It’s official: Shoppers are over the hype of luxury brands. Due to rising prices and subpar quality concerns, consumers are turning away from highly coveted brands…
Will the luxury goods industry recover?
Why Are Luxury Brands Struggling?
Consumers are beginning to feel so stretched thin by the prices of luxury brands that they’re starting to avoid them altogether.
Luxury brands spent years curating an exclusive image to attract consumers from different tax brackets. Shoppers are drawn to luxury goods because they make them stand out from the crowd…
AND TO STAND OUT, THEY’RE WILLING TO PAY LARGER PREMIUMS.
Over the past few years, luxury brands have expanded their catalogs to offer more affordable products for middle-class consumers, while still being considered luxury.
Products like sunglasses, makeup, and small bags appeal to more shoppers…
IN FACT, MORE THAN HALF OF THE LUXURY INDUSTRY’S SALES ARE FROM SHOPPERS WHO SPEND LESS THAN $3000 A YEAR ON LUXURY BRANDS.
As of late, these brands have been raising prices too fast for consumers to keep up…
Without improving any designs or quality.
Sales of the top luxury brands have dropped 4% from a year earlier. At Gucci, sales dropped 25% in a quarter.Â
Shoppers are done paying for luxury goods at these prices. In China, one of the industry’s largest markets, consumers have been spending less due to economic uncertainty.
Luxury Shoppers Can’t Be Bothered
But around the globe, consumers have made their opinions clear. In a recent analysis of online discussions of luxury brands’ prices…
THE MAIN EMOTIONS IN 60% OF THE POSTS WERE ANGER, DISGUST, OR SADNESS.
Due to the skyrocketing prices…
Shoppers are turning their backs on these brands, instead opting for smaller, more affordable luxuries.Â
For the luxury industry to make a comeback, something has got to give…
At Gucci, the brand replaced their entire creative team to work on a more subtle new look…
But we’ve yet to see if it will work out.
Ultimately, these brands need to increase innovations and quality or slash prices or risk losing their customer base…
Because at the end of the day, consumers don’t really need an LV on their belt…
Be Great,
GCTV Staff
Disclaimer: This content is intended to be used for educational and informational purposes only. Individual results may vary. You should perform your own due diligence and seek the advice from a professional to verify any information on our website or materials that you are relying upon if you choose to make an investment or business decision. Investment, real estate, and business involve great risk and there is no guarantee of performance or results.We are not attorneys, investment advisers, accountants, tax professionals or financial advisers and any of the content presented should not be taken as professional advice. We recommend seeking the advice of a financial professional before you invest, and we accept no liability whatsoever for any loss or damage you may incur.
