Designer Fashion - UK - November 2017

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
UK designer fashion sales boosted by tourism
Figure 1: Total spend by overseas residents in the UK, 2007-17
Outlook for UK consumers more challenging
Figure 2: Consumers’ future financial confidence, Jan 2009-Sep 2017
Companies and brands
Pureplays driving online innovation
Increasing focus on digital advertising
The consumer
Purchasing peaks among 16-24s
Figure 3: What designer fashion items consumers have bought in the last 3 years, August 2017
Self-purchasing drives market, but many also gift
Figure 4: Who designer fashion items were bought for in the last 3 years, August 2017
Most only shop every six months or less
Figure 5: Frequency designer fashion items were bought in the last 3 years, August 2017
Departments stores remain popular
Figure 6: Where designer fashion items were bought in the last 3 years, August 2017
Brand ethics are not a priority for many
Figure 7: Important factors when buying designer fashion, August 2017
Price sensitivity among consumers
Figure 8: Attitudes towards designer fashion, August 2017
What we think
ISSUES AND INSIGHTS
Encouraging more frequent purchases
The facts
The implications
Tapping into online fashion shoppers
The facts
The implications
Opportunities to drive higher-value purchases
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
A tougher outlook for UK consumers…
…but the UK’s HNWI population rising
Aging population could impact the market
Uplift in inbound tourism driving growth
MARKET DRIVERS
Rising inflation puts pressure on consumers
Figure 9: Real wage growth – Average weekly earnings vs inflation, Jan 2014-Sep 2017
Consumer confidence weakening
Figure 10: Consumers’ future financial confidence, Jan 09-Sep 17
Number of HNWI in the UK continues to rise
Figure 11: Number of HNWIs in the UK, 2008-16
Changes to the population structure
Figure 12: Trends in the age structure of the UK population, 2014-24
Figure 13: Trends in the age structure of the UK population, 2014-24
Value of Sterling falls following Brexit vote
Figure 14: Selected international currency exchange rates, annual averages, 2003-17
Figure 15: Sterling exchange rate versus selected currencies, annual averages, 2013-17
Inbound tourism boosted by weak Sterling
Figure 16: Total overseas residents’ visits to the UK, 2007-17
Uplift in overseas spending forecast
Figure 17: Total spend by overseas residents in the UK, 2007-17
Average spend per visit declining
Figure 18: Average spend per visit to the UK, 2012-16
Britain a popular tourist destination for French…
Figure 19: Top 20 markets by volume of visits to the UK, 2016
…but Americans account for more tourism spend
Figure 20: Top 20 countries by total amount spent when visiting the UK, 2016
Middle Eastern shoppers spend the most per visit
Figure 21: Top 20 countries by average amount spent per visit to the UK, 2016
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Pureplay retailers gain momentum
Ongoing investment in technology
Transparency increasingly important
More focus on designer menswear
Leading designers shift advertising spend
ONLINE
Online growing share of total fashion spend in the UK
Multi-brand pureplays growing fast
MatchesFashion sales exceed £200 million
Yoox Net-A-Porter strong growth continues
Farfetch GMV up 60% in 2016
Others struggle to create compelling online offer
Avenue 32 closure
Style.com closure
New players in the market
LVMH unveils 24 Sèvres
Oki-Ni relaunches
New standalone e-commerce sites
eBay eyes growth in luxury
Online retailers’ competitive strategies
Improved order fulfilment
Boosting customer experience
The importance of physical retail environment
International expansion
Social media and content developments
Emphasis on exclusivity
LAUNCH ACTIVITY AND INNOVATION
Growing demand for sustainability
Figure 22: Selfridges Material World Campaign, 2017
Capturing consumers with provenance
Figure 23: Burberry Makers House, September 2016
Designer fashion brands get personal
The Store of the Future
Figure 24: Farfetch Store of the Future, 2017
Other store technology developments
Heathrow’s connected mirror
Figure 25: Heathrow’s Connected Mirror, 2017
Harrods’ helps customers navigate its store
The new Rent the Runway store
Messenger service replicates in-store experience
Leading designers serve the underserved
Experiential retail boosts designer store proposition
Figure 26: Harrods Wellness Clinic, 2017
Pop-up retail spaces
Figure 27: The Burberry Balloon at Heathrow, 2017
New demand for made in Britain
High street collaboration trend continues
Figure 28: H&M x Erdem, 2017
Menswear Focus
Figure 29: Harvey Nichols menswear department, 2016
ADVERTISING AND MARKETING ACTIVITY
