The year 2016 is now a month old, and many people have been asking us what happened in the luxury marketplace during 2015. Upscale marketers often promote their luxury and premium products and services to affluent consumers only and, as many readers know, we focus not only on the American luxury marketplace but also on mainstream America, as luxury is not only for the affluent.
The very good news is that, according to our survey, many more Americans, especially the affluent, reported they bought one or more luxury products or services during 2015. Among all American adults, 21 million more consumers bought luxuries in 2015 than in the previous year (67 million vs. 46 million — an increase of 46%). And within that significant growth, the more affluent consumers (those in the $75,000-or-more household-income market segment) showed the largest increase, with luxury purchasers growing from 27 million to 43 million, or a 59% increase, over one year.
The 46% increase among all adults in the buying of luxuries also brought excellent news to the personal luxury goods categories (luxury apparel and accessories, cosmetics, fragrances, jewelry, etc.). Within these markets, the beauty category (premium fragrances and cosmetics) was the most popular in 2015, growing from 20 million to 30 million luxury buyers (a 50% increase), enhanced by its appeal to many mass-market consumers with household incomes under $75,000 (not your usual affluent luxury buying market segment in the United States), 11 million of whom made a purchase in this category.
The largest increase in the luxury personal goods category was again among consumers in the more affluent segment ($75,000+ household incomes), which increased from 18 million to 32 million, an increase of 78%. Within this category, 7 million more affluent consumers purchased designer clothes and accessories in 2015 compared with 2014 (13 million compared with 6 million in 2014), marking a 117% year -over-year increase.
Beyond that, most other upscale categories — including fine wine/beer/spirits, premium home furnishings/art/antiques, and luxury cars/SUVs/trucks — didn’t move the needle upward from 2014 to 2015, with the lone exception being travel (luxury cruises and vacations), which showed 16 million affluent travelers "on board" in comparison with 9 million in 2014, an increase of 78%.
Also, 25 million affluent consumers shopped at a luxury retailer in 2015. This 32% increase (compared with 19 million in 2014) represents 6 million more consumers shopping at luxury retailers in 2015.
Thinking about luxury during 2016, is smooth sailing ahead? It’s our current point of view that there are too many imponderables right now, from global economic concerns, terrorism, the presidential elections, and more, to make any firm predictions. However, the emergence of the less-than-affluent into selective buying of luxury goods and services, along with millions more affluent consumers coming into the luxury market in 2015, should most likely bode well for the American portion of the industry as a whole.