The global luxury fashion market is projected to double in value by 2028, all thanks to three key trends revealed in Arizton’s latest report.
According to Arizton’s “Luxury Fashion Market – Global Outlook & Forecast 2023-2028,” the market is expected to reach $401.73 Billion by 2028.
The report points to a steady rise, with an estimated Compound Annual Growth Rate (CAGR) of 6.14% from 2022 to 2028. Leading the market charge is the Asia Pacific, with Europe, North America, Latin America, and the Middle East & Africa following in descending order of influence and market dominance.
The report sheds light on three transformative trends that are currently reshaping the luxury fashion market and leading it to its success:
1. Introducing AR Technology:
Luxury fashion retailers are already strategically incorporating Augmented Reality (AR) technology to revolutionize consumer engagement.
With the integration of AR experiences, customers can now virtually try on high-end clothing and accessories. This enhances convenience and addresses issues related to fit and style preferences. Moreover, AR enables brands to showcase their products in interactive and captivating ways, crafting a memorable shopping experience. This elevated engagement and customization is expected to significantly boost demand in the luxury fashion sector, particularly among tech-savvy consumers seeking a more refined and interactive shopping experience.
As a result, the adoption of AR technology is set to transform the industry, piquing consumer interest and driving demand in luxury fashion.
2. Travel and Tourism:
The demand for luxury fashion products is profoundly influenced by the travel and tourism industry.
The international purchase of luxury goods is increasingly gaining momentum and adding to the luxury fashion brands’ revenue. More than 45% of luxury purchases are made by tourists, whether in a foreign country or at the airports. Global luxury hotel sales grew by 26.90% in 2022 and, in 2023, are expected to grow by 16.99% more.
The increase in travel & tourism with the opening of the economy is leading to the increasing demand for luxury fashion goods in the market.
3. Adapting to Generational Preferences:
Luxury retailers are meticulously aligning with the preferences of each generation, set to extend their influence over younger demographics in the next six years.
Gen X Prefers Sustainable Fashion and Dominates the Market:
The global Gen X luxury fashion market is poised to reach $153.28 billion by 2028.
Luxury brands actively emphasizing their commitment to sustainability and ethical practices are poised to resonate strongly with Gen X consumers. This demographic values transparency in supply chains, environmentally friendly materials, and a demonstrated dedication to social responsibility.
Millennials and Gen Z Favor Online Shopping and Have the Highest Growth Potential:
The global Millennials & Gen Z luxury fashion market is witnessing robust growth at a CAGR of 7.39% during 2022-2028.
Countries such as China, India, Indonesia, the US, and Brazil house a significant portion of the millennial population, constituting around 50% of the global millennial demographic. Furthermore, Nigeria, India, and Indonesia stand out with the highest Gen Z population. Consequently, these nations present substantial growth opportunities for luxury fashion brands to expand their reach and engage potential customers in the years to come.
Millennials and Gen Z show a strong inclination toward digital channels and a preference for online shopping. Thus, it is crucial for brands to intensify their focus on optimizing online channels and customer service to capture this audience.
For those eager to explore in-depth insights into luxury fashion market trends, the full report is available for purchase here.