What: Retail X reviews the state of luxury and the macro trends  affecting the industry.

Why it is important: Second hand, sustainability and younger customers are on everyone’s lips.

The global luxury goods market was valued at $354.81 billion in 2023, up from $312.63 billion in 2022. The average revenue per user globally for the sector stands at $46.19 in 2023, up from $41.07 in 2022. Luxury fashion continues to be the largest single segment within luxury, accounting for around a third of total spend in 2023. Growth has been driven by a resurgence in Europe of high-end spenders returning to travel.

Asia leads in revenue generation, contributing $135.2 billion to the total. Europe has seen the largest percentage change in revenues from luxury, switching from a 5% downturn in 2022 to a 25% rise in 2023. The US generates the most revenue per shopper from luxury sales, accounting for $169 per capita. Europe comes in at $135 per shopper, way ahead of Asia at $30 per shopper. Chinese, Indian and Egyptian shoppers all predict that their luxury spending will increase over the coming year.

Millennials make up the largest single group of shoppers for luxury, accounting for 26%. Surprisingly, younger Gen Z shoppers are the second largest group of luxury spenders, accounting for 21%.

The majority of global luxury shopping took place in stores worldwide in 2023, with just 13.9% using online channels. From a revenue point of view, this is consistent by channel across all regions. Of those who shop online, 61% are doing so on mobile, with 76% of Asian shoppers using mobile, compared to 47% of Europeans. This is driven by many luxury purchases taking place during travel. However, growth in younger shoppers in China and India is seeing luxury in Asia becoming an increasingly mobile-centric affair.

Luxury has reinvented itself as a paragon of ethical and sustainable production and many shoppers are starting to increase their spend in the sector as a result. 46% of shoppers were looking to purchase sustainable luxury clothing and 28% second hand luxury clothing in 2023, marking a continuing and growing shift in how luxury is seen as an investment in sustainable living. Not only has the sector embraced sustainable practices, but consumers see buying luxury - and second-hand luxury - as a way to circumvent fast fashion while buying more unique items.

Together with young shoppers embracing luxury brands, the sector is, in 2024, in rude health. The market context section of the report highlights that luxury's post-pandemic recovry accelerates worldwide, driven by affordable luxury, sustainable shoppers and travel. Despite global economic woes, the luxury goods market worldwide has had another stellar year. While the lockdowns and curtailment of travel in 2020 hit the sector hard, it has been surprisingly quick to rebound, surpassing its pre-pandemic 2019 revenues in 2022. What's more, 2023 has seen this growth accelerate, with global luxury goods sales hitting $354.8 billion for the year.The average spend on luxury by consumers worldwide has similarly seen rapid recovery, with 2023 levels of individual spend exceeding pre-pandemic levels by almost 11%, totalling $46.20 per person.

The state of luxury in 2024