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Facts for your future.

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The luxury market

Facts, figures, trends
for fashion, accessories, watches, fragrances
 Luxury-goods market

Core segments of the market Segments of the luxury-goods market 2008*

hold their own by sales worldwide (in %)

Total sales: EUR 175 billion

Tableware (-2%)
Generally speaking, garments, accessories, jew- ‘Hard luxury goods’** (+7%) 4
ellery, watches, fragrances and cosmetics are 21
Garments (+/-0%)
28
considered to be constituent parts of the luxury
market. This viewpoint was also adopted in a
study conducted by Bain & Company on behalf
of Altagamma, the Italian Association of Luxury
Goods Manufacturers. According to this survey, 22
23
garments account for around 28 percent of the Accessories (+5%)
Perfumes & cosmetics (+3%)
market while accessories, fragrances, cosmetics
* Estimate
and ‘hard luxury goods’ (especially luxury watch- ** E.g. watches, jewellery
Figures in brackets: Change compared to previous year
es and jewellery) account for 21 to 23 percent. Source: Bain & Company/Altagamma

The market researchers also counted high-grade

tableware as a small segment of the luxury-goods Development of the luxury-goods market
market. In a study entitled ‘Global Luxury Retail- Sales worldwide (in EUR billion)
ing 2007’, Verdict defined the market along 170
175

similar lines. In this case, however, fashion / gar- 159

146
ments, fragrances, cosmetics, watches and 134 134 134
130 128
jewellery and accessories are joined by furniture
111
and other product groups. 98
93
84
76

Luxury-goods market up in 2008

but decline expected in 2009

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008*
In 2008, the volume of sales in the worldwide * Estimate
luxury-goods markets rose by three percent to Source: Bain & Company/Altagamma

EUR 175 billion. The development of the luxury

market was hampered, in particular, by the finan- Luxury-goods market by regions 2008*
cial crisis, the stock-market collapse and severe Sales worldwide (in %)
exchange-rate fluctuations. For 2009, however, Total sales: EUR 175 billion
the experts from Bain & Company anticipate a Rest of the world (+9%)
decline – the first since 2003. At constant ex- Asia/Pacific (+15%) 5

change rates, they expect a turnover of between 12

Europe (+5%)
EUR 163 and 170 billion (172 to 178 billion at 38

current rates). The largest share of the luxury Japan (-7%) 12

market by volume is held by Europe. However,
growth in Europe is currently being fired by the
upcoming countries of East Europe and the
Asian-Pacific region. Tomorrow’s leading markets 33

for luxury products will include not only China America (+/-0%)

and India but also Russia and Brazil. According * Estimate

Figures in brackets: Change compared to previous year
Source: Bain & Company/Altagamma
to the experts from Bain & Company, these

1
 Luxury-goods market

countries are likely to grow at rates of between

HNWI population by countries 2008
20 and 35 percent over the next five years. In the Top 10 (in thousands)
future, long-term growth in the wealth of people
United 2,460
in emerging nations and the increasing number States 3,019
1,366
of High Net Worth Individuals (HNWI) will gener- Japan 1,517
810
ate new impulses for the luxury market. Germany 833
364
China 413

Wealth in Germany unchanged United

Kingdom
362
491
346
France
396

Canada 213
281
In terms of the number of wealthy individuals, 185
2008
2007
Switzerland
Germany holds third place in the world ranking. 212

Italy 164
In 2008, 54 percent of all wealthy people lived in 207
131
Germany, the USA and Japan. Moreover, per- Brazil
143

sonal wealth and the number of HNWIs in Ger- Source: Capgemini Lorenz curve analysis (‘World Wealth Report 2009’)

many fell less because many rich Germans

pursue a conservative investment policy and Tax-free shopping in Germany 2008
there was no property bubble. Share of total sales by countries (in %)

