Market Overview

Online Luxury Fashion Continues To Grow: 'These New Market Dynamics Spell A Great Deal Of Opportunity'

Online Luxury Fashion Continues To Grow: 'These New Market Dynamics Spell A Great Deal Of Opportunity'

Online luxury fashion is experiencing rapid growth in the United States, according to a new report from The NPD Group. 

The industry has seen nearly a 50-percent increase in dollar sales, with significant growth coming from footwear, accessories and apparel.

“The luxury market is evolving, new brands are getting attention and online retailer platforms are elevating the competitive landscape,” Marshal Cohen, the data firm's chief industry advisor, said in the Jan. 30 report. 

“The younger, multi-ethnic demographic that is more attracted to purchasing designer products online — even more than the average online accessories, footwear or apparel buyer — is a major contributor to this evolution.”

Footwear Drives Segment Higher 

Apparel saw the biggest spending increase within the online luxury market, posting a 17-percent jump to an average of $716 spent per buyer, according to NPD Group.

Nearly half of online luxury fashion dollar sales come from footwear, the report said. Luxury brands are capitalizing on the growing trend of luxury footwear and creating styles that are more casual than ever to appeal to a younger demographic.

“It’s not just about the statement bag anymore; now, thanks to expanded accessibility, the statement shoe is also an area of focus and investment for consumers,” Cohen said. “If we pay attention to what consumers are saying, these new market dynamics spell a great deal of opportunity across the entire luxury fashion market.”

The surge in interest in luxury fashion led French fashion houses LVMH Moet Hennessy Louis Vuitton SA (OTC: LVMUY) and Kering S A/ADR (OTC: PPRUY) to all-time highs in 2018.

The Resale Effect 

The rise in interest in luxury goods is translating to a larger luxury resale market: TheRealReal is reportedly prepping for an IPO in 2019, and online luxury fashion retail platform Farfetch Ltd (NYSE: FTCH) went public in 2018.

Generation Z and millennial buyers have shown an affinity for luxury goods. They're products that may have previously been out of reach, but with luxury resale platforms popping up, the items are becoming more accessible for all consumers. 

Related Links:

Burberry Moves For A Comeback Amid A Renaissance In Luxury Brands

LVMH Enters Luxury Hotel Business With $2.6-Billion Belmond Acquisition

Posted-In: e-commerce Marshal Cohen retail The NPD GroupNews Topics General Best of Benzinga


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