A dedicated opinion poll on the most important developments in the Luxury sector in 2023.
Munich, June 01, 2023: Condé Nast publishes the Luxury Industry Report in Germany for the third time.
The first study conducted in collaboration with Publicis Media sheds light for the first time on the consumer behavior of German luxury consumers in the areas of fashion and interiors as well as watches and jewelry against the backdrop of current developments and innovations. 651 adult buyers of luxury brands from Germany were surveyed. The results provide a clear picture of the mood regarding current drivers such as sustainability, diversity, NFTs and metaverse as well as the general desire to consume with regard to current socio-political and economic events.
"In this Condé Nast Luxury Industry Report 2023, which is the third milestone in our 'Condé Nast Germany Luxury ReportSeries', we trace the relevant current issues in the luxury cosmos. For the first time, we have taken a holistic view of the market across our areas of expertise: fashion, interiors, watches and jewelry. Join us on an exciting journey deep into the world of high-end consumption, from the first touchpoint to the completion of the buying process. I promise some amazing and surprising insights from the everyday life of German luxury consumers. Special thanks go to Publics Media, who were a strong partner for this report," says Andrea Latten, Chief Business Officer Condé Nast Germany.
"In our joint study, we very closely examine the implications of the current economic and energy crisis on the local consumer journeys of German luxury target groups and thus provide brands and advertisers with valuable decision-making aids for a contemporary and future-oriented target group approach. A comparably in-depth analysis for the German market has been sought in vain so far, so we are glad to be able to implement this in partnership with Condé Nast, a recognized and established partner in the market for communication with luxury target groups," comments Jennifer Andree, CEO Zenith and Publicis Media Luxe, a dedicated unit from the Publicis Media network.
The following is a summary of the key findings from the report:
Current sociopolitical and economic developments shape the luxury market
Currentsociopolitical and economic developments shape buying behavior in the luxury sector across all sectors. Only 38 percent of respondents said they would not change their purchasing behavior in view of the current economic situation. The propensity to consume increases with age and monthly net household income up to a threshold of EUR 11,499. Above this threshold, it is precisely the top earners (over EUR 11,500) who are adjusting their luxury consumption more strongly again. In comparison, luxury fashion customers in particular are least inclined to forgo purchases altogether, but they do respond more to offers and buy in smaller quantities.
The relevance of sustainability in practice
The topic of sustainability is important across all sectors: for 64 percent of jewelry and watch customers, sustainability aspects play a role in the purchasing process, in the interior sector it is 65 percent, and in the fashion sector 68 percent. The young target group in particular attaches great importance to sustainability: 43 percent of the Gen Z respondents state that advertising sustainability content arouses their interest, even ahead of Gen X and Millennials. Overall, there is general satisfaction across the generations with regard to transparency on environmental and production policies, the reduction of plastic packaging and offers of repair services. The Pre-Owned sub-sector is also becoming increasingly influential in all sectors. More than one in three jewelry and watch customers already owns pre-owned products, in fashion it is around one in four, and in the interior sector one in five. It is precisely here, however, that interest in pre-owned is highest, at 56 percent. Half of fashion customers are also interested in pre-owned fashion and accessories.
Diversity - more than PRIDE
In Germany, diversity is associated primarily with sexuality and gender identity before origin and religion, and less with age and physical and mental abilities. It is therefore not surprising that numerous companies use Pride Month as an opportunity to communicate their commitment to diversity. 66 percent of the luxury customers surveyed perceive the commitment of luxury brands as predominantly positive. At 72 percent, Gen Z is the most satisfied. In principle, 65 percent of luxury customers think that luxury brands should be inclusive and represent the diversity of all customers. The generational comparison shows that the older generations are less likely to rate diversity as satisfactory and to see all customers represented. In particular, the topic of age influences the view of the topic.
Virtuality - NFTs, Metaverse & Co: A Question of Age?
Around 45 percent of respondents consider the expansion into the metaverse to be an important feature for luxury brands, while 41 percent consider NFT offers to be important. With regard to NFTs, Gen Z, Millennials and Gen X largely agree, but the situation is somewhat different with regard to the Metaverse. Here, around half of Gen Z see a relevance for luxury brands; this tends to decrease with the age of the respondents. In general, virtual services such as try-ons and showrooms have become more important for the majority of consumers: The most important thing for luxury brands for 61 percent of respondents is the offer of exclusive events. While the metaverse of tomorrow will bring together physical and virtual reality, it seems promising today to link real moments of encounter with virtual services.
Customer Journey - Luxury customers want to dive deep into luxury worlds
Quality (84 percent), expression of individuality (79 percent) and the offer of exclusive, unique products (75 percent) are important factors across all categories in the decision to buy a luxury brand. The high quality and brand benefit promises are therefore in line with customer expectations, which must also be taken into account in the customer journey. According to the report, this is where the clearest industry differences emerge. Social media plays a key role in the inspiration phase for fashion and interiors. In the watches and jewelry segment, it is the POS and the brand website as well as cross-media fashion and lifestyle titles. In the consideration phase, 69 percent of respondents across all categories consider it important that luxury brands offer a comprehensive experience. Exclusive events are rated highest by 65 percent. For interior customers, consulting and installation services as well as virtual tools that help to customize products or display them in 3D in the home are essential. In the purchase phase, the POS provides the greatest support for purchase decisions across all sectors, although there is potential for expansion in the interior sector, for example through private shopping and fixed appointment options. In the watch and jewelry segment, there is potential for expansion in online stores: 15 percent of respondents are dissatisfied with product availability, and detailed information (17 percent) and customer service advice (15 percent) are also cited as unsatisfactory.