Russia 26.6 +37.4%

Tourists from threshold countries
purchase more in Germany China 12.8 +7.8%

Switzerland 8.0 -2.0%

United
Arab 4.1
Besides the domestic consumption of high-in- Emirates
+22.2%

come Germans, the expenditures of foreign tour- United

States 2.9 -23.9%
ists in Germany are also important for the luxury
Korea 2.8 -30.4%
market. In particular, Russians and Chinese
spend large sums of money during the vacation Japan 2.3 -19.2%

period – and, despite the crisis, actually increased Brazil 2.0 +12.1%
their expenditures in 2008 compared to 2007. By
Source: German National Tourist Board (DZT/Global Refund 2009)
contrast, travellers from other western industrial
nations, such as Switzerland, the USA and Japan,
spent more carefully in 2008. Attitudes towards luxury (in %)
I buy primarily exclusive brands* 7.8
Luxury orientation I like to shop in exclusive/up-market boutiques*
8.4
is multi-faceted When I go shopping, it sometimes happens
38.1
that I spend more money than I intended*

At present, I mainly wear ‘in’ clothing brands** 10.8

The significance of luxury differs greatly in the I enjoy buying clothes* 36.8

various segments of the population. For around Watches are an important aspect of my outfit* 12.3

50 percent of people, luxury also means the pos- Jewellery is an important aspect of my outfit* 14.8

sibility of treating oneself. Fine dining is also The brand is important even if other less well-known
companies offer the same quality at a lower price* 13.4

popular among half the population. Many Ger-
mans spend freely, especially on fashions, and
then they are inclined to spend more. Around ten
percent are very keen on ‘hard luxury goods’ –
exclusive brands, watches and jewellery.
For me, luxury means having time for myself 49.7
and to do something for myself**
I am happy to spend somewhat more 49.8
on a meal in elegant surroundings**
* Agree completely/on the whole
** Applies completely/on the whole
Basis: Inhabitants aged 20 to 69
Source: Communication Networks 13.0 / potential: 49.55 million

2
 Luxury brands

Brands are particularly valuable The world’s most valuable luxury brands 2008
in the luxury market Top 15 by brand value (in EUR billion)

Louis Vuitton (F) 16.718

The brand is the most important asset for manu- Gucci (I) 6.388

facturers of luxury products. Hence, it is not Chanel (F) 4.918

surprising that many luxury brands rank among Rolex (CH) 3.836
the most valuable in the world. The biggest lux-
Hermès (F) 3.541
ury brand, Louis Vuitton, also holds 16th place in
the ranking of all international brands. Gucci, Cartier (F) 3.278

Chanel, Rolex and Hermès are also brands that Tiffany & Co. (USA) 3.257
have an excellent reputation in this market and
Prada (I) 2.775
generate appropriate levels of sales with their
Ferrari (I) 2.730
good names.
Bulgari (I) 2.577

Europe is the most important region of origin for Burberry (GB) 2.542
international luxury brands. Italy and France are
Dior (F) 1.578
particularly prominent, as is Switzerland when it
Patek Philippe (CH)
comes to watch brands. Thus, the Swiss Rolex 0.855

and Patek Philippe brands also made it into the Ermenegildo Zegna (I) 0.633

ranking. Other leading names include Omega, Salvatore Ferragamo (I) 0.559
Chopard, Longines and TAG Heuer. Of the US Source: Interbrand (‘The Leading Luxury Brands 2008’)
brands, only one brand, Tiffany & Co., managed
to get into the top 15.

Luxury holdings top the market

Today, many of the most valuable luxury brands

belong to major luxury-goods groups, e.g., Louis Major luxury groups 2008/2009*
Vuitton belongs to LVMH, Gucci to PPR and (in EUR billion)
Cartier to Richemont. Others have been quoted LVMH 17.19
independently on the stock market for many
Richemont 5.42
years, e.g., Hermès, Tiffany & Co. and Bulgari.
Swatch Group 3.77
Additionally, many luxury brands are still managed
Polo Ralph Lauren 3.39
by the founding families or owners, e.g. Chanel
Gucci Group 3.38
and Rolex, and they provide virtually no informa-
Valentino Fahion
tion about the development of their business. Group (Hugo Boss)
2.21

Hermès 1.76

Some owner-managed labels, including Prada, Phillips-Van Heusen 1.75

Versace and Salvatore Ferragamo, are consider- Armani Group 1.62

ing going public. In view of the current situation Burberry 1.07

on the financial markets, however, these plans * Different business-year periods in some cases
Source: Corporate information, own research
have been postponed for the time being.

