back to the list send to a friend print


- 15 Dec 2015
- by
- by

2016 Luxury Industry Predictions From The Experts


Luxury Society spoke with a panel of our Knowledge Partners and industry experts to find out what’s in store for luxury in the coming 12 months.

2015 was a transformative year for the luxury industry across the globe, as new technologies, digital advances, currencies, wealth, media & marketing channels spurred a seismic power shift from brands to consumers, Baby Boomers to Millennials, traditional media to social, and West to East – to name a few.

But how these formidable trends will impact and evolve the industry in the year ahead has remained a mystery – until now.

We spoke with a panel of our Knowledge Partners and industry experts to gauge their predictions for yet another dynamic year in the luxury industry to discover and divulge: How these trends will reshape 2016, what luxury brand executives should keep in mind when planning their future operations, and which regions, consumer segments and currencies are set to rule the luxury sphere next year.

Find out how to join forces with Luxury Society as an official Knowledge Partner and position your business as an undisputed luxury thought leader, contact:

 The luxury industry has flourished for the past 10 years, but the good times have started to stall 

The Luxury Sphere As It Stands

Fflur Roberts, Global Head of Luxury Goods Research at Euromonitor International explains how the most significant trends are set to shape luxury markets and economies in 2016, and which 2015 events will transform 2016.

The luxury industry has flourished for the past 10 years, but the good times have started to stall and brands are now facing a possible power shift from East to West. Nevertheless, at the same time, connectivity will continue to drive new opportunities in digital innovation, with the internet and social media reaching new frontiers.

Our latest data reveal that 2016 will be yet another challenging year for the luxury goods industry. In particular, the economic instability, social unrest, armed conflict and further threats of terrorist attacks in key luxury shopping destinations will continue to act as a drag on sales, not to mention the turmoil on the global foreign-exchange markets which could create further global currency wars for the industry.

Despite these headwinds, our latest data show that the outlook for the luxury goods industry remains optimistic, with sales set to reach US$328 billion by 2016, having increased from US$317 billion in 2015. The new data also indicates that developed markets are largely outperforming emerging markets and that there is a clear shift in spend from East to West.

 We are likely to see the impact of 2015 events filtering through into 2016 with further geographical shifts 

In 2014 and 2015, mainland China posted its lowest growth in sales of luxury goods since our records began (a real decline of -3% and +1% respectively). The slowdown in growth also means that China will not overtake Japan to become the world’s second largest luxury goods market in the world any time soon. Many of the world’s leading luxury brands have felt the backlash of the Chinese Government’s crackdown on lavish spending as well as deeper operational and economic problems across the industry.

Much of the positive global luxury sales momentum witnessed in 2014 and 2015 in the developed regions was actually fuelled by wealthy visiting Chinese tourists. However, after the Chinese government devalued the renminbi in August 2015, China’s foreign spending power has taken a turn for the worse.

Added to that, the Chinese economy is set to continue cooling. These two challenges combined will almost certainly have an impact on the industry’s geographical sales mix, potentially triggering another shift in global revenue power in 2016.


The impact of a weakening economy is unlikely to stop wealthy Chinese consumers from travelling to buy their luxury goods in 2016, but it might change their destination of choice as well as total in-destination spend. Short-haul destinations such as South Korea and Thailand could reap the benefits.

If Chinese consumers cut back on foreign trips further afield, then we could start to see yet another shift in the balance of power between the regions. Spending in North America, Western Europe and Japan could go down, while spending in China could even go up, thanks to price cuts and more people staying at home.

It is difficult to predict how the situation will develop in the future. What we can say, though, is that, according to our new research, 2015 has turned out to be one of the most strategically critical years ever for the global luxury goods industry and we are likely to see its impact filtering through into 2016 with further geographical shift.

 Russia’s geopolitical risks will add further growing pains to the future of luxury sales 

With the backdrop of sanctions and the deterioration of relations with the West, business and consumer confidence in the economy has collapsed to some extent. On the consumer side this (alongside falls in real wages) has contributed to a decline in luxury expenditure; and on the business side a lack of investment and capital outflows.

