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Summary
The luxury market
Facts, figures, trends
for fashion, accessories, watches, fragrances
Luxury-goods market
Core segments of the market
hold their own
Segments of the luxury-goods market 2008*
by sales worldwide (in %)
Total sales: EUR 175 billion
Generally speaking, garments, accessories, jewellery, watches, fragrances and cosmetics are
considered to be constituent parts of the luxury
market. This viewpoint was also adopted in a
study conducted by Bain & Company on behalf
of Altagamma, the Italian Association of Luxury
Goods Manufacturers. According to this survey,
garments account for around 28 percent of the
market while accessories, fragrances, cosmetics
and ‘hard luxury goods’ (especially luxury watches and jewellery) account for 21 to 23 percent.
The market researchers also counted high-grade
tableware as a small segment of the luxury-goods
market. In a study entitled ‘Global Luxury Retailing 2007’, Verdict defined the market along
similar lines. In this case, however, fashion / garments, fragrances, cosmetics, watches and
jewellery and accessories are joined by furniture
and other product groups.
Tableware (-2%)
‘Hard luxury goods’** (+7%)
4
Garments (+/-0%)
21
28
22
23
Accessories (+5%)
Perfumes & cosmetics (+3%)
* Estimate
** E.g. watches, jewellery
Figures in brackets: Change compared to previous year
Source: Bain & Company/Altagamma
Development of the luxury-goods market
Sales worldwide (in EUR billion)
170
175
159
146
130
134
134
2001
2002
128
134
111
93
98
84
76
Luxury-goods market up in 2008
but decline expected in 2009
In 2008, the volume of sales in the worldwide
luxury-goods markets rose by three percent to
EUR 175 billion. The development of the luxury
market was hampered, in particular, by the financial crisis, the stock-market collapse and severe
exchange-rate fluctuations. For 2009, however,
the experts from Bain & Company anticipate a
decline – the first since 2003. At constant exchange rates, they expect a turnover of between
EUR 163 and 170 billion (172 to 178 billion at
current rates). The largest share of the luxury
market by volume is held by Europe. However,
growth in Europe is currently being fired by the
upcoming countries of East Europe and the
Asian-Pacific region. Tomorrow’s leading markets
for luxury products will include not only China
and India but also Russia and Brazil. According
to the experts from Bain & Company, these
1995
1996
1997
1998
1999
2000
2003
2004
2005
2006
2007
2008*
* Estimate
Source: Bain & Company/Altagamma
Luxury-goods market by regions 2008*
Sales worldwide (in %)
Total sales: EUR 175 billion
Rest of the world (+9%)
5
Asia/Pacific (+15%)
12
38
Japan (-7%)
Europe (+5%)
12
33
America (+/-0%)
* Estimate
Figures in brackets: Change compared to previous year
Source: Bain & Company/Altagamma
1
Luxury-goods market
countries are likely to grow at rates of between
20 and 35 percent over the next five years. In the
future, long-term growth in the wealth of people
in emerging nations and the increasing number
of High Net Worth Individuals (HNWI) will generate new impulses for the luxury market.
HNWI population by countries 2008
Top 10 (in thousands)
2,460
3,019
United
States
1,366
1,517
Japan
810
833
Germany
364
413
China
Wealth in Germany unchanged
362
United
Kingdom
In terms of the number of wealthy individuals,
Germany holds third place in the world ranking.
In 2008, 54 percent of all wealthy people lived in
Germany, the USA and Japan. Moreover, personal wealth and the number of HNWIs in Germany fell less because many rich Germans
pursue a conservative investment policy and
there was no property bubble.
Tourists from threshold countries
purchase more in Germany
213
281
Canada
Switzerland
185
212
Italy
164
207
Luxury orientation
is multi-faceted
2008
2007
131
143
Brazil
Source: Capgemini Lorenz curve analysis (‘World Wealth Report 2009’)
Tax-free shopping in Germany 2008
Share of total sales by countries (in %)
12.8
China
United
Arab
Emirates
8.0
4.1
+7.8%
-2.0%
+22.2%
United
States
2.9
-23.9%
Korea
2.8
-30.4%
Japan
2.3
-19.2%
Brazil
2.0
+12.1%
Source: German National Tourist Board (DZT/Global Refund 2009)
Attitudes towards luxury (in %)
I buy primarily exclusive brands*
I like to shop in exclusive/up-market boutiques*
7.8
8.4
When I go shopping, it sometimes happens
that I spend more money than I intended*
At present, I mainly wear ‘in’ clothing brands**
The significance of luxury differs greatly in the
various segments of the population. For around
50 percent of people, luxury also means the possibility of treating oneself. Fine dining is also
popular among half the population. Many Germans spend freely, especially on fashions, and
then they are inclined to spend more. Around ten
percent are very keen on ‘hard luxury goods’ –
exclusive brands, watches and jewellery.
+37.4%
26.6
Russia
Switzerland
Besides the domestic consumption of high-income Germans, the expenditures of foreign tourists in Germany are also important for the luxury
market. In particular, Russians and Chinese
spend large sums of money during the vacation
period – and, despite the crisis, actually increased
their expenditures in 2008 compared to 2007. By
contrast, travellers from other western industrial
nations, such as Switzerland, the USA and Japan,
spent more carefully in 2008.
