United Kingdom Luxury Goods Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

United Kingdom Luxury Goods Market - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

United Kingdom luxury goods market is projected to register a CAGR of 4.35% during the forecast period, 2022-2027.

Rising purchasing power, internet connectivity, and modern and changing lifestyles are in turn influencing positively the spending pattern of the consumers in the market. The luxury consumer in the United Kingdom has a strong impulsive purchasing driver, which is especially prominent among women and older generations. The millennial generation is noticeably more trend-driven and less routine-oriented, which in turn drives the demand for luxury fashion products including apparel, bags, and footwear.

In the long term, the market is expected to register significant growth in leather goods, owing to the well-established leather processing industry, which allows British designers to design high-end bags, apparel, and footwear by utilizing quality leather.

The luxury goods industry is impacted heavily by COVID-19 due to the closure of retail shops and duty-free shops that generate sales mainly at the airport. Covid-19 acted as a catalyst to change the luxury goods market, online shopping for luxury goods soared, and online channels are set to become the leading channel for luxury purchases in the next 3-4 years.

Key Market TrendsRising Affinity for Vegan Leather Goods

Sustainable fashion is a new concept emerging across many European countries including the United Kingdom. Modern consumers are looking for environment-friendly fashion accessories and prefer more purpose-driven brands. This led to the emergence of sustainable leather replacements made from a variety of materials, including pineapple fibers, apple scraps, palm leaves, and even wine. These materials are designed to resemble the texture and tensility of animal leather, and come in a variety of colors and textures. Therefore, major brands like Hermes, Bottega Veneta, Tommy Hilfiger, Chloé, etc are designing products made up of “vegan leather” to target eco-conscious consumers. For instance, in March 2021, Hermes announced the launch of its vegan bag called Victoria, the travel bag, which is traditionally made of Hermes' gritty Clemence calfskin and is now available in Sylviana, a mushroom-derived leather substitute. Additionally, Tommy Hilfiger recently launched leather shoes which are high-quality leather made from recycled apple peel fibers.

Emergence of E-commerce

With the rising adoption of the digital economy in the country, e-commerce has emerged as an alternate shopping platform for UK customers in recent years, shaping new user interactions, disrupting business models, and creating new growth opportunities for both single and multi-brand stores of luxury goods. Consumers now engage with most brands through their own branded online stores and multi-brand e-tailers.

Moreover, luxury goods buyers are now influenced by the information available on social media and other digital platforms. As a result, leading luxury brands such as Louis Vuitton, Chanel, and Gucci, have been rushing to embrace the digital landscape, whether by partnerships with multi-brand sites, like Farfetch, the creation of their own websites, or a combination of the two. Furthermore, with the improving logistics capabilities, faster delivery, and hassle-free returns, single and multi-luxury brand retailers are making customers feel more at ease with online purchases, which is driving the overall growth of the luxury goods market in the country.

Competitive Landscape

Some of the prominent players identified in the United Kingdom luxury goods market are LVMH, Compagnie Financière Richemont S.A., The Estee Lauder Companies Inc., L'OREAL, and KERING, among others. The brands which are more popular among women consumers are Estee Lauder, Swarovski, Pandora, Chanel, Dior, and Calvin Klein, on the other hand, the brands that are more popular among men consumers are Rolex, Hugo Boss, Calvin Klein, Ralph Lauren, Chanel, and TAG Heuer, among others. New product launches, strategic collaborations, and expansion of online distribution capabilities are some of the key strategies adopted by key industry participants to strengthen the market position and reach a wider consumer base.

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• The market estimate (ME) sheet in Excel format
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