Global luxury apparel market grew by almost a quarter in 2021
The global luxury apparel market is making a strong recovery following the pandemic, growing by almost a quarter (24.2%) in 2021.
Despite economic challenges like inflation, 2022 is predicted to be another strong year for the luxury clothes market. Figures from GlobalData suggest it will grow by 10% in 2022 to reach a value of $149.2bn (£118.8bn). The luxury market is set to significantly outperform the overall global apparel market, which is predicted to grow 8.4% this year.
GlobalData says younger consumers are partly driving the growth in the luxury apparel market, as they perceive the brands in this space as increasingly aspirational. Luxury brands such as Balenciaga and Louis Vuitton have been tailoring products to this younger audience.
From 2022 to 2025, the overall luxury market is projected to grow by 6.7%. The Asia-Pacific (APAC) region will retain the biggest share of the luxury apparel market until 2025. The total luxury market in the region is expected to grow by 7.9% between 2022 and 2025.
The authors of the report say ecommerce destinations for luxury clothing like Farfetch and Net-a-Porter will help drive growth in Europe. Turkey is predicted to be the fastest growing market in Europe until 2025. However, there is a warning that the war in Ukraine could affect spending in the sector across Eastern Europe, as the conflict has knock-on effects in the region.
“Luxury brands have been incorporating more casual and streetwear styles into their ranges, embracing the general casualisation trend sweeping the fashion industry,” says GlobalData’s apparel analyst, Louise Deglise-Favre.
“For example, Louis Vuitton, Dior and Gucci have collaborated on limited edition collections with leading sportswear and streetwear brands such as Nike, Adidas and The North Face during the past few years. These luxury sportswear collaborations have proved extremely popular, especially with Gen-Z consumers, placing luxury brands in an ideal position for growth in 2022 and beyond.”
Retail price inflation at highest rate since 2011
Food and retail prices are continuing to climb as retailers can no longer absorb the “full extent” of increased supply chain costs, according to the latest BRC-NielsenIQ Shop Price Index.
Shop price annual inflation accelerated to 2.8% in May, up from 2.7% in April. This marks the highest rate of inflation since July 2011, well above the 12 and six month average price increases of 0.7% and 1.9%, respectively.
Food inflation rose from 3.5% to 4.3% – its highest rate since April 2012 – with fresh food inflation up from 3.4% to 4.5%. Non-food inflation did decelerate, however, from 2.2% in April to 2% in May.
“The acceleration in food inflation reflects the fact that retailers can no longer absorb the full extent of increased supply chain costs now hitting the industry,” says NielsenIQ’s head of retailer and business insight, Mike Watkins.
“Promotions remain close to an all-time low and price cuts rather than volume-based offers such as multibuy are now the best way for retailers to help their shoppers manage their household budgets.”
The British Retail Consortium (BRC)’s CEO Helen Dickinson adds the situation for consumers is “likely to get worse before it gets better”, as there is “little sign the cost burden on retailers will ease any time soon”.
“While many people will welcome the Government’s latest announcement of support, uncertainty in the future of energy prices means they may only provide temporary respite,” she says.
Cost of living crisis is taking its toll on marketers’ mental wellbeing
Some 50% of marketers say the cost of living crisis is affecting their mental wellbeing.
According to the survey of 1,600 UK working professionals, including 86 people working in PR and marketing, around a third (32%) of marketers think the cost of living crisis will impact their employment, as the rise in prices means they may miss out on an expected promotion while their company looks to manage costs.
Overall, the research finds almost half of surveyed employees (49%) are now living from pay cheque to pay cheque, and more than half (53%) are now saving no money each month.
Nearly three quarters (73%) of all those surveyed feel rising costs are affecting their work life in some way, rising to 85% of workers from a minority ethnic background. Over a quarter (28%) say it is affecting their performance at work, with people from a minority background more likely to feel this affect (36%).
More than one in five (22%) of employees from a minority background feel they may have to change their job as they are unable to cover their living costs, compared to 16% of the broader population. Around a fifth of employees are also considering taking a second job to cover mounting costs (21%).
Meanwhile, 44% of PR and marketing employees surveyed say they prefer working from home as it saves them commuting costs, as 66% report struggling to afford the commute to work.
“It’s heart-breaking to see the devastating effect the cost of living crisis is having on people from all over the UK. But it isn’t affecting everyone equally,” says People Like Us co-founder Sheeraz Gulsher.
“In these tough moments, it is really important not to let equity fall off the priority list, particularly when this data shows that this crisis is affecting those from minority backgrounds significantly more.”
Source: People Like Us/Censuswide
Most connected TV viewers would rather watch ads than pay more
Connected TV (CTV) viewers are generally happier to watch ads than to pay more for their streaming services. More than six in 10 (64%) of the 2,900 adults surveyed say they would prefer to view ads than pay more for their content.
The research comes as global streaming services Disney+ and Netflix, which have both been ad-free, subscription-based services until now, prepare to introduce some ads in exchange for a lower monthly fee.
Those surveyed also express a preference for more relevant ads. Nearly two-thirds (65%) agree that targeted TV ads improve their experience. Over half (57%) of those surveyed also say they find CTV ads to be more relevant than ads on linear TV.
The study finds 96% of linear TV viewers say they watch their favourite shows exclusively through cable or satellite box. However, real-world data from their TV sets showed that only 48% of their viewership actually took place via a cable or satellite box – meaning that more than half of viewers may be watching CTV content without even realising it.
Source: DeepIntent/LG Ads Solutions
Charity campaign effectiveness at its lowest for five years
The effectiveness of charity campaigns has been declining over time, and is now at its lowest point for five years, according to data from more than 135 charity campaigns.
The average effectiveness of charity campaigns peaked at 3.4 effects per campaign in 2019, but it declined to 2.3 effects in 2021, making it below the cross-sector average. Over the past five years the charity sector has generally been above average in its effectiveness compared to other sectors.
According to the five-year average (2017-2021), a typical charity campaign generates 2.9 effects per campaign – making the sector more proficient at generating marketing-based outcomes than the cross-sector five-year average (2.7 effects).
The dip in charity campaign effectiveness in 2021 was particularly driven by a decline in response effects. The average number of response effects halved from 2.6 per campaign in 2020 to 1.3 in 2021.
Campaigns that use multiple marketing channels were more effective at generating brand, response and business effects, finds the research. Campaigns that employ three or more channels generate on average 3.4 effects, compared to those who run with one or two different media who generate an average of 2.7 effects.
The research also finds that ad mail is the most effective channel at driving immediate response for charities (3 effects). TV is the best all-rounder for charity campaigns as it is above average both in driving brand and immediate response effects.
Source: The Data & Marketing Association (DMA)/REaD Group)