491
346
396
France
38.1
10.8
36.8
I enjoy buying clothes*
Watches are an important aspect of my outfit*
Jewellery is an important aspect of my outfit*
The brand is important even if other less well-known
companies offer the same quality at a lower price*
12.3
14.8
13.4
For me, luxury means having time for myself
and to do something for myself**
49.7
I am happy to spend somewhat more
on a meal in elegant surroundings**
49.8
* Agree completely/on the whole
** Applies completely/on the whole
Basis: Inhabitants aged 20 to 69
Source: Communication Networks 13.0 / potential: 49.55 million
2
Luxury brands
Brands are particularly valuable
in the luxury market
The world’s most valuable luxury brands 2008
Top 15 by brand value (in EUR billion)
Louis Vuitton (F)
The brand is the most important asset for manufacturers of luxury products. Hence, it is not
surprising that many luxury brands rank among
the most valuable in the world. The biggest luxury brand, Louis Vuitton, also holds 16th place in
the ranking of all international brands. Gucci,
Chanel, Rolex and Hermès are also brands that
have an excellent reputation in this market and
generate appropriate levels of sales with their
good names.
Europe is the most important region of origin for
international luxury brands. Italy and France are
particularly prominent, as is Switzerland when it
comes to watch brands. Thus, the Swiss Rolex
and Patek Philippe brands also made it into the
ranking. Other leading names include Omega,
Chopard, Longines and TAG Heuer. Of the US
brands, only one brand, Tiffany & Co., managed
to get into the top 15.
16.718
Gucci (I)
6.388
Chanel (F)
4.918
Rolex (CH)
3.836
Hermès (F)
3.541
Cartier (F)
3.278
Tiffany & Co. (USA)
3.257
Prada (I)
2.775
Ferrari (I)
2.730
Bulgari (I)
2.577
Burberry (GB)
2.542
Dior (F)
Patek Philippe (CH)
1.578
0.855
Ermenegildo Zegna (I)
0.633
Salvatore Ferragamo (I)
0.559
Source: Interbrand (‘The Leading Luxury Brands 2008’)
Luxury holdings top the market
Today, many of the most valuable luxury brands
belong to major luxury-goods groups, e.g., Louis
Vuitton belongs to LVMH, Gucci to PPR and
Cartier to Richemont. Others have been quoted
independently on the stock market for many
years, e.g., Hermès, Tiffany & Co. and Bulgari.
Additionally, many luxury brands are still managed
by the founding families or owners, e.g. Chanel
and Rolex, and they provide virtually no information about the development of their business.
Some owner-managed labels, including Prada,
Versace and Salvatore Ferragamo, are considering going public. In view of the current situation
on the financial markets, however, these plans
have been postponed for the time being.
Major luxury groups 2008/2009*
(in EUR billion)
17.19
LVMH
5.42
Richemont
Swatch Group
3.77
Polo Ralph Lauren
3.39
Gucci Group
3.38
Valentino Fahion
Group (Hugo Boss)
2.21
Hermès
1.76
Phillips-Van Heusen
1.75
Armani Group
1.62
Burberry
1.07
* Different business-year periods in some cases
Source: Corporate information, own research
3
Fashion
Luxury fashion market
stagnating worldwide
Luxury garments worldwide
Market volume (in EUR billion)
Women
The worldwide market for luxury fashions has
grown continuously over recent years. On behalf
of Altagamma, the Italian Association of Luxury
Goods Manufacturers, the Bain & Company
market research institute calculated an average
annual rate of growth of 4.5 percent for women’s
fashions and six percent for men’s between 1998
and 2008. In 2008, the rate of growth declined
significantly – to a certain extent as a result of
economic uncertainties but also due to currency
fluctuations.
22.0
2006
Men
23.5
23.6
2007
2008*
23.5
23.5
2007
2008*
22.0
2006
* Estimate
Source: Bain & Company/Altagamma
Development of garment sales
in the retail trade* by quarters (index)
130
Garment trade in Germany
holding its own
120
110
In Germany, the garment trade rang up sales
worth just over EUR 60 billion in 2007. According
to estimates, there was no continuation of this
trend in 2008 and, in view of the crisis, it is unlikely to resume in 2009. A more positive estimate
comes from the BTE trade association and its
estimates show stable results for the first four
months of 2009. However, this does not apply
to the luxury-article segment, which has been
suffering from a fall in demand from foreign customers in Germany.
The most important segment for the German
garment trade continues to be women’s fashions.
In 2007, sales in this segment climbed by around
seven percent according to BTE, so that it accounted for almost half of the entire garment
market. In the men’s wear segment, too, sales
jumped by almost five percent in 2007 so that
boys’ and men’s clothing represented approximately 25 percent of the total. The HML Index for
Sales in the Specialist Trade shows the development of sales in the first four months of 2009.
100
90
92.2
89.0
80
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
* In constant prices
Index: 2003=100
Source: German Statistical Office (Statistisches Bundesamt)
Sales by segments Jan. - April 2009
Change over the same period last year (in %)
Women’s wear
Men’s wear
+8.8
Dresses
Coordinates
+4.9
Knitwear
+4.3
+1.6
Trousers
-0.5
Blouses
Outdoor
jackets
Blazers
Coats
Skirts
Costumes/
trouser suits
Total
women’s wear
Suits
+4.1
Coats
+3.6
+2.2
Knitwear
+0.4
Trousers
-1.7
-5.2
Sports jackets
-0.6
-5.6
Shirts
-1.1
-6.6
Outdoor
jackets
-21.5
+1.2
Total
men’s wear
-2.0
+0.7
Basis: Merchandising systems with annual sales of approx EUR 6 billion
Source: HML Modemarketing
4
Fashion
German fashion industry
in a difficult situation
Sales of the German fashion industry
(in EUR billion)
9.23
As expected, 2008 was somewhat disappointing
for the German fashion industry. According to the
‘textil+mode’ and ‘GermanFashion’ trade associations, there was a decline in the sales of
the country’s garment manufacturers. Although
based on slightly different figures, both associ
ations registered a decrease of 3.5 percent
whereby the biggest falls took place in the major
segments of outerwear, knitwear and underwear.
To date, this negative trend has continued into
the current year, 2009.