With the risk of an escalation of geopolitical tensions weighing on the economy, however, confidence is likely to remain fragile.

Once proud to be one of the world’s fastest-growing luxury markets in the world, the big question is whether Russian luxury goods is on the verge of a more sustained slowdown for 2016, as real spending power erodes and as the economy sinks into further recession.

 India will retain its position as the fastest-growing market in percentage terms 

Spurred on by rising prosperity in the major cities and a power shift from the black market to the formal market, India’s appetite for luxury goods continues to go from strength to strength.

While India still ranks just outside the top 20 markets in the world for luxury goods, its rapid advance in luxury goods sales is unrelenting. India is on course to become a US$4 billion industry by 2020, according to our new forecast data.

World Wealth Distribution & Ultra-High-Net-Worth Consumers

Madelaine Ollivier, Senior Luxury Analyst at Wealth-X, examines what 2016 holds for the luxury market with regards to global spending, the Ultra-High-Net-Worth (UNHNW) population and sector preference.

Spending on luxury goods continued in 2015 to be focused within a handful of global cities and driven by a consumer class of global citizens. Beneficiaries of this global movement included brands with a strong presence in luxury capitals such as London, New York and Paris. Brands present at travel retail, particularly at airports, also profited from the growing number of global travellers.

The effect of foreign exchange rates on luxury purchases was a strong driving force in 2015. We see the impact of foreign exchange continuing to weigh in on luxury purchases in 2016.

However, the continual strengthening of currencies such as the US Dollar and UK Sterling may deter tourist shoppers.


Similarly, the threat of terrorist attacks will, we believe, weigh on the minds of some consumers and potentially curb travel rates to certain destinations.

A relative tumultuous macro-economic situation across many emerging markets in 2015 has been one of the contributing factors to a growth in spending on fine jewellery, watches and collectibles.

In 2016, we believe there will be a growing preference for high-ticket items across these categories. Consumers seek assets with a tangible value that will appreciate over time and can be liquidated if needs be.

 One of the biggest Millennial trends that will continue in 2016 is the drive for experience-based spending 

The Millennial Generation & Their Changing Tastes

Jeff Fromm, President of FutureCast looks at the most significant trends to shape the Millennials consumer segment and behaviours of this affluent new generation taking the luxury landscape by storm, and how luxury brands should cater to them in 2016.

One of the biggest trends we are seeing among the Millennial generation that will continue into 2016 is the drive for live events and more experience based spending. Today, one in four Millennials would rather pay money for an experience rather than a product.

Everyone, regardless of age, has that one team or one performer that they follow, track tour dates, memorise team schedules and look forward to the night when they can see all of the action, LIVE.

Millennials are quickly changing the live event industry through the way they research, purchase, experience and amplify these moments. They are looking for brands to not only host these experiences but to also create a frictionless consumer journey from getting the tickets all the way to sharing their pictures on social media. That means easy online access with mobile-first capabilities, connected Wi-Fi at the event and follow up connection points to relive the experience.

 Millennials are a generation that is not only gaining more influence, but also more disposable income 

Implications of this group’s behaviour are evolving the live event experience (before, during and after) for the industry and consumers. They are the generation that equates value to memories and experiences; brands can no longer sell them a product but rather create an experience with them.

Furthermore, Millennials are a generation that is not only gaining more influence, but also more disposable income. As Millennials are entering their peak employment years (the median age among Millennials today is 26), their bank accounts are growing.

Through our research of the affluent millennial population, we found that there are nearly 6.2 million affluent millennial households in the U.S. today and that number is expected to grow in the coming years.

In the past, affluent consumers marked their affluence with luxury products (think Rolex or Hermes). However, as we are seeing the shift towards experiences grow among the affluent millennial population, that mindset is changing. Why buy a $10,000 bag when you can book a trip to Thailand or get front row seats to your favorite concert for the same price (if not less)? This trend will continue to transform and evolve from what we have seen in the past as we enter the new year.


