High-end streetwear helped boost global sales of luxury personal goods by 5 percent this year to an estimated 263 billion euros ($309 billion), according to a new study released Wednesday by consultancy Bain & Company. After two years of flat growth, Bain said the sector is entering a period of stability, with the same 5 percent growth projections through 2020.
“Customers are becoming younger, and that is very good for the mid- and longer-term survival of this industry, since the younger generation seemed to be a little detached from luxury brands,” said Federica Levato, a partner at Bain & Company, ahead of the study’s release for the Altagamma association of luxury Italian producers.
Fashion houses have been actively courting millennials in recent seasons, inviting social media and celebrity influencers to their front rows as part of their communication strategy. But it has taken streetwear to catch the interest of Generation Z (those born after 1995) and millennials (the generations that follows), whether it be graphic Off-White or Vetements sweatshirts or bags from the likes of Louis Vuitton and Supreme, which collaborated this spring to much fan fury (and also a bit of dismay), or Burberry and Gosha Rubchinskiy, another recent collaboration of note.
“There is a big market of 2.5 million euros for luxury t-shirts, for example, that is growing very fast. And a half-a-billion-euro market for rubber sliders, which is very unusual in this market,” Levato said.
While street wear has proven to bring the next generation of consumers into the luxury fold, it is a double-edged sword. “Streetwear is a macro-trend in all geographies” that represents a state of mind and transcends generations, Levato said. “We think it is more about how people live their lives and how people like to dress vis-a-vis 10 or 15 years ago, when work wear was more formal.”
But it can be easily copied by producers of fast fashion. To counter that, Levato said, luxury brands are putting more emphasis into branding activities including Instagram stories, creating relationships with influencers and making stores unique in each city to attract both tourists and domestic shoppers.
“Once it was all about beautifying a product. Now product is just one of the many levers you use to maintain and capture your customer,” she said.