One of the main reasons for the sales difficulties
of the German fashion industry is the decline in
exports, which have been affected by the economic crisis since the autumn of 2008. Overall,
exports of garments only remained stable in 2008
with an increase of one percent – a below-average rate of growth in comparison to the German
economy as a whole. In particular, exports to the
EU 15 – especially to important countries such
as Austria, The Netherlands and France – suffered
from the crisis and sank significantly. On the
other hand, there was an increase in exports to
expanding regions such as the eastward expansion of the EU, the Asia / Pacific region and the
Middle East, including the Arabian Gulf States.
2005
9.27
9.23
2006
2007
8.93
2008
Basis: Companies with 20+ employees; from 2007 with 50+ employees
Source: textil+mode trade association
Export development by countries* 2008
Change over the previous year (in %)
Top 5 winners
Slovakia
+76.3
+60.6
Poland
Saudi Arabia
+26.8
PR China
+26.3
Serbia
+24.7
Top 5 losers
-10.8
Estonia
United Kingdom
Spain
-12.9
-13.0
Italy
-14.3
Finland
-14.5
* From an export volume of EUR 10 million
Source: GermanFashion/German Statistical Office (Statistisches Bundesamt)
Garment suppliers in Europe 2007
Sales (in EUR million)
Luxury groups are leaders
in the fashion market
In Europe, some luxury brands and corporate
groups rank among the biggest garment suppliers with international groups being particularly
well represented. In Germany, however, the market tends to be dominated by domestic manufacturers, such as Hugo Boss, Escada, Gerry
Weber, the Ahlers Group (Baldessarini, Pierre
Cardin, etc.) and F.W. Brinkmann (Bugatti, etc.).
4,400
Adidas Group
Esprit
3,250*
Valentino Fashion Group
2,147
Benetton Gruppe
1,956
Triumph Int. Holding
1,504
Burberry Group
1,456*
Multiline
1,443
PPR/Gucci Group
1,347
Tommy Hilfiger
1,340
Only the Brave
1,320
Bestseller Gruppe
1,244**
Max Mara Fashion Group
1,200***
LVMH-Gruppe
Giorgio Armani
Dim Branded Apparel
1,126***
878
850***
* 2007/2008 business year ** Wholesale sales *** Estimated
Source: Textilwirtschaft
5
Accessories
Luxury accessories successful
Market for luxury accessories worldwide
Market volume (in EUR billion)
Over recent years, leather goods and shoes have
ranked among the most successful segments in
the luxury-goods market. According to calculations by Bain & Company on behalf of Alta
gamma, average annual growth in the shoe
segment amounted to around seven percent
between 1998 and 2008. For 2007, the market
researchers noted a dominant trend in the segment – growth was primarily driven by the top
luxury brands. The demand for cheaper and
upcoming brands was significantly lower.
Leather goods
Shoes
20
19
17
2006
2007
2006
2008*
8.2
7.6
7.0
2007
2008*
* Estimate
Source: Bain & Company/Altagamma
Leather-goods trade satisfied
Sales in the leather-goods retail trade 2008*
According to BBE Retail Experts, there is a clear
upwards trend in the German leather-goods
market with sales having risen by ten percent
from 2004 to 2008. And further growth in the small
segment is predicted for the future. For 2008, the
Federation of the German Leather Goods Retail
Trade (Bundesverband des Deutschen Lederwaren-Einzelhandels – BLE) estimates a market
volume of EUR 2.1 billion. In recent years, the
market trend has been towards fashion articles
and leisure accessories. According to the German
Leather Goods and Plastic Products Association
(Bundesverband Lederwaren and Kunststoff
erzeugnisse – BVLK), sales in the German
leather-goods industry were driven by domestic
demand and rose by about one percent in 2008.
By segment (in %)
Total sales in 2008: EUR 2.1 billion
Miscellaneous
Baggage
25
Small leather
goods
30
10
10
25
Business/
school
Women’s handbags
* Estimates
Source: Federation of the German Leather Goods Retail Trade
(Bundesverband des Deutschen Lederwaren-Einzelhandels – BLE)
Sales development in the German shoe retail trade
By quarter years in constant prices (index)
120
Shoe trade stable
117
115
112 113
111
111
109 108
106
The German shoe retail trade achieved a positive
result in 2008 according to figures published by
the German Statistical Office (Statistisches Bundesamt). However, the Federation of the German
Shoe Industry (Hauptverband der Deutschen
Schuhindustrie – HDS) reports a 3.6 percent
decline in sales revenues for 2008, caused primarily by a low level of demand in the domestic
market. By contrast, foreign sales rose slightly.
117
99
83
80
I
2005
83
83
79
II
III
IV
I
2006
II
III
IV
I
2007
II
III
IV
I
2008
II
III
IV
I
2009
Index: 2005 = 100
Source: German Statistical Office (Statistisches Bundesamt)
6
Watches and jewellery
Swiss watches lead the
luxury-watch market
Watch-export nations 2008 (Top 5)
Exports of watch products
Exports of wristwatches
by value (in USD billion)
The most important export nations for watches
are Switzerland, Hong Kong and China. Characteristic of the Asian manufacturers is the bulk
business in quartz watches. In 2008, China exported around 550 million watches, the average
price of which, however, was just two dollars. The
price of watches from Hong Kong rose slightly to
an average of eleven dollars. The quantity exported was also high at around 426 million. By
contrast, Swiss watches are positioned in a completely different segment and are an institution in
the international luxury market. Switzerland’s
watchmakers have a long tradition. They use the
finest, top-grade materials and are characterised
by great precision and craftsmanship, especially
in the case of mechanical watches. And this is
reflected in the average price per Swiss watch
exported, which was EUR 563 in 2008 when
Swiss watches continued their triumphal worldwide advance with an increase in both the value
and quantity of watches exported, especially
high-quality mechanical wristwatches. However,
sales declined in the first months of 2009. As well,
no export increases could be achieved in the
upcoming regions of Asia.
