A forecast by high-level luxury experts of the luxury market in 2021 shows the future losers and winners of the industry
Author: Luxury Institute New York
In September 2020, the Luxury Institute contacted its Global Luxury Expert Network for the purpose of collecting a so-called Pulse Survey for the luxury market. On the basis of this survey, a forecast was then made about the development of the luxury market in 2021.
The high-ranking professional groups of the interviewees included executives of several dozen of major brands for luxury products and services, as well as industry experts with decades of expertise in the luxury industry. Given the expert status of all participants, their specialist knowledge and their decision-making skills, the findings provide a good overview of the current growth expectations for the luxury market in 2021.
For reasons of data protection, all names and organizations of the respondents must be treated confidentially. Of course, predicting how the economy will perform after the pandemic is a challenge. However, below is the percentage of all experts who predict whether a particular luxury industry will grow, fall or behave unchanged in 2021. In addition, a brief summary of the reasons mentioned.
Experts predict development for the luxury market in 2021
Luxury market 2021 - the winners
Health and Wellness:
2021 vs 2020: 96% increasing, 2% unchanged, 2% decreasing
Main reasons: Pandemic redefines priorities or ignites trends; Switching to proactive and preventive medicine and wellness; Exercises at home; Technological innovation; Health is the new wealth; More boomer spending as well as debt free spending.
2021 vs 2020: 90% increasing, 8% unchanged, 2% decreasing
Main reasons: Essential technologies are increasing exponentially; Needs at home and home office; Increase in health and wellbeing; Innovations drive upgrades; Wearables products; Internet of Things; Therefore resilient against recession.
Wines & Spirits:
2021 vs 2020: 74% increasing, 19% unchanged, 7% decreasing
Main reasons: Home isolation and stress relief; Consumers upgrade at home; Off-premise opens; Celebrate recovery; Thus resilient against recession.
Furniture & home decor:
2021 vs 2020: 68% increasing, 24% unchanged, 8% decreasing
Main reasons: House extensions and upgrades; Focus on the home or home office; The personalization of spaces continues; Follow the real estate trend; Hence low risk of recession.
Perfumes & Cosmetics:
2021 vs 2020: 58% increasing, 29% unchanged, 13% decreasing
Main reasons: The need for masks is reduced by the vaccine; Online sales continue to grow as well as repeat purchases; Asia is recovering; Global Reopening; Simple joys; Thus resilient against recession.
2021 vs 2020: 56% increasing, 42% unchanged, 2% decreasing
Main reasons: House extensions and upgrades; Technological innovations encourage upgrades; More time to cook at home; Need for a new home office or improved office; Home entertainment; Vaccine slows demand; Hence lower risk of recession.
2021 vs 2020: 53% increasing, 27% unchanged, 20% decreasing
Main reasons: Urbanization and new focus cities; Low interest rates; Low supply; Conversion of urban commercial real estate to residential real estate; Lower risk of recession with little supply and low rates, but still at risk due to foreclosure and recession opportunities.
Luxury market 2021 - the losers
2021 vs 2020: 46% decreasing, 36% unchanged, 18% increasing
Main reasons: Fear of shopping in stores remains, hence preference for online shopping; Less tourists; Lack of relevance; Lack of uniqueness; Bad customer experience; Second wave of illness; Bankruptcies; Vaccine is needed; Challenges therefore remain long-term.
Related topics: Top 6 brands for augmented reality shopping
Luxsmarkt 2021 - The midfield
Travel & Gastronomy:
2021 vs 2020: 42% increasing, 34% decreasing, 24% unchanged
Main reasons: Category most affected by the pandemic due to travel bans; So it can only get better; Risk of possible second pandemic waves; Minor business trips persist; Therefore only a slow recovery is expected.
2021 vs 2020: 44% unchanged, 36% increasing, 20% decreasing
Main reasons: Less commuting and traveling; Less public transport; Used cars; Luxury upgrades; Electric cars drive new demand; Thus higher risk of recession.
Fashion & Leather Goods:
2021 vs 2020: 42% unchanged, 41% increasing, 17% decreasing
Main reasons: Less social events; Consumers re-evaluate needs and wants; Casual wear leader; Little travel as well as little tourism; Purchase for investment purposes; Off-set due to socialization; Enhanced digital skills; Pent-up demand; More travel; Few brands are winners; Hence high risk of recession.
Watches & Jewellery:
2021 vs 2020: 41% unchanged, 37% increasing, 22% decreasing
Main reasons: Asia is recovering; Slow travel recovery; Apple Watch Effect; Jewelry is better off than watches; Purchase of personalized items; Few big winners; Hence high risk of recession.
Summary for forecast over the luxury industry
Nobody can predict the exact course of the pandemic and its short- and long-term effects on the economy. But the past has shown that resilience and ingenuity of humans are driven by the urge not only to want to survive, but also to want to prosper.
Some branches of the luxury market grew by sheer luck, others were just as unlucky. However, the past has shown that the cumulative wisdom of experts has a stronger predictive power than that of individual forecasters.
Source: Luxury Institute