After decades of progress, the growth of the luxury market is beginning to slow down, forcing the big luxury brands to face up to new structural challenges. The digital revolution, which luxury houses are starting to take seriously, is certainly one of these challenges, but changes in consumer behavior are also causing a major transformation of the sector. These changes include the meteoric rise of experiential luxury…and the increasing fashionability of the “casual.” Between classic style and leisurewear, the “casual” look is informal without being neglected.
This latest trend is one development revealed in the annual study by The Boston Consulting Group, based on surveys of more than 12,000 consumers in 10 countries, conducted in partnership with Fondazione AltaGamma. One statistic worth noting is that two in every three customers on the luxury market seem to be turning away from the classic outfits that previously dominated the collections of the major luxury houses. Faced with this changeover to a more casual style, the big names in luxurywear are having to adapt, anticipating the progressive disappearance of dress barriers in the professional world.
Who is concerned by this trend toward the casual? Everyone. It concerns the older age groups, who can rationalize their declining enthusiasm for formal dress codes — 61 percent of Baby Boomers consider that they are no longer obliged to appear in formalwear, even for occasions that traditionally required it (ceremonies, business meetings, etc.) — and younger people, who are expressing the increased social acceptance of the casual look. In the office, freedom of style is now the norm, and the traditional “suit and tie” is no longer the imperative that it was just a few years ago.
For example, the luxury denim market has provided advance signals of this casual trend. Most major luxury houses have long since integrated jeans in their collections. Subsequently, with considerable boldness, the casual look has entered every part of the wardrobe, from apparel to accessories.
In this respect, the footwear product category has been severely impacted, as is testified by the very strong growth of the sneakers market. The luxury sneakers market attained 3 billion euros, or $3.4 billion, in 2015, three times more than in 2009. The top houses (Chanel, Dior, Louis Vuitton, Valentino, etc.) and specialist shoe designers (Jimmy Choo, Louboutin, etc.) have integrated this trend, in response to the demand of their customers. Eighty-three percent of luxury shoe customers are prepared to spend more than 300 euros, or $336, on a pair of sneakers, and 78 percent of them consider that sneakers, at this price, are luxury goods. In addition, several houses have clearly spotted the commercial opportunity represented by this trend, including the Golden Goose Deluxe Brand, which has specialized in this segment.
After sneakers, the movement that most symbolizes the casual trend is streetwear. Flaunting dress codes that are far removed from the more traditional luxury apparel, this clothing style is nevertheless inspiring artistic directors of the big brands. Now that it has become fashionable, streetwear is progressively leaving the street to take up an essential place on the catwalks.
For example, models dressed in hoodies, puffy jackets and jogger-wear graced Paris Fashion Week for the 2017-18 fall-winter season. The most prestigious luxury houses, such as Louis Vuitton, have even gone so far as to collaborate — spectacularly and successfully — with the emblematic brands of this movement, such as Supreme.
However, casualwear may be a trend that reveals another — namely a shift in consumer perceptions regarding the prices of the major luxury fashion houses. Whichever age group is asked, all consumers point to the excessive price of formalwear (29 percent of all respondents, and 33 percent of Millennials). Customers of the luxury houses are attaching greater importance to the perceived value of their purchases, and therefore paying greater attention to the ratio between frequency of use and purchase price. This is another weak signal that the major houses should not neglect.
Olivier Abtan is head of The Boston Consulting Group’s global luxury sector.
For More Business News From WWD, see:
© 2018 PMC. All rights reserved.