by quantity (in million)
15.8
Switzerland
7.1
Hong Kong
425.8
Hong Kong
2.7
China
550.3
China
Switzerland
26.1
12.9
France
1.5
Germany
Germany
1.5
USA
6.4
Source: Association of the Swiss Watch Industry (Verband der Schweizerischen Uhrenindustrie FH)
Exports of Swiss wristwatches
by value and quantity
15.9
14.8
Value (in CHF billion)
Quantity (in million)
12.7
11.4
9.3
24.4
10.1
24.9
25.9
24.4
26.1
24.9
6.2
4.7
10.2
2003
2004
2005
2006
2007
2008
Jan.-May
2008
7.7
Jan.-May
2009
Source: Association of the Swiss Watch Industry (Verband der Schweizerischen Uhrenindustrie FH)
German watch industry
feeling the pinch
Sales* of the German watch industry
(in EUR million)
627.5
581.0
The German watch industry was unable to generate an increase in sales over recent years and, in
2008, they fell to just over EUR 500 million. According to the Association of the Jewellery and
Watch Industry (BV Schmuck + Uhren) on the
occasion of the Inhorgenta fair, developments
were generally positive in the first three quarters
of the year before the impact of the crisis was felt
in terms of a decline in the number of orders
received, as well as postponements and cancellations, especially on the export side.
541.2
501.6
2005
2006
2007
2008
* Estimated on the basis of companies with 20 or more employees (50 or more from 2007)
Source: Association of the Jewellery and Watch Industry (BV Schmuck + Uhren)/
German Statistical Office (Statistisches Bundesamt)
7
Watches and jewellery
2008 was a good year for
the German jewellery industry
Development of sales of the German
jewellery industry* (in EUR million)
792.4
Despite the influence of the financial and economic crisis, Germany’s jewellery manufacturers
were once again able to boost their sales, which
rose to around EUR 807 million in 2008, an increase of approximately five percent. The Christmas business was also satisfactory in 2008. In
view of the current crisis, however, the jewellery
sector is taking a somewhat pessimistic view of
the immediate future. Exports of jewellery from
Germany were also good in 2008 and rose by
eight percent to EUR 884 million. The most important importers of German jewellery were EU
countries and members of EFTA (Iceland, Liechtenstein, Norway and Switzerland). The situation
is different in the case of imports into Germany
– the bulk in terms of value is imported from
outside Europe with China being a particularly
important producer of costume jewellery.
2004
762.5
769.1
2005
2006
2007
807.0
2008
* Estimated on the basis of companies with 20 or more employees (50 or more from 2007)
Source: Association of the Jewellery and Watch Industry (BV Schmuck + Uhren)/
German Statistical Office (Statistisches Bundesamt)
Imports/exports of jewellery 2008
Share by region (in %)
Total exports:
Total imports:
EUR 884.3 million (+8.5 %)
EUR 774.4 million (+3.1 %)
Other
countries
Other
countries
EU
30
Precious materials generate
the greatest sales
24
44
EU
61
9
Rest of
Europe
According to an analysis by BBE Retail Experts,
there is also a trend towards polarisation in this
market with the most successful brands being
those in the uppermost segment, e.g., belonging
to LVMH and Richemont. Also successful at the
other end of the spectrum are suppliers of inexpensive costume jewellery, such as Bijou Brigitte
and beeline. However, this only reflects the development of the individual segments of the
jewellery to a certain extent because the high
price of gold and platinum means that jewellery
made of these materials accounts for the biggest
share in terms of sales. The demand for jewellery
made of precious materials remained high at the
beginning of 2009 with less but more expensive
jewellery being purchased. In times of crises,
investors and buyers bank on goods of lasting
value and the high price of gold continues to
support this trend. Silver jewellery holds a stable
ten percent of sales.
757.6
6
EFTA
6
Rest of
Europe
20
EFTA
Source: Association of the Jewellery and Watch Industry (BV Schmuck + Uhren)/
German Statistical Office (Statistisches Bundesamt)
Product groups of the German jewellery
industry 2008* Share (in %)
Silverware
Fancy jewellery
5
Costume jewellery
3
6
Silver jewellery
10
76
Gold and platinum
jewellery
* Estimated on the basis of nine months and companies with 50 or more employees
Source: Association of the Jewellery and Watch Industry (BV Schmuck + Uhren)/
German Statistical Office (Statistisches Bundesamt)
8
Perfumes & Cosmetics
Growth in the world market for
luxury fragrances and cosmetics
Market for luxury fragrances/cosmetics worldwide
Market volume (in EUR billion)
Luxury fragrances
Bain & Company market researchers calculated
that the worldwide markets for luxury fragrances
and luxury cosmetics were worth EUR 18.4 billion
and EUR 22.4 billion respectively in 2008. Thus,
these segments achieved a good average rate of
growth of five and seven percent over the years
from 1998 to 2008. In this connection, perfumes
and fragrances were driven, in particular, by successful product launches combined with fierce
competition and massive advertising.
Luxury cosmetics
21.8
21.0
17.0
2006
18.0
18.4
2007
2008*
2006
2007
22.4
2008*
* Estimate
Source: Bain & Company/Altagamma
Perfumeries are optimistic
Development of perfumery sales 2008
The trade with fragrances and cosmetics in Germany announced a slight decline of less than one
percent for 2008. Although the previous year
started strongly, this was followed by several
poor months and, in particular, a disappointing
Christmas season. Nevertheless, the Perfumery
Association (Parfümerieverband) is taking a cautiously optimistic view of 2009 because crises
have been good for Make-up & Co in the past.
