Top Webinar Learnings – A Look at Luxe and Hitwise’s Holiday Preview
Last week, our VP of Research, Glenn Lalich joined Hitwise Senior Analyst, John Fetto, for an interactive webinar that explored the success of today’s top luxury brands online. Using a combination of site visits, brand searches and social reach to measure growth and consumer engagement, we were able to dig into today’s trends that are transforming the luxury space. Not only are there physical changes, which can be seen in the progressive designs and styles coming to life, but also a deeper cultural shift happening inside even the more traditional luxury houses.
Check out some of the top takeaways from the webinar below and view the recording here.
A Brief Overview of the Market
Despite the somewhat lackluster growth in global revenue last year, 2018 looks to be more promising for the luxe category, with sales projected to increase from $289 billion to $313 billion (+8%). 30% of these sales are from within the U.S., meaning it remains the largest luxury market, despite slight decreases over the past couple of years. Confidence in online is on the continual rise, with 9% of those sales coming from e-commerce, with this figure expected to increase to 25% by 2025. Michael Kors, Ralph Lauren and Coach were among the top five brands in terms of online market share, all of which have exclusive offerings, but also significant mid-market lines that reach a broader, less affluent market.
Transformation is a defining theme for the luxury personal goods market in 2018
With disruption taking hold of the sector and the definition of luxury being reshaped by changing consumer demands, we’ve seen more risk-taking happening than ever before, making this year one of the more notable in terms of fresh creative direction. Predicted changes such as a younger demographic of luxe consumers and more personalization across product categories have come to fruition over the last 12-16 months. The biggest story however, is casualwear, which is having a major moment in luxury and being very much driven by new millennial-age creative directors such as Virgil Abloh of Louis Vuitton and Jonathan Anderson of Loewe.
The ‘Casual Luxury Shopper’ has arrived
As streetwear continues to increase in popularity, a new kind of consumer has emerged. What we’ve defined as the “casual luxury shopper” segment totals roughly 500,000, accounting for approximately 5% of luxury consumers today. Aged 18-24, they are 50% more likely to be Gen Z or tail-end Millennials, and show most interest in products like sweatshirts and sneakers. These early adopters are tech savvy and 40% more likely to be celebrity-influenced, particularly by social media endorsements. Although they don’t have significant funds, they do save money to purchase key – lower end items – so they can have a piece of luxury that can ultimately grow with them over time. These types of shoppers are 2.5 times more likely to shop at Supreme, 1.7 times more likely to shop at Fashion Nova and 3 times more likely to shop online at Zumiez.
Luxury has found a home on Instagram
Instagram, a wildly popular platform in luxury and fashion, now holds 51% of the luxury audience across social channels. This uptick very much speaks to the influence of younger demographics, who are drawn to its curated feeds and strong focus on visual storytelling. In fact, many brands now see larger followings on Instagram compared to Facebook, with Chanel, Louis Vuitton, and Gucci securing the top three spots in terms of follower count. We saw particularly high engagement on content that centered around; luxury sneakers, founder stories, celebrities as brand ambassadors, and high-profile collaborations.
Consumers shopping Luxe on Amazon
More frequently, we see the presence of luxury brands on e-commerce giant, Amazon’s, site. Currently, fragrances dominate the marketplace in terms of popular products, Michael Kors has a strong lead in relation to page views (4.4 million), but Versace takes the cake when it comes to bestsellers, with 170,000 registered purchases over the last 11 months.
Furthermore, Amazon is becoming the go-to search engine, at times generating more internal search activity than Yahoo or Bing. When it comes to Amazon, despite not having much of a presence on the platform, Gucci surpasses Michael Kors for branded search share, representing almost a fifth of all branded search mentions amongst the top ten luxury brands online, highlighting that the market can sometimes fail to deliver what the consumer is looking for. This presents a key opportunity for luxury brands looking to expand their distribution channels, though the jury is still out on whether Amazon is truly an ecosystem fit for luxe.
Preview of Hitwise’s Hot Holiday Products for 2018
In the lead up to Christmas, Hitwise will be releasing its weekly Top 10 listings for the most popular product and toy searches. They gave us a sneak preview during the webinar, as well as insight into the top trending fashion products and their respective YoY growth from 2017 to 2018.
Based on search and Amazon data, Nintendo Switch, Vans, Fitbit, Apple Watch, Roku, Xbox, iPhone XR and Instant Pot are some of the Hot Holiday products to watch for in 2018. Some notable fashion products that have seen substantial YoY growth are; the Teddy coat (+526%), Gucci flip flops (+262%) and Men’s hoodies (+219%).