Whilst the Asian market and more precisely the Chinese market have long been considered as the new luxury Eldorado, the United States could in reality become the leader in this sector. Your luxury magazine will discuss the characteristics of this dynamic and attractive territory.
The United States, a promising market
Whilst the luxury sector continues to develop itself in Mexico, the United States could become the sector’s new driving power. The country has always been host to famous brands, such as the famous American brand Tiffany & Co. This nation has also attracted the attention of various European brands, encouraging them to export themselves on the continent, as did Hermès, Louis Vuitton and Chanel.
Until recently, the country was far from being considered the driving power of the luxury sector. Nevertheless, the Boston Consulting Group recently announced that the United States could become so, by 2020. An analysis launched by the research department Bain & Co confirmed these facts, demonstrating that the luxury sector’s growth in the country was of 6 to 7% in 2014. Aware of this evolution, Kering’s CEO, Francois-Henri Pinault, declared, “the American market is a key market for the luxury sector and has a great potential”.
The development of the luxury market in the United States draws its origins from its important tourism. The number of foreigners on its territory is constantly increasing as tourists often buy brand goods there due to their lower prices.
Furthermore, more than 1/3 of the planet’s millionaires come from the United States, hence increasing the sector’s growth. Sarah Willersdorf, expert in the BCG research department, confirmed the expansion of the luxury sector in the United States’ but tempers its growth: “the middle class is growing […] Furthermore, Americans consume less luxury products compared to other countries”.
European luxury brands target the States
Until now, European luxury brands are still underrepresented in the United States compared to national brands such as Ralph Lauren, Cavin Klein or Michael Kors. A majority of French and Italian brands continue to make a turnover largely under the one received from the Asian or European market.
To attract more American clients and be closer to their new target market, European brands open more and more boutiques in the country. Since 2012, the Kering group launched about 50 stores in the USA and is planning to open another 10 by 2016.
Nonetheless, European brands still have to adapt to Americans’ consumer habits, to modify their marketing strategy accordingly. Seeing as Americans are particularly present on the internet, luxury brands will need to ensure the quality, easy access and good working of their e-shops. Furthermore, their presence in large department stores such as Bloomingdale and Saks could increase their visibility.
In order to control their image, European luxury brands like Gucci or Louis Vuitton, wish to maintain their stores in large American department stores .