Market for body-care growing
Share
Total
EUR 2.67
billion
Decorative
cosmetics
13.8%
Miscellaneous
13.4%
Face care
21.8%
Body care
6.1%
Women’s
fragrances
29.3%
Men’s
cosmetics
15.8%
Change compared to previous year (in %)
+0.7
+2.7
+1.0
+0.6
+0.2
-0.3
-1.2
Source: German Perfumery Association (Bundesverband Parfümerien e.V.)
By and large, the beauty and care industry was
satisfied with business in 2008. Expenditures on
body-care products rose to EUR 12.6 billion. The
most growth was achieved in the fields of dec
orative cosmetics and deodorants. According to
calculations by the Association of the Body Care
and Detergent Industry (Industrieverband Körper
pflege- and Waschmittel – IKW), Germans spent
EUR 153 each on body-care products, an increase of three euros over 2007. Luxury cosmetics grew equally in 2008. According to figures
published by the VKE cosmetics association,
which represents around 50 German manufacturers and distributors of selective cosmetics, sales
of companies with medium to high-priced cosmetics rose by 1.9 percent to EUR 1.7 billion.
German market for body-care products 2008
by segments (in %)
Soaps / syndets Other body-care products
Deodorants
1.7 3.1
5.4
Hair-care products
Bath/shower products
24.1
6.7
Men’s
cosmetics
Women’s
perfumes/
fragrances
7.0
7.7
23.2
10.5
Skin-care products
Dental/oral-care
products
10.6
Decorative cosmetics
* At consumer prices
Source: IKW Working Group market estimate
9
The future of luxury goods
The evolution of luxury
Facets of luxury
The trend analyses in the market concentrate on
the most important of these market segments
and attempt to do justice to the various facets of
luxury. Characteristic of modern luxury is that it
is, on the one hand, accessible to an increasingly broad range of socio-economic groups
(“democratisation of luxury”) and, on the other
hand, increasingly dependent on belonging to a
specific group (“niche luxury”). Besides the assertive demonstration of status by those who
want to document their ascent in the material
world (“climber luxury”), there is the boundless
luxury of the super-rich (“super luxury”). More
sensitive souls, for whom this showing off is repugnant, withdraw into private worlds of luxury
where intimate connoisseurship counts (“connoisseur luxury”). New mechanisms are being
tried to create exclusiveness (“artificial shortage”).
And, finally, there is a trend towards luxuries that
are fully decoupled from goods and can only be
satisfied by services (“immaterial luxury”).
Z_punkt The Foresight Company is a firm
of consultants for strategic questions relating to the future, which has been supporting companies and public authorities
in the fields of strategy, innovation and leadership since 1997.
The Z_punkt consultants combine a strategic approach with the
results of research into trends and the future, and help decisionmakers to cope with present-day problems without forgetting to
make preparations for the future. Z_punkt works for companies
in the service, high-tech and consumer-goods sectors and has
great expertise and experience in various markets.
Z_punkt is responsible for the chapter on the future of this
market analysis. The chapter was written by Klaus Burmeister
and Björn Theis.
Luxury trends
by the size of the individual target groups
Super
luxury
Connoisseur
luxury
Size of the consumer group
Luxury is closely connected with shortage on the
one hand and desirability on the other. People
are prepared to spend a lot of money on anything
that fulfils both criteria, is difficult to achieve and
coveted. In view of the fact that both the availability and desirability of goods and social tastes
change in the course of time, the notion of luxury is subject to a constant process of change.
Through developments, such as the constant
growth in affluence, the collapse of traditional
family structures and lifestyle diversification,
luxury became an extremely heterogeneous and
individual phenomenon in the second half of the
20th century. For the future, it can safely be assumed that the homogenous luxury market is a
thing of the past and that the sector will be
dominated by a variety of market segments, all
very different in character.
Z_punkt The Foresight Company
Artificial
shortage
Immaterial luxury
Niche luxury
Climber luxury
Democratisation of luxury
Source: Z_punkt
Localisation of trends by availability
and material/immaterial aspects of luxury goods
Purely
material
Super luxury
Climber luxury
Democratisation
of luxury
Niche luxury
Extreme
shortage
Moderate
shortage
Connoisseur luxury
Artificial
shortage
Immaterial
luxury
Purely
immaterial
Source: Z_punkt
10
Advertising market
Advertising expenditures of the
clothing sector increasing
Fashion & accessories market
Development of advertising expenditures (in EUR million)
579
According to Nielsen Media Research, the gross
amount spent on advertising in above-the-line
media in 2008 amounted to around EUR 567
million for the fashion & accessories market as
defined here. This represents a drop of six percent
compared to 2007. In the first half of 2009, the
market grew, also by six percent. This growth is
due almost solely to the clothing segment and,
in particular, clothing stores, which significantly
increased their advertising to a total of EUR 197
million, an increase of almost 30 percent over the
same period the previous year. Most of this
growth can be traced back to the Peek & Cloppenburg fashion chain, which now is close on the
heels of competitor C&A. However, despite cuts
of six percent, C&A remains the top advertiser in
this segment with expenditures of EUR 47 million.
While clothing stores spend more than half of
their budgets on newspaper advertising and a
quarter on television commercials, the rest of the
fashion and accessories sector prefers to invest
in consumer publications.
Hope pinned on advertising for
the Christmas season?