Luxury Media & Marketing Channels In 2016

Neil Cunningham, Managing Director of Cream UK describes the new media and marketing landscape to be forged in 2016, and how it will Impact luxury branding and consumer communications going forward.

In 2015, we saw luxury brands continue to ‘ramp up’ their digital efforts – shifting budgets from offline to online and recruiting more digital talent to their teams.
For many luxury brands, 2016 will see more of the same.  But we think the forward-thinking ones won’t be __ramping up__, they’ll be __integrating__ - placing digital at the heart of their operations rather than just adding more resource to siloed parts of their business.
Luxury businesses need to fully embrace digital because their consumers already have. Globally, 95% of luxury buyers are digitally connected and it’s estimated that 75% of luxury purchased are influenced by at least one digital touchpoint.

 No matter what the market, digital is at the centre of the luxury decision making process 

No matter what the market, digital is at the centre of the luxury decision making process – in fact, research has revealed that Chinese consumers consult more digital resources than UK consumers when making a luxury purchase.
However, the brands which succeed in 2016 will not use the ‘mass market’ template of digital transformation, but will spend time thinking how they can use the tools at their disposal to create a unique digital luxury experience. A couple of developments in 2016 will help them to do this.
Firstly, virtual reality will enter the mainstream with the launch of the first commercial available VR headset from Facebook’s Oculus.  The luxury store is still the most important touchpoint in the decision making process for luxury buyers – VR will enable brands to present a similar experience digitally, enhancing their online experience, extending their reach and potentially cutting their costs.

 Success won’t just come from ‘dabbling’ in VR and AI, but in re-thinking their entire approach to digital 

Secondly, artificial intelligence – delivered by the likes of IBM’s Watson – will become more sophisticated and widespread.  AI will enable luxury brands to harness two sources of knowledge – what they know about their consumers and what they know about their products – to deliver digital service akin to that delivered face-to-face in-store.
But it’s important to note that success won’t just come from ‘dabbling’ in VR and AI, like luxury brands have dabbled with other luxury tools in the ‘ramping up’ phase, but in re-thinking their entire approach to digital across their entire business to create a unique, integrated online experience for their consumers.

That will be the key to success in the coming year.


A New Age: The Latest Generational & Retail Trends

Katie Baron, Spaces & Retail Editor at Stylus investigates the emerging generational and retail trends set to become the next big thing in 2016, as consumer segments, behaviours and luxury shopping preferences undergo major shifts.

2015 witnessed many retail trends that I believe will be sticking around in 2016, notably the editorialisation of retail, the advent of fully shoppable virtual realities, an uptick in ethical attitudes as a driving force not a compromising burden, and the dawn of ‘beta’ (trial-and-error) brand mentalities.

Contextualised, culturally astute and super-socialised commerce were also more widely embraced, as were revised understandings of gender, identity and consumer tribes and ‘fandoms’.

In terms of new, or interestingly evolved trends for 2016, here are some more key predictions:

 The premise is ‘owning over becoming’ which the luxury sector will embrace by connecting their audience 

Shape-shifting spaces: The direct result of brands needing to extend their role and remit as entertainers, educators and also enablers. This will take the form of new collectives, still deeper examples of hybridisation and also concepts attuned to borrowing (such Everlane’s Room Service concept that saw the e-tailer briefly inhabit hotel rooms to take a temporary grip on physical retailing). The premise is ‘owning over becoming’ which the luxury sector will embrace by connecting their audience with increasingly rarefied experiences and access of a highly topical, often intellectual nature.

This inherently connects to the below:

Experiential and exploration-based modes of commerce: That acknowledge a growing desire for experiences over outright ownership, as well as a distinct need for retailers to counterbalance the rising use of predictive analytics and algorithms with concepts rooted in unpredictability, choice, impulse and the exhilaration of surprise. Luxury brands are especially well-placed to exploit this sentiment by investing in cutting-edge technologies that seamlessly blend digital and physical worlds to deliver ultra-immersive forms of explorative retail engagement.