3
 Fashion

Luxury fashion market Luxury garments worldwide

stagnating worldwide Market volume (in EUR billion)

Women Men

The worldwide market for luxury fashions has 23.5 23.6 23.5 23.5
22.0 22.0
grown continuously over recent years. On behalf
of Altagamma, the Italian Association of Luxury
Goods Manufacturers, the Bain & Company
market research institute calculated an average
annual rate of growth of 4.5 percent for women’s
fashions and six percent for men’s between 1998
and 2008. In 2008, the rate of growth declined
significantly – to a certain extent as a result of
2006 2007 2008* 2006 2007 2008*
economic uncertainties but also due to currency * Estimate
fluctuations. Source: Bain & Company/Altagamma

Development of garment sales

in the retail trade* by quarters (index)
130

Garment trade in Germany 120

holding its own

110

In Germany, the garment trade rang up sales 100

worth just over EUR 60 billion in 2007. According

92.2
to estimates, there was no continuation of this 90
89.0

trend in 2008 and, in view of the crisis, it is un-

likely to resume in 2009. A more positive estimate 80
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

comes from the BTE trade association and its * In constant prices
Index: 2003=100
estimates show stable results for the first four Source: German Statistical Office (Statistisches Bundesamt)

months of 2009. However, this does not apply

to the luxury-article segment, which has been Sales by segments Jan. - April 2009
suffering from a fall in demand from foreign cus- Change over the same period last year (in %)
tomers in Germany. Women’s wear Men’s wear

Dresses +8.8 Suits +4.1

The most important segment for the German +4.9
Coordinates
garment trade continues to be women’s fashions. Knitwear +4.3
Coats +3.6

In 2007, sales in this segment climbed by around Trousers +1.6 Knitwear +2.2

seven percent according to BTE, so that it ac- Blouses -0.5

Trousers +0.4
Outdoor
counted for almost half of the entire garment jackets -1.7
-5.2
Sports jackets -0.6
market. In the men’s wear segment, too, sales Blazers

Coats -5.6 Shirts -1.1

jumped by almost five percent in 2007 so that
Skirts -6.6
Outdoor
boys’ and men’s clothing represented approxi- Costumes/
-21.5
jackets -2.0
trouser suits
mately 25 percent of the total. The HML Index for Total
women’s wear
+1.2 Total
men’s wear
+0.7

Sales in the Specialist Trade shows the develop- Basis: Merchandising systems with annual sales of approx EUR 6 billion
Source: HML Modemarketing
ment of sales in the first four months of 2009.

4
 Fashion

German fashion industry Sales of the German fashion industry

in a difficult situation (in EUR billion)

9.23 9.27 9.23

8.93

As expected, 2008 was somewhat disappointing

for the German fashion industry. According to the
‘textil+mode’ and ‘GermanFashion’ trade asso-
ciations, there was a decline in the sales of
the country’s garment manufacturers. Although
based on slightly different figures, both associ­
ations registered a decrease of 3.5 percent
whereby the biggest falls took place in the major
segments of outerwear, knitwear and underwear.
2005 2006 2007 2008
To date, this negative trend has continued into
Basis: Companies with 20+ employees; from 2007 with 50+ employees
the current year, 2009. Source: textil+mode trade association

One of the main reasons for the sales difficulties Export development by countries* 2008
of the German fashion industry is the decline in Change over the previous year (in %)
exports, which have been affected by the eco-
Top 5 winners
nomic crisis since the autumn of 2008. Overall,
Slovakia +76.3
exports of garments only remained stable in 2008 Poland +60.6
with an increase of one percent – a below-aver- Saudi Arabia +26.8
age rate of growth in comparison to the German PR China +26.3

economy as a whole. In particular, exports to the Serbia +24.7

EU 15 – especially to important countries such Top 5 losers

Estonia -10.8
as Austria, The Netherlands and France – suffered
United Kingdom -12.9
from the crisis and sank significantly. On the
Spain -13.0
other hand, there was an increase in exports to
Italy -14.3
expanding regions such as the eastward expan- Finland -14.5
sion of the EU, the Asia / Pacific region and the * From an export volume of EUR 10 million
Source: GermanFashion/German Statistical Office (Statistisches Bundesamt)
Middle East, including the Arabian Gulf States.