605
580
Mail-order trade, textiles/shoes
Textile stores/department stores
Range advertising, textiles/garments
Corporate image advertising
Leather goods & accessories
Shoes
Underwear & stockings
Clothing
567
507
294
276
2004
2005
2006
2007
2008
1st half
of 2009
1st half
of 2008
Source: Nielsen Media Research (gross advertising expenditures)
Fashion & accessories media mix
1st half of 2009 by segments (in %)
Daily newspapers
Consumer magazines
Cinema
Budget in
EUR million
144.42
Clothing stores
56
Sport/leisure wear
12.85
Shoes
47.06
Range advertising:
textiles/garments
15.64
5
25
3
14
32
4
3
19
9
7
81
16
Underwear
3.99
16
Textile stores/
department stores
4.61
1
1
14
1
12
8
15
7 1
42
69
11
7
62
3
2
78
55
8
9
20
51
20
6.14
16.34
Posters
57
11
Leather goods
Mail-order trade,
textiles/shoes
Radio
75
20
6.60
Men’s wear
TV
Internet
14
21.38
Women’s wear
Trade magazines
12
2
3
26
11 1
24
Source: Nielsen Media Research (gross advertising expenditures)
Companies in the clocks, watches and jewellery
sector boosted their expenditures on advertising
for the third year running in 2008. On this occasion, however, the increase of six percent was
more moderate than in previous years. Although
advertising for clocks and watches – especially
by luxury watch makers – accounts for over 60
percent of total advertising expenditures in the
sector, jewellery manufacturers are catching up.
In the first half of 2009, the advertising market
shrank by more than 25 percent compared with
the first half of 2008. Given, however, that businesses run around 40 percent of their advertising
in November and December, it will not be possible to assess advertising expenditures for the
year until after Christmas 2009. Around 90 per-
Watches & jewellery market
Development of advertising expenditures (in EUR million)
Miscellaneous*
Jewellery
Watches
113
106
89
78
77
44
32
2004
2005
2006
2007
2008
1st half
of 2008
1st half
of 2009
* Jewellery shops, range advertising, wristwatches, internet: watches & jewellery, miscellaneous
Source: Nielsen Media Research (gross advertising expenditures)
11
Advertising market
cent of all advertising appears in the print media
with consumer publications holding a dominant
position in the media mix. Television commercials
play only a secondary role, a fact from which
other media, such as posters and radio, profited
in the first half of 2009.
Watches & jewellery
Development of the media-mix structure (in %)
2008
Trade
magazines
Cosmetics sector to invest in
advertising against the trend
With an advertising budget of approximately EUR
733 million (gross), the perfumes & cosmetics
market once again increased its expenditures
by about three percent in 2008. Expenditures
fell slightly in the first half of 2009. However, the
individual segments developed differently with
companies increasing their advertising expend
itures for face and body care – especially complete series – by almost 30 percent in 2008.
Advertising for decorative cosmetics was also
raised – by eleven percent in 2008 and nine percent in the first half of 2009. With an increase in
spending of over EUR 15 million (up 63 percent)
in the first half of the year, care products and
cosmetics are most probably responsible for the
fact that overall expenditures fell only slightly.
Perfumes and fragrances, the second biggest
segment after face care in terms of advertising
expenditures, declined in 2008 and the first half
of 2009. Most companies attach great importance
to advertising, especially in times of economic
crisis. According to VKE cosmetics association,
almost 30 percent of companies in the luxury
cosmetics sector want to maintain their advertising expenditures in 2009 at the same level as in
2008. Another 17 percent plan to increase them.
As in the past, the emphasis is on classic advertising in print media. However, the internet is
catching up quickly and, in this connection, the
sector currently faces a number of challenges in
relation to advertising. Thus, following the fragmentation of the media, consumers are not only
more difficult to reach but are also characterised
by new patterns of consumption via new sales
channels. The result – a further increase in competitive pressure.
1st half of 2009
advertising expenditures: EUR 113.24
Radio Posters
TV
22
1 5
advertising expenditures: EUR 32.40 million
Radio Posters Internet Daily
newsTrade TV
4 1
papers
magazines 2 2 4
21
Daily
newspapers
20
69
68
Consumer
publications
Consumer
publications
Source: Nielsen Media Research (gross advertising expenditures)
Perfumes & cosmetics market
Development of advertising expenditures (in EUR million)
620
2004
733
713
695
Sun/tanning lotions
Face and body-care products
Complete series, care & cosmetics
Corporate image advertising,
body care
Decorative cosmetics
Body care
Face care
Perfume & fragrance samples
626
2005
2006
2007
2008
354
346
1st half
of 2008
1st half
of 2009
Source: Nielsen Media Research (gross advertising expenditures)
Perfumes & cosmetics media mix
1st half of 2009 by segments (in %)
Daily newspapers
Perfumes &
fragrances
Consumer magazines
Budget in
EUR million
61.47
Trade magazines
Cinema
3
TV
32
Face care
128.91
1
36
Body care
49.30
1
34
Decorative
cosmetics
49.29
7.70
Complete series,
care and
cosmetics
39.58
1
Face/body care
2.81
2
Sun/tanning
lotions
6.67
1
1 8 3
1
1
61
2
62
3
11
60
1
59
53
27
13
67
29
25
Posters
61
30
Corporate image
advertising
Radio
Internet
1
11
2
32
64
12
2
9
7
Source: Nielsen Media Research (gross advertising expenditures)
12
Communication
Exclusive target groups
for exclusive products
High level of interest in luxury products
Extremely/very interested (share in %)
Luxury buyers*
(5.78 million)
Exclusiveness is a decisive keyword in the luxury
market. By no means can everyone afford these
expensive, high-quality products – and that’s
certainly not desirable because becoming an
article for the mass market would harm the aura
of such brands. Therefore, advertisers in the
luxury market must ensure they accurately target
consumers who are receptive to their brand and
who fit with its image. For the luxury market defined here, these consumers could be luxury
buyers who explicitly prefer selected brands or
shops. For luxury-watch makers, the very special
target group of premium-watch buyers is of
paramount importance. In the case of wristwatches, these buyers attach particular im
portance to luxury qualities – the watches must
be handmade or come from exclusive and
famous brands.
