16-02-2019, 11:20 AM
There is some discussion on luxury goods in today's news. In it, a report was cited which provides some data on the players in the luxury good market.
https://www.businesstimes.com.sg/brunch/...ne-pluxury
https://www.luxurydaily.com/wp-content/u...ry2018.pdf
A recurring theme in recent discourse on luxury goods is that 'millennials are seeking experiences, and not just the product.' I take this to mean that the noveau riche demand high quality service on top of the high quality product; not only do they want to seen to be of a higher status, they also want to be given the royal treatment. This is of course, not surprising. For the prospective investor, perhaps the question to ask is whether your target company provides a high level of service.
Another recurring theme is the increase in use of e-commerce/social media as sales and marketing channel. The internet has been around for quite a long time but it is only in recent years that there is a renewed focus on online retailing. The internet did not manage to take a large share of the traditional retail pie as people's time on the internet was then limited to their time spent at home; the internet being primarily accessed through immovable personal computers. Now the internet is carried in almost everyone's pockets, and accessed perhaps every hour or so. Naturally, brands have been competing for increasing eyeballs on the internet. Which has resulted in changing expenses on traditional and new forms of advertising. While e-commerce in general has seen increasing sales volume, the majority of consumers of luxury goods -- who demand the royal treatment -- still make purchases in-store. In other words, consumers of luxury goods want to be engaged both online and offline.
As long as there is a desire for people to differentiate themselves through wealth, the demand for luxury products should continue for a long time. Though it should be noted that an investment into any particular luxury brand probably requires deeper considerations. For one, a perennial concern is how a brand balances exclusivity and sales volume; too much of the former will mean less of the latter, and vice versa, which may then negatively impact demand for said brand.
For those with less insight into the luxury goods market, perhaps it may be easier to prospect companies along the supply chain.
https://www.businesstimes.com.sg/brunch/...ne-pluxury
https://www.luxurydaily.com/wp-content/u...ry2018.pdf
A recurring theme in recent discourse on luxury goods is that 'millennials are seeking experiences, and not just the product.' I take this to mean that the noveau riche demand high quality service on top of the high quality product; not only do they want to seen to be of a higher status, they also want to be given the royal treatment. This is of course, not surprising. For the prospective investor, perhaps the question to ask is whether your target company provides a high level of service.
Another recurring theme is the increase in use of e-commerce/social media as sales and marketing channel. The internet has been around for quite a long time but it is only in recent years that there is a renewed focus on online retailing. The internet did not manage to take a large share of the traditional retail pie as people's time on the internet was then limited to their time spent at home; the internet being primarily accessed through immovable personal computers. Now the internet is carried in almost everyone's pockets, and accessed perhaps every hour or so. Naturally, brands have been competing for increasing eyeballs on the internet. Which has resulted in changing expenses on traditional and new forms of advertising. While e-commerce in general has seen increasing sales volume, the majority of consumers of luxury goods -- who demand the royal treatment -- still make purchases in-store. In other words, consumers of luxury goods want to be engaged both online and offline.
As long as there is a desire for people to differentiate themselves through wealth, the demand for luxury products should continue for a long time. Though it should be noted that an investment into any particular luxury brand probably requires deeper considerations. For one, a perennial concern is how a brand balances exclusivity and sales volume; too much of the former will mean less of the latter, and vice versa, which may then negatively impact demand for said brand.
For those with less insight into the luxury goods market, perhaps it may be easier to prospect companies along the supply chain.