The tenth edition of the Altagamma Consumer and Retail Insight was held today at the Fondazione Cariplo Congress Center in Milan, during which a qualitative analysis of luxury consumers and new trends in retail was illustrated.

The growth of the high-end sector is driven by the highest level of consumers, the Very Important Clients, who become the focus of the brands' attention, representing on average 30% of the brands' revenues and acting as their Brand Ambassadors.

To conquer them, brands must identify them, guarantee the fundamentals of their offer (exclusivity, absolute quality of products and service, experience) and master the essential elements of the relationship with them: hyper-personalisation, careful management of waiting times for unique products, availability of high-level Client Advisors and creation of a sense of community. The impact on consumption at the top of the pyramid is even more significant: Beyond Luxury consumers, with
an annual personal expenditure greater than €50.000, represent less than 1% of total luxury customers, but in terms of spending they account for 21%, more than 200 times the average consumer. Their relevance has doubled compared to 10 years ago.

The importance of Client Advisors is growing, to whom Beyond Luxury consumers tend to bond with a relationship that is sometimes closer than that with the brands themselves: increasingly central and highly professional figures, who must therefore be attracted, trained and retained in the company. On the retail side, luxury is experiencing a continuous escalation, with increasingly larger, unique and distinctive shops, with a rush - on the part of brands - to purchase properties on the main luxury streets of Milan,
Paris, London, New York.

After the introductory speech by the President of Altagamma, Matteo Lunelli, the evidence emerging from the True-Luxury Global Consumer Insight (Filippo Bianchi and Guia Ricci, Boston Consulting Group) and from the Luxury Retail Evolution (Luca Solca, Bernstein) were commented together with Stefania Lazzaroni, General Director of Altagamma, by Scott Malkin, Founder and Chairman of Value Retail; Aldo Melpignano, Founder of Egnazia Ospitaalità Italiana and Vice President of Altagamma for the Hospitality Sector; Antonio De Matteis, CEO and Men's Creative Director of Kiton and President of Pitti Immagine; and Patrizia Cianetti, Global Marketing and Communication Director of Ducati.

At the opening of the conference Matteo Lunelli, President of Altagamma, underlined: “Even in a period of extreme uncertainty and volatility in the markets and low consumer confidence, the high-end segment shows a prospect of growth, albeit moderate. The stability of consumption is supported by Top Clients, who are pushing companies to refine and improve their entire offering, from services to the excellence of their creations. It is significant that 1% of customers account for 21% of spending and that their relevance has doubled in the last 10 years. To meet the expectations of this increasingly demanding clientele, companies will have to continue to invest in technology and in attracting talent with new skills".

CONSUMER FOCUS

The survey True-Luxury Global Consumer Insight (summary attached) was submitted by Filippo Bianchi, Managing Director and Senior Partner, and Guia Ricci, Managing Director and Partner of Boston Consulting Group, proposing in this year's edition a specific focus on top spenders, defined as "Beyond Money", i.e. customers at the top of the luxury spending pyramid.

For the experts of Boston Consulting Group: “The segment of 'Beyond Money' buyers are the most relevant for brands: 500.000 individuals who represent 20-25% of the total luxury market and are growing at 10% every year (CAGR). They are immune to economic cycles and geopolitical crises, consider luxury essential and have spending approximately 5 times less volatile than that of the aspirational buyer segment. Compared to the latter, they have also more than doubled their spending over the last decade. In this group we find the Very Important Customers, who purchase products from 10 brands on average, but are identified and treated as such by only 2 or 3 of these. For this reason, in 70% of cases important opportunities are lost, which could be recovered with a more sophisticated segmentation of the target".

RETAIL FOCUS

The Luxury Retail Evolution study investigates the evolution and prospects of the retail strategies of high-end companies and this year, with the title Store Wars, highlighted the acceleration in the purchase of properties in luxury streets by large brands .

“Over the last five years the major luxury groups have spent around €10 billion in retail, with a strong acceleration in investment in the last 18 months,” he says Luca Solca, Senior Research Analyst, Global Luxury Goods at Bernstein. “The main streets have seen the greatest concentration of these investments: Via Montenapoleone in Milan, 5th Avenue in New York, Champs Elysees and Avenue Montaigne in Paris, Bond Street in London. The topography of luxury retail in these cities is changing. The investments of the most important groups are generating a domino effect, leading those who can afford it to head in the same direction. The perceived risk is that of being excluded from the most important locations, in the same way that this is happening in the best shopping malls in China"