46.0
Premium-watch buyers**
(8.85 million)
33.6
32.3
27.5
27.4
22.0
26.6
26.3
21.7
20.3
17.8
11.6
Population,
aged 20-69
Fashion
Trends
and
lifestyle
Genuine jewellery Cosmetics,
(gold, diamonds, perfumes,
platinum, etc.) toilet water
Wristwatches
Basis: Population aged 20 to 69 (49.78 million)
* Agree fully/on the whole with “I mainly purchase exclusive brands” and/or
“I like to shop in exclusive/up-market boutiques”
** Extremely/very important aspects for wristwatches: handmade and/or exclusive brand
and/or well-known brand
Source: Communication Networks 12.0
Attitudes to fashion (in %)
Agree fully/
on the whole with:
Population
aged 20 to 69
(49.78 million)
Luxury
buyers*
(5.78 million)
Premiumwatch buyers**
(8.85 million)
17
When it comes to fashion trends,
I’m always up to the minute
51
32
21
I like to try new clothes
45
33
Luxury buyers are keen on fashion
Buyers of luxury products are very keen on
products from the fashion, lifestyle, jewellery,
cosmetics and watches segments and, in the
case of fashions, are particularly trend and brand
conscious. No less than one in two of them keeps
abreast of the latest developments. 70 percent
prefer high-quality products. Moreover, they
attach great importance to a smart appearance
– and accessories, such as bag, watch and
jewellery, which are often sold as matching the
garments of a given fashion brand, are simply
part of this. They also tend towards well-known
brands when buying cosmetics and fragrances.
Premium-watch buyers are also characterised by
a very great affinity to luxury. However, they are
significantly less interested in fashion than luxury
buyers – precision timepieces are their passion.
Premium-watch buyers are interested in watches
for watches’ sake and not as part of their outfit.
11
I always buy clothes
from the latest collection
38
21
The brand is important even
if other, less renowned suppliers
offer the same quality
at a lower price
13
46
31
31
I prefer to buy one high-quality
garment to two cheaper articles
70
49
19
A handbag and/or belt are
important parts of my outfit
41
31
20
Watches and jewellery are
important parts of my outfit
47
37
9
I change my watch to match
the occasion and my outfit
27
20
I frequently buy accessories
(belt, handbag, sunglasses) of
the same brand as my clothing
5
22
16
10
I frequently buy shoes
of the same brand as my clothing
30
23
I frequently buy
cosmetics/fragrances of
the same brand as my clothing
7
26
19
Basis: Population aged 20 to 69 (49.78 million)
* Agree fully/on the whole with “I mainly purchase exclusive brands” and/or
“I like to shop in exclusive/up-market boutiques”
** Extremely/very important aspects for wristwatches: handmade and/or exclusive brand
and/or well-known brand
Source: Communication Networks 12.0
13
Communication
Print advertising appeals
to luxury target groups
“Advertising is credible generally speaking”
Applies fully/on the whole (in %)
40
Luxury brands have to cultivate their image continuously and an important aspect of this is the
choice of appropriate advertising media. Al
though, the two luxury-oriented target groups see
advertising as being more credible than the population as a whole, there are significant differ
ences between the individual media, parallel to
the degree of receptiveness. For both luxury and
for premium-watch buyers, magazine advertisements are the most persuasive with 40 percent
of this target group according advertisements the
highest level of credibility. Poster campaigns are
also rated positively. Less well received is advertising in the electronic media, on television and,
above all, in e-mails and on the internet.
39
33
33
27
32
25
Advertising in magazines
Advertising on television
Poster advertising
Advertising by e-mail
Advertising on the
internet/online services
23
20
16 16
13 14
9 10
Luxury buyers*
Population
aged 20-69
(49.78 million)
Premiumwatch buyers**
(8.85 million)
(5.78 million)
Basis: Population aged 20 to 69 (49.78 million)
* Agree fully/on the whole with “I mainly purchase exclusive brands” and/or
“I like to shop in exclusive/up-market boutiques”
** Extremely/very important aspects for wristwatches: handmade and/or exclusive brand
and/or well-known brand
Source: Communication Networks 12.0
Magazine positioning
Luxury buyers*
Coverage (%)
20
15
Stern
FOCUS-BlueChip-Kombi
Der Spiegel
FOCUS
10
Established media brands score
in the luxury market
Bunte
5
Fit
for
Fun Capital Manager
Magazin
Wirtschaftswoche
Cinema
Gala
FOCUS-MONEY
0
50
60
70
80
90
100
110
120
130
140
150
Men’s
Health
160
Playboy
170
180
Cost per thousand (EUR)
Of the various groups of magazines, news, current
affairs and business magazines are advertising
media of interest to advertisers in the luxury
market. FOCUS and FOCUS-MONEY are popular
with advertisers because they offer excellent
value for money and a clear target-group orientation. For target groups of importance in marketing and strategic terms, they provide extensive
coverage and outstanding cost effectiveness.
FOCUS is distinguished by broad coverage – almost 13 percent – of both the exclusive luxury
buyer and premium-watch buyer target groups.
And, by booking FOCUS-MONEY, the modern
business magazine, in the F OCUS BlueChip
combination, this coverage can be expanded
even more. FOCUS and FOCUS-MONEY offer
advertisers in the luxury market outstanding
planning effectiveness for communicating with
top target groups.