Garment suppliers in Europe 2007

Sales (in EUR million)

Adidas Group 4,400

Luxury groups are leaders Esprit 3,250*

Valentino Fashion Group 2,147
in the fashion market Benetton Gruppe 1,956
Triumph Int. Holding 1,504
Burberry Group 1,456*
Multiline 1,443
In Europe, some luxury brands and corporate PPR/Gucci Group 1,347
groups rank among the biggest garment suppli- Tommy Hilfiger 1,340
Only the Brave 1,320
ers with international groups being particularly Bestseller Gruppe 1,244**
well represented. In Germany, however, the mar- Max Mara Fashion Group 1,200***
LVMH-Gruppe 1,126***
ket tends to be dominated by domestic manu-
Giorgio Armani 878
facturers, such as Hugo Boss, Escada, Gerry Dim Branded Apparel 850***
Weber, the Ahlers Group (Baldessarini, Pierre * 2007/2008 business year ** Wholesale sales *** Estimated
Source: Textilwirtschaft
Cardin, etc.) and F.W. Brinkmann (Bugatti, etc.).

5
 Accessories

Luxury accessories successful Market for luxury accessories worldwide

Market volume (in EUR billion)

Leather goods Shoes

Over recent years, leather goods and shoes have
ranked among the most successful segments in 20
19
the luxury-goods market. According to calcula- 17
tions by Bain & Company on behalf of Alta­
gamma, average annual growth in the shoe
segment amounted to around seven percent
8.2
between 1998 and 2008. For 2007, the market 7.0
7.6

researchers noted a dominant trend in the seg-

ment – growth was primarily driven by the top
luxury brands. The demand for cheaper and
upcoming brands was significantly lower. 2006 2007 2008* 2006 2007 2008*

* Estimate
Source: Bain & Company/Altagamma

Leather-goods trade satisfied

Sales in the leather-goods retail trade 2008*
By segment (in %)
According to BBE Retail Experts, there is a clear
Total sales in 2008: EUR 2.1 billion
upwards trend in the German leather-goods
market with sales having risen by ten percent
from 2004 to 2008. And further growth in the small Miscellaneous
Baggage
25
segment is predicted for the future. For 2008, the 30

Federation of the German Leather Goods Retail

Trade (Bundesverband des Deutschen Leder-
waren-Einzelhandels – BLE) estimates a market 10
Small leather
volume of EUR 2.1 billion. In recent years, the goods

market trend has been towards fashion articles 10

25
Business/
and leisure accessories. According to the German school Women’s handbags

Leather Goods and Plastic Products Association * Estimates

Source: Federation of the German Leather Goods Retail Trade
(Bundesverband Lederwaren and Kunststoff­ (Bundesverband des Deutschen Lederwaren-Einzelhandels – BLE)

erzeugnisse – BVLK), sales in the German

leather-goods industry were driven by domestic Sales development in the German shoe retail trade
demand and rose by about one percent in 2008. By quarter years in constant prices (index)
120
117 117
Shoe trade stable 115
112 113
111 111
109 108
106

The German shoe retail trade achieved a positive

result in 2008 according to figures published by 99
the German Statistical Office (Statistisches Bun-
desamt). However, the Federation of the German
Shoe Industry (Hauptverband der Deutschen 83 83 83
Schuhindustrie – HDS) reports a 3.6 percent 80 79

decline in sales revenues for 2008, caused pri- I

2005
II III IV I
2006
II III IV I
2007
II III IV I
2008
II III IV I
2009
marily by a low level of demand in the domestic Index: 2005 = 100
Source: German Statistical Office (Statistisches Bundesamt)
market. By contrast, foreign sales rose slightly.

6
 Watches and jewellery

Swiss watches lead the Watch-export nations 2008 (Top 5)

luxury-watch market
Exports of watch products Exports of wristwatches
by value (in USD billion) by quantity (in million)

The most important export nations for watches Switzerland 15.8 China 550.3

are Switzerland, Hong Kong and China. Charac-

teristic of the Asian manufacturers is the bulk Hong Kong 7.1 Hong Kong 425.8

business in quartz watches. In 2008, China ex-

ported around 550 million watches, the average China 2.7 Switzerland 26.1
price of which, however, was just two dollars. The
price of watches from Hong Kong rose slightly to France 1.5 Germany 12.9
an average of eleven dollars. The quantity ex-
ported was also high at around 426 million. By
Germany 1.5 USA 6.4
contrast, Swiss watches are positioned in a com-
pletely different segment and are an institution in Source: Association of the Swiss Watch Industry (Verband der Schweizerischen Uhrenindustrie FH)

