figure 25: Categories of luxury goods owned, by race/ethnicity, November 2007

Who luxury goods are purchased for

Figure 26: Persons luxury goods are purchased for, November 2007

The Consumer—Reasons to Purchase (or not) Luxury Goods

Reasons to purchase luxury goods

Figure 27: Reasons to purchase luxury goods, by gender, November 2007

Figure 28: Reasons to purchase luxury goods, by age, November 2007

Figure 29: Reasons to purchase luxury goods, by household income, November 2007

Why luxury goods aren’t purchased

Figure 30: Reasons not to buy luxury goods, by gender, November 2007

Figure 31: Reasons not to buy luxury goods, by household income, November 2007

The Consumer—Luxury Apparel

Spending on luxury apparel

Figure 32: Actual spending and maximum spending on luxury apparel, November 2007

Luxury clothing brands owned

Figure 33: Luxury apparel brands owned, by gender, November 2007

Figure 34: Luxury apparel brands owned, by household income, November 2007

Stores in which luxury clothing is purchased

Figure 35: Channels where luxury apparel is purchased, by gender, November 2007

Figure 36: Channels where luxury apparel is purchased, by household income, November 2007

The Consumer—Luxury Accessories and Shoes

Spending on luxury accessories

Figure 37: Actual spending and maximum spending on luxury accessories, November 2007

Luxury accessory brands owned

Figure 38: Luxury accessory and shoe brands owned, by gender, November 2007

Figure 39: Luxury accessory and shoe brands owned, by household income, November 2007

Stores in which luxury accessories are purchased

Figure 40: Channels where luxury acccessories and shoes are purchased, by gender, November 2007

Figure 41: Channels where luxury accessories and shoes are purchased, by household income, November 2007

The Consumer—Luxury Perfumes and Cosmetics

Spending on luxury perfumes and cosmetics

Figure 42: Actual spending and maximum spending on luxury perfumes and cosmetics, November 2007

Luxury perfume and cosmetics brands owned

Figure 43: Luxury perfumes and cosmetics brands owned, by gender, November 2007

Figure 44: Luxury perfumes and cosmetics brands owned, by household income, November 2007

Ownership of all types of perfumes brands—female respondents

Figure 45: Perfumes used by female respondents, by household income, 2007

Ownership of all types of fragrance brands—male respondents

Figure 46: Cologne and aftershave brands used by male respondents, by household income, 2007

Stores in which luxury perfumes and cosmetics are purchased

Figure 47: Channels where luxury perfumes and cosmetics are purchased, by gender, November 2007

The Consumer—Luxury Watches and Jewelry

Spending on luxury watches and jewelry

Figure 48: Actual spending and maximum spending on luxury watches and jewelry, November 2007

Luxury watch and jewelry brands owned

Figure 49: Luxury jewelry and watch brands owned, by gender, November 2007

Figure 50: Luxury jewelry and watch brands owned, by income, November 2007

Ownership of all types of watch brands

Figure 51: Most popular watch brands overall, by household income, May 2006-June 2007

Stores in which luxury watches and jewelry are purchased

Figure 52: Channels where luxury watches and jewelry are purchased, by gender, November 2007

Appendix: Trade Associations