* Population aged 20 to 69 and agree fully/on the whole with “I mainly purchase exclusive brands”
and/or “I like to shop in exclusive/up-market boutiques”
Basis: Top 15 by cost per thousand; affinity >101; title selection (MA-adjusted): Current-affairs magazines,
business press, lifestyle magazines
Format: 1/1 p. 4c bleed (average prices 2009 gross)
Source: Communication Networks 12.0 / potential: 5.78 million
Magazine ranking
Premium-watch buyers*
Coverage
in %
Cost per thousand
(in EUR)
FOCUS
Stern
Der Spiegel
Guter Rat
Wirtschaftswoche
FOCUS-MONEY
Capital
Manager Magazin
Fit for Fun
Neon
Playboy
Cinema
12.5
14.0
13.0
2.3
3.4
1.8
3.2
2.5
2.8
1.9
2.4
1.4
43
44
48
FOCUS-BlueChip-Kombi
13.6
47
69
79
92
97
100
103
109
112
117
* Population aged 20 to 69 and as purchasing criteria for a wristwatch: handmade and/or
exclusive brand and/or well-known brand
Basis: Top 12 by cost per thousand; affinity > 101; title selection (MA-adjusted):
Current-affairs magazines, business press, lifestyle magazines
Format: 1/1 p. 4c bleed (average prices 2009 gross)
Source: Communication Networks 12.0 / potential: 8.85 million
14
Your contacts
Address
FOCUS Magazin Verlag GmbH
PO Box 81 03 07; D-81903 Munich
Arabellastraße 23; D-81925 Munich
Managing Directors
Helmut Markwort
Frank-Michael Müller
Advertising Director
Ingo Müller
(+49) 89 92 50-23 43
Alexander Kirschner (Deputy)
-20 60
Senior Advertising Manager
Michael Mergenthal
-20 76
Fax
-24 94
E-Mail
[email protected]
Assistant
Aynur Civelek
Fax
E-Mail
-24 39
-20 61
[email protected]
Burda Community Network GmbH
Service Manager Journal
Design & Placement
Marlene Gunesch
(+49) 89 92 50-29 51
Fax
-29 52
E-Mail
[email protected]
Representations abroad
Asia (except India, Japan)
Charlton D’Silva
Publicitas Australia
Level 9
215-217 Clarence Street
Sydney NSW 2000, Australia
Phone
(+61) 2 9252 3476
Fax
(+61) 2 9252 2022
E-Mail
[email protected]
Austria
Helmut Weginger
Anzeigenrepräsentanz
Max Schrems-Gasse 5/3/9
A-2345 Brunn am Gebirge
Phone
(+43) 22 36 32 00 68
Fax
(+43) 22 36 32 00 72
E-Mail
[email protected]
Belgium
Peter Landsheere
Publicitas NV
Airway Park D; Lozenberg 23
BE-1932 Zaventem
Phone
(+32) 2 6 39 84 32
Fax
(+32) 2 6 39 84 44
E-Mail
[email protected]
France/Luxembourg
Olivier Berton
Burda Community Network International
Business Centre Opera-Bourse
13-15 rue Taitbout
F-75009 Paris
Phone
(+33) 1 72 71 25 24
Fax
(+33) 1 72 71 25 99
E-Mail
[email protected]
Great Britain
Meike Brunkhorst
factor-m
Unit 102, Canalot Studios, 222 Kensal Road;
GB-London W10 5BN
Phone
(+44) 20 89 64 52 22
Fax
(+44) 20 80 43 14 21
E-Mail
[email protected]
Greece/Cyprus
Christina Skiada
Permedia Athens S. A.
4, Kastorias & Messinias Street
GR-15344 Gerakas
Phone
(+30) 21 11 06 03 50
Fax
(+30) 21 06 61 84 57
E-Mail
[email protected]
India
Vimal Anand
Global Media Network
M-138, Greater Kailash
IN-New Delhi 110048
Phone
(+91) 11 416 38 077
Fax
(+91) 11 292 10 993
E-Mail
[email protected]
Italy
Robert Schoenmaker
Lagardère Global Advertising
c/o Hachette Rusconi
Viale Sarca, 235
I-20126 Milano
Phone
(+39) 02 62 69 44 41
Fax
(+39) 02 62 69 00 10
E-Mail
[email protected]
Italy Tourism
Marina Funedda
Verlags- und Werbeagentur
Bianco Media Service
Gampenstrasse 97/n
I-39012 Meran
Phone
(+39) 04 73 20 06 64
Fax
(+39) 04 73 20 92 87
E-Mail
[email protected]
Japan
Jiro Semba
Intergroup Communications, Ltd.
1-4-16-102 Zaimokuza
J-Kamakura 248-0013
Phone
(+81) 4 67 25 27 63
Fax
(+81) 4 67 25 28 37
E-Mail
[email protected]
Netherlands
Peter Landsheere
Publicitas BV
Mercurius Building, 8th Floor
Herikerbergweg 175
NL-1101 CN Amsterdam Zuid-Oost
Phone
(+31) 20 311 97 10
Fax
(+31) 20 363 28 23
E-Mail
[email protected]
Scandinavia
Kai von Borck
Mandel Marketing & Strategy Consulting
Plan 6
Sveavägen 66
SE-11134 Stockholm
Phone
(+46) 8 50 31 31 35
Fax
(+46) 8 22 20 22
E-Mail
[email protected]
Spain/Portugal
Alfredo Umlauff
SUA Comunicación y Medios S. L.
Jaén, 2 1°G
E-28020 Madrid
Phone
(+34) 9 15 35 80 02
Fax
(+34) 9 15 35 80 19
E-Mail
[email protected]
Switzerland
Robert Langenberger
Burda Community Network International
Balz-Zimmermann-Str. 7
CH-8302 Kloten
Phone
(+41) 44 81 02 146
Fax
(+41) 44 81 02 152
E-Mail
[email protected]
USA/Canada
Salvatore Zammuto
BCN International GmbH
9035 Bluffview Trace
Roswell, GA 30076, USA
Phone
(+1) 770 650 4824
Fax
(+1) 770 650 9036
E-Mail
[email protected]
15