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How has 2022 been for your own high-brand brand, and what are your expectations for the future? There has been a sense in some quarters that many luxury brands have been able to avoid the worst impacts of the current cost-of-living crisis gripping people around the globe, but this might be an oversimplistic reading of the situation.
That much is clear from at least one set of statistics, a report from one digital advertising platform shedding light on how some 24 million UK bank accounts spend money.
Sliding fortunes for high-end brands, but their high-street counterparts are benefitting
In findings that might do a lot to inform your own brand’s luxury marketing strategy, the retail spend report in question – as referenced by the FashionNetwork.com website – stated that there had been a 7% decline in total expenditure on luxury brands during the first half of 2022, compared to the corresponding period of 2021.
Providing further reason for alarm for many prestige brands, was the fact that the number of transactions at luxury brands also went down, by 10%.
Furthermore, the FashionNetwork.com report said that about six in 10 (59%) customers intended to spend less money on luxury brands this year, with approximately half – 58% – primed to switch to lower-priced brands for their clothing and homeware purchases.
Meanwhile, high-street fashion brands saw an 11% increase in spend over the course of 2022’s first six months, in a clear indicator of where customers’ priorities are shifting.
It is a combination of circumstances that might justify the approach some luxury brands have taken of putting up their prices and targeting the higher-spending customers who are less likely to have seen their spending power compromised during the present crisis.
Are shoppers increasingly looking towards pre-owned and cut-price fashion?
For any high-end brand that is currently putting together or fine-tuning a luxury marketing strategy, there are many other figures outlined in the FashionNetwork.com report that make for insightful reading.
It was revealed, for instance, that customers are unsurprisingly being driven towards discounters in the present challenging environment. Brands in this category enjoyed a 12% rise in spend in the first half of 2022, with their transactions going up by 17%.
Of 2,000 customers questioned, 79% said they spent a greater amount on day-to-day outgoings than they did 12 months earlier, and 72% of respondents indicated that they planned to cut back on non-essential expenditure this year.
58% of consumers participating in the study said that they intended to shop more at discount homewares and fashion brands in 2022.
Furthermore, it looks like many shoppers are more and more on the hunt for pre-owned bargains. There was a 7% increase in expenditure on second-hand platforms during the first half of the year, compared to the same period the previous year, alongside a 6% rise in the average number of transactions.
Even more starkly, the period from 2019 to 2022 saw a 482% increase in average spend at second-hand marketplaces. Whereas consumers spent an average of £35.67 on such platforms in 2019, some three years later, this figure had gone up to £207.63.
And with buyers’ heightening awareness of the environmental impact of buying new likely to keep the second-hand trend going strong in the months and years to come, this is a lesson that even many high-end brands may be well-advised to heed. Sure enough, the report added that 34% of consumers planned to purchase more second-hand items in 2022.
Are you looking to more effectively navigate your own business through the present tricky climate for high-end brands, with the help of the optimal luxury marketing strategy? In that case, you might be tempted to contact Skywire London to begin exploring the possibilities for how we could work together.
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