the international luxury market. Switzerland’s

watchmakers have a long tradition. They use the Exports of Swiss wristwatches
finest, top-grade materials and are characterised by value and quantity
by great precision and craftsmanship, especially 15.9 Value (in CHF billion)
Quantity (in million)
in the case of mechanical watches. And this is 14.8

reflected in the average price per Swiss watch 12.7

exported, which was EUR 563 in 2008 when 11.4

10.1
Swiss watches continued their triumphal world- 9.3 25.9 26.1

wide advance with an increase in both the value 24.4 24.9 24.4 24.9

and quantity of watches exported, especially 6.2

4.7
high-quality mechanical wristwatches. However,
sales declined in the first months of 2009. As well, 10.2
7.7
no export increases could be achieved in the
upcoming regions of Asia.
2003 2004 2005 2006 2007 2008 Jan.-May Jan.-May
2008 2009
Source: Association of the Swiss Watch Industry (Verband der Schweizerischen Uhrenindustrie FH)

German watch industry Sales* of the German watch industry

feeling the pinch (in EUR million)

627.5
581.0
541.2
The German watch industry was unable to gener- 501.6

ate an increase in sales over recent years and, in

2008, they fell to just over EUR 500 million. Ac-
cording to the Association of the Jewellery and
Watch Industry (BV Schmuck + Uhren) on the
occasion of the Inhorgenta fair, developments
were generally positive in the first three quarters
of the year before the impact of the crisis was felt
in terms of a decline in the number of orders 2005 2006 2007 2008

received, as well as postponements and cancel- * Estimated on the basis of companies with 20 or more employees (50 or more from 2007)
Source: Association of the Jewellery and Watch Industry (BV Schmuck + Uhren)/
German Statistical Office (Statistisches Bundesamt)
lations, especially on the export side.

7
 Watches and jewellery

2008 was a good year for Development of sales of the German

the German jewellery industry jewellery industry* (in EUR million)
792.4 807.0
757.6 762.5 769.1

Despite the influence of the financial and eco-

nomic crisis, Germany’s jewellery manufacturers
were once again able to boost their sales, which
rose to around EUR 807 million in 2008, an in-
crease of approximately five percent. The Christ-
mas business was also satisfactory in 2008. In
view of the current crisis, however, the jewellery
sector is taking a somewhat pessimistic view of
the immediate future. Exports of jewellery from 2004 2005 2006 2007 2008

Germany were also good in 2008 and rose by * Estimated on the basis of companies with 20 or more employees (50 or more from 2007)
Source: Association of the Jewellery and Watch Industry (BV Schmuck + Uhren)/
eight percent to EUR 884 million. The most im- German Statistical Office (Statistisches Bundesamt)

portant importers of German jewellery were EU

countries and members of EFTA (Iceland, Liech- Imports/exports of jewellery 2008
tenstein, Norway and Switzerland). The situation Share by region (in %)
is different in the case of imports into Germany Total exports: Total imports:
– the bulk in terms of value is imported from EUR 884.3 million (+8.5 %) EUR 774.4 million (+3.1 %)

outside Europe with China being a particularly

Other
important producer of costume jewellery. Other
countries
countries EU
EU 24
30
Precious materials generate 44
61
the greatest sales 9
EFTA
6
Rest of 6
Europe Rest of
20 Europe
According to an analysis by BBE Retail Experts, EFTA

there is also a trend towards polarisation in this

market with the most successful brands being Source: Association of the Jewellery and Watch Industry (BV Schmuck + Uhren)/
those in the uppermost segment, e.g., belonging German Statistical Office (Statistisches Bundesamt)

to LVMH and Richemont. Also successful at the

other end of the spectrum are suppliers of inex- Product groups of the German jewellery
pensive costume jewellery, such as Bijou Brigitte industry 2008* Share (in %)
and beeline. However, this only reflects the de-
Silverware
velopment of the individual segments of the Fancy jewellery
3
jewellery to a certain extent because the high Costume jewellery 5
6
price of gold and platinum means that jewellery
Silver jewellery
made of these materials accounts for the biggest 10

share in terms of sales. The demand for jewellery

made of precious materials remained high at the
beginning of 2009 with less but more expensive
jewellery being purchased. In times of crises, 76
Gold and platinum
investors and buyers bank on goods of lasting jewellery

value and the high price of gold continues to

support this trend. Silver jewellery holds a stable * Estimated on the basis of nine months and companies with 50 or more employees
Source: Association of the Jewellery and Watch Industry (BV Schmuck + Uhren)/
German Statistical Office (Statistisches Bundesamt)
ten percent of sales.

