Fashion brands may be trying to appear more inclusive and entice new customers in the process, but the pool of big-time spenders is still a small and exclusive club. Who are luxury’s “top spenders (or at the very least, someone with great potential,” as the New York Times put it? They could be anyone from “an oligarch’s daughter who hasn’t spent a dime yet,” or for champagne-maker Moet, “an airline or hospitality group that buys 10,000 cases [of champagne] per month … or a wealthy businessman for whom $2 million a year on wines is still not enough.”
“In order to appeal to both new and younger customers, product categories, pricing, social media campaigns, and even store experiences have all been tweaked to appear more inclusive,” Luca Solca, the head of luxury goods at Bernstein, told the Times’ Elizabeth Paton. Hence, the rise in more accessibly priced leather goods, beauty products and fragrances, and footwear, often paired with influencers, collaborations, and pop-up shops.
But even as appearances are changing, “it is still the superrich whose wallets drive a critical chunk of global industry sales.”
Moet, which is part of the $52 billion-plus per year LVMH Moët Hennessy Louis Vuitton empire, is not the only brand where spending is significantly fragmented. Consider Yoox Net-a-Porter. A small amount of the world’s leading online luxury fashion retailer’s active customers generate almost half of its total sales.
According to the New York Times, for the Richemont-owned Italian online fashion retailer – which consists of marquee designer fashion e-commerce website Net-a-Porter, as well as other sites, such as Mr. Porter and off-price retailer Yoox – a whopping 40 percent of sales ($2.35 billion in 2017 (its last reported results due to its acquisition by Richemont in 2018) come from about 3 percent of clients. For that same year, YNAP reported that it had 3.1 million active customers (up from 2.9 million in 2016) – meaning that less than 100,000 consumers were responsible for almost half of its sales.
Given that “less than 1 percent the world’s adult population held almost half of all global wealth in 2018,” according to Credit Suisse’s Global Wealth Report, the fact that such a small group of individuals are behind a bulk of luxury sales should come as little surprise.