The luxury market has experienced growth over the last several years, thanks in part to a recovering economy and booming online sales. In 2013, US luxury revenue reached $35.9 billion – a 60% increase over 2009, while the global market increased by 57% over the same period to reach $167.1 billion. This report focuses on how and why consumers are driving this growth. It discusses their definitions of luxury, purchasing habits, attitudes, and their lifestyles. The report also covers several hot topics within the market, including social media, e-commerce, knockoffs, customization, discounted luxury, multi-level strategies, and luxury product rentals. The resulting analysis provides a strong foundation for new-to-luxury marketers, but also deep, thought-provoking content for more seasoned professionals.

Readers of this report may also be interested in Mintel’s Asian American Premium Brand Consumers – US, June 2013 and Luxury Goods Retailing – International, August 2014.

The concept of luxury goods is inevitably highly subjective. It is usually obvious where a product is luxury and equally obvious where it isn’t, but there is a gray area in between that is more subjective.

The term luxury usually carries with it the idea that a very high level of craftsmanship is involved and that the products carry a high price so that they are out of the reach of most mass-market buyers. Unfortunately, they can also carry connotations of ostentation and even “bling.”

In Mintel’s analysis, there are three main categories of luxury goods, to which a miscellaneous group of smaller products is added:

• Fashion and leather goods;

• Fragrances and cosmetics;

• Jewelry and watches; and

• Other (ie writing instruments, eyewear, furniture, home goods, and other miscellaneous items).

Food, beverages, tobacco, electronic goods, automobiles, and services such as travel are generally excluded.

Value figures throughout this report are at rsp (retail selling prices) excluding sales tax unless otherwise stated.

• Market Size: The Mintel market size is calculated from the aggregated turnover of luxury brands in the retail context, adjusted where necessary to add a retail margin and the sales of smaller players.

• Mintel’s market size is based on the sales of the leading players. Those figures are a combination of sales through directly operated stores, which are consolidated at retail prices, and sales to wholesalers and licensees, which are consolidated at the price the luxury company sells to them. In order to estimate the retail value of the market we need to add a retail margin to the wholesale value. Retail markups were estimated.

• Leading Companies: Unless otherwise noted, all information presented about a company was obtained from the respective company’s website, annual report, or SEC 10-K filing (where applicable).

For the purposes of this report, Mintel commissioned exclusive consumer research through Lightspeed GMI to explore consumption of luxury goods and attitudes toward luxury products and services. Mintel was responsible for the survey design, data analysis, and reporting. Fieldwork was conducted in September 2014 among a sample of 2,000 adults aged 18+ with access to the internet.

In addition to the general market sample, Mintel includes an augment sample of 500 High Net Worth Women (HNWW) in regard to luxury brand ownership and purchasing. These include women aged 18+ with access to the internet, 250 with $500K-999.9K in household investments, and 250 women with household investments of $1M+. Further, where appropriate, Mintel has included research conducted for its Luxury Goods Retailing – International, August 2014. Fieldwork was conducted in May 2014 among a sample of 2,000 adults aged 18+ with access to the internet.

Mintel selects survey respondents by gender, age, household income, and region so that they are proportionally representative of the US adult population using the internet. Mintel also slightly over-samples, relative to the population, respondents that are Hispanic or Black to ensure an adequate representation of these groups in our survey results and to allow for more precise parameter estimates from our reported findings. Please note that Mintel’s exclusive surveys are conducted online and in English only. Hispanics who are not online and/or do not speak English are not included in our survey results.

Mintel has also analyzed data from Experian Marketing Services, using the Simmons NHCS (National Hispanic Consumer Study) and the Simmons NCS Teen Study.

The Experian Marketing Services, Simmons NHCS was carried out from August 2013-September 2014, and the results are based on the sample of 26,053 adults aged 18+, with results weighted to represent the US adult population. The Experian Marketing Services, Simmons NCS Teen Study was conducted from April 2013-June 2014 and is based on a sample of 1,692 teenagers aged 12-17, with results weighted to represent the US teen population.

While race and Hispanic origin are separate demographic characteristics, Mintel often compares them to each other. Please note that the responses for race (White, Black, Asian, Native American, or other race) will overlap those that also are Hispanic, because Hispanics can be of any race.

In addition to quantitative consumer research, Mintel also conducted an online discussion group among a demographically mixed group of adults aged 18+. This discussion group was asynchronous (ie not run in real time), functioning like a blog or bulletin board, with questions remaining posted for a predetermined period of time. This method allows participants to respond reflectively, at their leisure, or to log off to think about any issues raised, and return later to respond. Participants were recruited from Lightspeed GMI’s online consumer panel with responses collected in October 2014. Relevant quotes are included as stated. However, Mintel corrected typos and grammatical errors prior to publishing.

All estimated mail volume data and consumer direct mail marketing creative are provided by Mintel Comperemedia.

Mintel Comperemedia is a searchable competitive database tracking direct mail, print, and online advertising in the US and Canada, as well as email in the US. Comperemedia tracks information across eight sectors: Banking, Credit Card, Investments, Insurance, Mortgage and Loan, Telecom, Travel and Leisure, and Automotive.

For more information, please contact Account Services Management at 312.450.6353 or www.mintel.com.

The following is a list of abbreviations used in this report:

Generations are discussed within this report, and they are defined as:

* also known as Generation Y or Echo Boomer