Louis Vuitton is the highest spending advertiser
Figure 30: Recorded above-the-line, online display and direct mail advertising expenditure on fashion by selected leading designers, 2012-17
Press remains the biggest media channel
Figure 31: Recorded above-the-line, online display and direct mail advertising expenditure on fashion by selected leading designers, 2012-17
Key campaigns
Inclusivity in fashion advertising
Tapping into the new influencers
Campaigns focus on humour and escapism
Changes in French fashion advertising
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
Young people drive the market
Most buy for themselves
Infrequent shoppers
High levels of online purchasing
Quality and fit most important
Trust in designer fashion low
WHAT THEY BUY
Affluent, young people most likely to purchase
Figure 32: Consumers that have purchased designer fashion in the last 3 years, August 2017
Casual clothing and footwear drive the market
Figure 33: What designer fashion items consumers have bought in the last 3 years, August 2017
Women most likely to invest in designer bags
Figure 34: What designer fashion items consumers have bought in the last 3 years, by gender, August 2017
Young people actively buying across categories
Figure 35: What designer fashion items consumers have bought in the last 3 years, by age, August 2017
WHO THEY BUY FOR
High levels of self-purchasing
Figure 36: Who designer fashion items were bought for in the last 3 years, August 2017
Older Millennials most likely to gift
Figure 37: Who designer fashion items were bought for in the last 3 years, by age, August 2017
Affluent shoppers buy for their partner
Figure 38: Who designer fashion items were bought for in the last 3 years, by socio-economic status, August 2017
Gifting higher among parents
Figure 39: Who designer fashion items were bought for in the last 3 years, by parental status, August 2017
FREQUENCY OF PURCHASE
A third buy once a year or less
Figure 40: Frequency designer fashion items were bought in the last 3 years, August 2017
Men shop more frequently
Figure 41: Frequency designer fashion items were bought in the last 3 years, by gender, August 2017
The 25-34s most likely to shop monthly
Figure 42: Frequency designer fashion items were bought in the last 3 years, by age, August 2017
HOW AND WHERE THEY SHOP
Online purchasing almost level with in-store
Figure 43: How designer fashion items were bought in the last 3 years, August 2017
Department stores attract most shoppers
Figure 44: Where designer fashion items were bought in the last 3 years, August 2017
Women more likely to shop via brand’s official website
Figure 45: Where designer fashion items were bought in the last 3 years, by gender, August 2017
Pureplays popular with 25-34s
Figure 46: Where designer fashion items were bought in the last 3 years, by age, August 2017
One in four affluent ABs shop at designer outlets
Figure 47: Where designer fashion items were bought in the last 3 years, by socio-economic status, August 2017
Footwear buyers more likely to shop online
Figure 48: How designer fashion items were bought in the last 3 years, by what they bought, August 2017
Jewellery shoppers buy direct from brand
Figure 49: Where designer fashion items were bought in the last 3 years, by what they bought, August 2017
Retailer loyalty high
Figure 50: Repertoire of where designer fashion items were bought in the last 3 years, August 2017
IMPORTANT FACTORS WHEN PURCHASING
Quality most important to consumers
Figure 51: Important factors when buying designer fashion, August 2017
Women want items to coordinate with their wardrobe
Figure 52: Important factors when buying designer fashion, by age and gender, August 2017
Customer service important to older men
Figure 53: Important factors when buying designer fashion, by age and gender, August 2017
Parents buy into brand names
Figure 54: Important factors when buying designer fashion, by parental status, August 2017
ATTITUDES TOWARDS DESIGNER FASHION
Demand for craftsmanship high
Figure 55: Attitudes towards designer fashion, August 2017
Magazines still inspire older Millennials to purchase
Figure 56: Agreement with attitudes towards designer fashion, by age, August 2017
Men more willing to pay more for British fashion
Figure 57: Agreement with attitudes towards designer fashion, by gender, August 2017
Rental services most likely to resonate with young
Figure 58: Agreement with attitudes towards designer fashion, by age, August 2017
Renting designer fashion – CHAID analysis
Methodology
Online shoppers interested in renting designer fashion
Figure 59: Designer fashion – CHAID – Tree output, August 2017
Figure 60: Designer fashion – CHAID – Table output, August 2017
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology