The long-awaited appointment with the Altagamma Observatory, which this year was held in digital format, took stock of the state of the art of the luxury sector at international level with the presentation of the Altagamma Consensus for 2021 and the Altagamma-Bain Worldwide Market Monitor 2020.
The data show that even the luxury market, a sector usually more resistant to economic crises, suffered an unprecedented decline in the year of Covid-19: -20/-22%. For Personal Luxury Goods (fashion, jewellery, accessories, cosmetics), the drop is expected to be around -23% in the base scenario. For 2021, however, a recovery of about 14% on average for personal luxury is expected and a return to positive margins of +23%.
The situation and prospects of the industry and high-end markets have emerged from the studies “Altagamma Bain Worldwide Market Monitor 2020“, illustrated by Claudia D'Arpizio and Federica Levato of Bain & Company, and “Altagamma Consensus 2021“, presented by Stefania Lazzaroni of Fondazione Altagamma.
The present and future scenarios were then discussed by Lorenzo Bertelli (Head of Marketing and Head of CSR, Prada Group), Alberto Galassi (CEO, Ferretti Group), Bob Kunze-Concewitz (CEO, Campari GROUP), Gabriele Del Torchio (Chairman and CEO, Design Holding and B&B Italia), Pier Francesco Nervini (COO North & Central Europe & Global Accounts, GLOBAL BLUE).
Altagamma Consensus 2021
Created by Altagamma with the contribution of the 27 leading international specialised analysts, the Consensus estimates double-digit growth in all luxury sectors in 2021, on average 14%.
As far as distribution channels are concerned, in a normalisation scenario, Physical Retail is expected to grow by +15%, after the drop of -20% in 2020, while for Physical Wholesale (+8%) the situation is more critical. Opposite the scenario for Digital: analysts expect it to continue to grow even faster in 2021, due to an acquired aptitude to buy luxury online even with a wider choice. Both Digital Retail (+22%) and Digital Wholesale (+18%) are expected to grow at double-digit rates.
The analysis on the nationality of customers is interesting: 2020 and 2021 forecasts confirm the solidity of the Chinese as the world's leading luxury consumers: their purchases are expected to grow by +20% in 2021, when there will probably be at least a partial return to travelling outside the country. A moderate recovery in consumption is also expected from Europeans (+11%) and North Americans (+12%), following a sharp drop in the current year (between -20% and -30%).
“2021 will be the beginning of the recovery, although a gradual return to pre-crisis levels is expected from 2022,“ said Matteo Lunelli, President of Altagamma. And then he went on to say “The reactivity of companies to the major changes taking place will be crucial. This requires greater investment and a context that encourages them with public investment in research, training, digitization, green transition. The top of the range can be the driving force behind our recovery if it is placed at the centre of our development strategies and recognised as a distinctive element of Italian Soft Power, the core of our image in the world“.
Altagamma-Bain Worldwide Luxury Market Monitor 2020
Produced by Bain & Company, the Altagamma-Bain Worldwide Luxury Market Monitor 2020 analysed the performance of the luxury goods market in 2020 and showed that this sector fell for the first time since 2009, contracting by 23% and closing at 217 billion euros, the most significant decline ever recorded.
Globally, 2020 turned out to be a year of profound changes in the way we live, how we shop and what consumers seek and appreciate. Tourists have not travelled, changing the way and timing of purchasing luxury products. The online purchase of these goods has grown dramatically, doubling its market share to 23% in 2020 compared to 12% in the previous year.
Consumers are increasingly demanding that brands are attentive to their social impact and luxury companies are expected to demonstrate a real and ongoing commitment to diversity, inclusion and sustainability.
The economic scenarios of the luxury market for 2021 are multiple, with a growth forecast ranging from +10/+12% to +17/+19%, depending on macroeconomic conditions, the evolution of the Covid-19, the speed at which it will return to global travel and the recovery of confidence from local consumers. However, the personal luxury goods market is expected to maintain a sustained and positive growth trajectory, returning to pre-crisis levels by 2022/2023.
“Luxury brands have faced a year of enormous change. However, we are convinced that the sector is able to emerge from the crisis more determined and dynamic than ever before,“ explained Federica Levato, partner of Bain & Company and co-author of the firm. “By 2030, this sector will change dramatically. It will no longer be a luxury industry, but a market of cultural and creative excellence. In this new context, the winning brands will be those that start from their own excellence, while reinventing the future thanks to a rebellious mentality. Luxury players will have to think boldly to rewrite the rules of the game in the sector“.