8
 Perfumes & Cosmetics

Growth in the world market for Market for luxury fragrances/cosmetics worldwide
luxury fragrances and cosmetics Market volume (in EUR billion)

Luxury fragrances Luxury cosmetics

22.4
21.8
Bain & Company market researchers calculated 21.0

that the worldwide markets for luxury fragrances 17.0

18.0 18.4

and luxury cosmetics were worth EUR 18.4 billion

and EUR 22.4 billion respectively in 2008. Thus,
these segments achieved a good average rate of
growth of five and seven percent over the years
from 1998 to 2008. In this connection, perfumes
and fragrances were driven, in particular, by suc-
cessful product launches combined with fierce
2006 2007 2008* 2006 2007 2008*
competition and massive advertising. * Estimate
Source: Bain & Company/Altagamma

Perfumeries are optimistic

Development of perfumery sales 2008
Share Change compared to previous year (in %)
The trade with fragrances and cosmetics in Ger- EUR 2.67
Total +0.7
many announced a slight decline of less than one billion

percent for 2008. Although the previous year

started strongly, this was followed by several Decorative
13.8% +2.7
cosmetics
poor months and, in particular, a disappointing
Miscella-
Christmas season. Nevertheless, the Perfumery neous 13.4% +1.0

Association (Parfümerieverband) is taking a cau- Face care 21.8% +0.6

tiously optimistic view of 2009 because crises
Body care 6.1% +0.2
have been good for Make-up & Co in the past.
Women’s 29.3% -0.3
fragrances
Market for body-care growing Men’s 15.8% -1.2
cosmetics

Source: German Perfumery Association (Bundesverband Parfümerien e.V.)

By and large, the beauty and care industry was

satisfied with business in 2008. Expenditures on German market for body-care products 2008
body-care products rose to EUR 12.6 billion. The by segments (in %)
most growth was achieved in the fields of dec­
orative cosmetics and deodorants. According to Soaps / syndets Other body-care products
Deodorants
1.7 3.1
calculations by the Association of the Body Care Bath/shower products 5.4 Hair-care products
24.1
and Detergent Industry (Industrieverband Körper­ 6.7
Men’s
pflege- and Waschmittel – IKW), Germans spent cosmetics 7.0
EUR 153 each on body-care products, an in-
Women’s
crease of three euros over 2007. Luxury cosmet- perfumes/
7.7
fragrances
ics grew equally in 2008. According to figures 23.2
10.5
published by the VKE cosmetics association, Dental/oral-care Skin-care products
products 10.6
which represents around 50 German manufactur-
Decorative cosmetics
ers and distributors of selective cosmetics, sales
of companies with medium to high-priced cos- * At consumer prices
Source: IKW Working Group market estimate
metics rose by 1.9 percent to EUR 1.7 billion.

9
 The future of luxury goods

The evolution of luxury Z_punkt The Foresight Company

Z_punkt The Foresight Company is a firm

Luxury is closely connected with shortage on the
one hand and desirability on the other. People
are prepared to spend a lot of money on anything
that fulfils both criteria, is difficult to achieve and
coveted. In view of the fact that both the avail-
ability and desirability of goods and social tastes
change in the course of time, the notion of lux­-
ury is subject to a constant process of change.
Through developments, such as the constant
growth in affluence, the collapse of traditional
family structures and lifestyle diversification,
luxury became an extremely heterogeneous and
individual phenomenon in the second half of the
20th century. For the future, it can safely be as-
sumed that the homogenous luxury market is a
thing of the past and that the sector will be
dominated by a variety of market segments, all
very different in character.
Size of the consumer group
of consultants for strategic questions re-
lating to the future, which has been sup-
porting companies and public authorities
in the fields of strategy, innovation and leadership since 1997.
The Z_punkt consultants combine a strategic approach with the
results of research into trends and the future, and help decision-
makers to cope with present-day problems without forgetting to
make preparations for the future. Z_punkt works for companies
in the service, high-tech and consumer-goods sectors and has
great expertise and experience in various markets.
Z_punkt is responsible for the chapter on the future of this
­market analysis. The chapter was written by Klaus Burmeister
and Björn Theis.
Luxury trends
by the size of the individual target groups
Super
luxury
Connoisseur
luxury

