Sales of luxury goods will fall by 20% to 35% this year as the coronavirus-related slowdown is set to continue, Bain & Company predicted.
Purchases of luxury items already dropped by approximately 25% in the first quarter, and the slump is likely to accelerate in the second quarter, Bain said in its global luxury report, which it released in collaboration with Italian luxury-brand committee Altagamma.
Bain predicted the market would not return to 2019 levels until 2022 to 2023. From that point, growth will resume gradually, with annual revenues reaching approximately EUR 320 billion to EUR 330 billion ($347.07 billion to $357.91 billion) by 2025.
However, online sales have been strong during the pandemic, with purchases continuing to increase, Bain reported. E-commerce could account for up to 30% of the market by 2025.
“The speed of future market growth will depend on luxury players’ strategic responses to the current crisis and their ability to transform the industry on behalf of the customer,” said Federica Levato, a partner at Bain. “As consumers slowly emerge from lockdowns, the way they see the world will have changed and luxury brands will need to adapt.”
The brands that devise creative ways to attract customers to their stores, or to get their product to the consumer, will see the most growth, Bain stressed.