Ephemeral moments and digital delay: Two ideas that illustrate how digital retail must evolve from being synonymous with everywhere, anytime ubiquity to a playing field in which to generate both ‘now-or-never’ moments of absolute shopping hunger and the ‘wait-and-anticipate’ thrill of sustained delayed desire. Staggered releases accompanied by additional layers of rich contextual information (only accessible to elite consumers) and drip-fed content tiered for different brackets of VIP status fans, will all be part of this shift.

 Those that explore a more spiritual, wellbeing-focused outlook – will have a significant resonance 

Spirituality: As the luxury sector continues to attune to an economy motivated by services, experiences and the possibility of personal connections (with the brand but also other brand fans), modes of engagement and even products rooted in a sense of imaginative, meaningful purpose – including those that explore a more spiritual, wellbeing-focused outlook – will have a significant resonance.

The Digital Factor & Luxury’s Challenges

Tamar Koifman, Head of Sales & Marketing and Lead Strategist at Digital Luxury Group looks at the ever-evolving digital sphere and how the entry of new players, fresh channels and changing search behaviours adn technologies will alter the way luxury operates across borders in the year to come.

I think that every single year since at least 2008 has been forecasted as “the year of mobile,” but I believe that in 2015 this finally rang true. For the first time we saw that Google’s mobile search volumes surpassed those of searches via desktop. Companies such as Net-a-Porter (now Yoox Net-a-Porter) reported new records in mobile e-commerce sales and it’s been estimated that mobile commerce now represents 30% of all US e-commerce sales.

On top of that, working with a range of digital marketing luxury execs, I’ve seen that many have finally taken a “mobile first” approach of first designing for mobile interaction, and then making sure it also works on desktop, unlike what was done in past years.

Mobile will continue to be a priority in 2016 but with a more focused look at certain aspects, such as messaging apps.


One of the biggest forces to the digital world in 2016 is the continued growth and sophistication of messaging apps such as WhatsApp, WeChat (mostly in China), Facebook Messenger, and the like.

Luxury brands may wonder what place they have in a world of two friends texting with one another, but if we look at the functionalities quickly being incorporated into these environments, we can see that there is possibility for a real commerce platform.

Today on WeChat it’s possible to: book flight tickets, check your banking account, download product catalogs, order a taxi, find local boutiques, buy products, talk to brand customer service reps, make restaurant reservations, and so much more.

 We’re seeing new functionalities being rolled out by the minute, with full integration expected by 2016 

This advancement in China hasn’t been lost on Facebook, operator of Messenger and WhatsApp, and we’re seeing new functionalities being rolled out by the minute, with full integration expected by 2016.

Of special note is Messenger’s concierge service, M, which aims to revolutionize the way we go about our daily lives.

From asking M, in plain English, to help find an open table at a local restaurant or to book a flight to Miami, it’s believed that we should have a new and very helpful “friend” come 2016.

So there you have it luxury – strap in, and get ready for the rollercoaster ahead. May the force be with you. We have faith you’ll knock 2016 out of of the park – and we can’t wait to see what you’ll come up with next.

Keep us posted – or better yet, give us a sneak-peek via:

To further investigate the future of luxury on Luxury Society, we invite you to explore the related materials as follows:

- Luxury Recap 2015: Past, Present & Future
- The Forecast For Luxury Goods Growth
- 2014 Luxury Industry Predictions from the Experts


‘Knowledge Partners’ are official Luxury Society contributors and experts in their field. These exclusive partnerships are defined by this term, which has been adopted by Luxury Society to differentiate and highlight those select editorial contributors we have chosen to partner with on a long-term basis.

As an approved Knowledge Partner, we acknowledge that you share the same standards, values and commitment to editorial excellence via credible and informative insights which our readers have come to expect from Luxury Society.

Find out how to join forces with Luxury Society as an official Knowledge Partner and position your business as an undisputed luxury thought leader, contact: