Expansion possibilities for luxury retail

17 October 2023

The increase in the number of high-income individuals and the growing weight of the wealthy classes at a global level are the key drivers of the rapid acceleration of the luxury retail market: this is what emerges from recent international research

Conducted by independent research agency Pure Profile on behalf of Communications Specialist Ltd – a world-leading communications technology company – the study involved 50 senior executives from luxury retailers with a total annual turnover of $3.1 billion in Asia, Africa, Europe, United States and South America. The top management interviewed expect annual growth of over 5.6% for the luxury sector over the next four years and say they are confident in the increase in revenues and margins of their company and the market as a whole.

At the basis of this growing confidence, the interviewees note a boost in sales in the luxury sector attributable to a combination of factors: around 80% underline in this market segment the growth of the richest segments globally (which the senior executives recognize in increase in the number of individuals with high income and the growing weight of the wealthy classes in the world); more than half (53%) indicate an improvement in the performance of luxury retailers and the impact of pent-up demand in the pandemic period; around a third (31%) note more personalized customer sales strategies by luxury retailers. Causing 96% of those interviewed estimate that their company's revenues will be higher this year than in 2022; specifically, more than a fifth (22%) expect a 50% increase in revenues this year.

When comparing the results to pre-Covid performance, 96% say their company's revenues will be higher this year than in 2019, while only 4% expect sales to still be below pre-Covid levels. Looking at the market as a whole, 92% say 2023 will perform better than the previous year, and 98% say this year's performance will be above pre-pandemic levels. According to the research, the increase in revenue is not due to a price cut. In fact, around 94% of the executives interviewed say that margins this year will be higher than last year, and 90% that they will exceed pre-Covid levels (and to a significant extent, according to almost 40%).

"The global luxury retail sector is firmly growing, and the market is set to expand by 5.6% per year over the next four years” declares Kevin Buchler, Chief Marketing Officer of Communications Specialist Ltd, who specifies : “The phenomenon cannot be traced back solely to the post-Covid recovery: executives highlight the increase in the number of individuals with high incomes around the world and the refinement of retailers' offerings with a view to greater personalization ”.

Communications Specialist Ltd in brief

With over 30 years of experience, Communication Specialist Limited is one of the world's leading communications technology companies, with a broad range of products and solutions to support luxury retailers and their customers: from sales to assistance, rental, software support, up to the design, training, installation and commissioning of radio systems. “The impact of the growing demand that the study found for luxury retailers is highlighted for us in greater interest from these players, who represent a growing market for secure radio communications and two-way radios” observes CMO Kevin Buchler.