Artificial
shortage

Immaterial luxury
Facets of luxury
Niche luxury

Climber luxury
The trend analyses in the market concentrate on
the most important of these market segments Democratisation of luxury
and attempt to do justice to the various facets of
luxury. Characteristic of modern luxury is that it Source: Z_punkt

is, on the one hand, accessible to an increas-

ingly broad range of socio-economic groups
(“democratisation of luxury”) and, on the other Localisation of trends by availability
hand, increasingly dependent on belonging to a and material/immaterial aspects of luxury goods
specific group (“niche luxury”). Besides the as- Purely
material
sertive demonstration of status by those who Super luxury Climber luxury
want to document their ascent in the material
Democratisation
world (“climber luxury”), there is the boundless of luxury

luxury of the super-rich (“super luxury”). More Niche luxury

sensitive souls, for whom this showing off is re- Extreme Moderate
shortage shortage
pugnant, withdraw into private worlds of luxury Connoisseur luxury

where intimate connoisseurship counts (“con- Artificial

shortage
noisseur luxury”). New mechanisms are being
Immaterial
tried to create exclusiveness (“artificial shortage”). luxury

And, finally, there is a trend towards luxuries that Purely

immaterial
are fully decoupled from goods and can only be
Source: Z_punkt
satisfied by services (“immaterial luxury”).

10
 Advertising market

Advertising expenditures of the Fashion & accessories market

clothing sector increasing Development of advertising expenditures (in EUR million)
605 Mail-order trade, textiles/shoes
579 580 567 Textile stores/department stores
Range advertising, textiles/garments
Corporate image advertising
According to Nielsen Media Research, the gross 507 Leather goods & accessories
Shoes
amount spent on advertising in above-the-line Underwear & stockings
Clothing

media in 2008 amounted to around EUR 567

million for the fashion & accessories market as 276
294

defined here. This represents a drop of six percent

compared to 2007. In the first half of 2009, the
market grew, also by six percent. This growth is
due almost solely to the clothing segment and,
in particular, clothing stores, which significantly
2004 2005 2006 2007 2008 1st half 1st half
increased their advertising to a total of EUR 197 of 2008 of 2009

million, an increase of almost 30 percent over the Source: Nielsen Media Research (gross advertising expenditures)

same period the previous year. Most of this

growth can be traced back to the Peek & Clop- Fashion & accessories media mix
penburg fashion chain, which now is close on the 1st half of 2009 by segments (in %)
heels of competitor C&A. However, despite cuts Daily newspapers Consumer magazines Trade magazines TV Radio Posters
Cinema Internet
of six percent, C&A remains the top advertiser in Budget in
EUR million
Clothing stores 144.42 56 5 25 3 8 3
this segment with expenditures of EUR 47 million.
Women’s wear 21.38 14 75 9 1
While clothing stores spend more than half of
Men’s wear 6.60 20 57 20 2
their budgets on newspaper advertising and a
Sport/leisure wear 12.85 11 51 14 9 14 1
quarter on television commercials, the rest of the
Shoes 47.06 20 32 3 19 7 12 8
fashion and accessories sector prefers to invest
Range advertising:
15.64 4 81 15 7 1
in consumer publications. textiles/garments

Leather goods 6.14 16 78 42

Hope pinned on advertising for Underwear

Textile stores/
3.99 16 69 11 3

the Christmas season? department stores 4.61 55 7 12 26

Mail-order trade,
textiles/shoes 16.34 1 62 2 11 1 24

Source: Nielsen Media Research (gross advertising expenditures)

Companies in the clocks, watches and jewellery

sector boosted their expenditures on advertising Watches & jewellery market
for the third year running in 2008. On this occa- Development of advertising expenditures (in EUR million)
sion, however, the increase of six percent was 113 Miscellaneous*
Jewellery
more moderate than in previous years. Although 106 Watches

advertising for clocks and watches – especially 89

by luxury watch makers – accounts for over 60 78 77

percent of total advertising expenditures in the

sector, jewellery manufacturers are catching up.
44
In the first half of 2009, the advertising market
32
shrank by more than 25 percent compared with
the first half of 2008. Given, however, that busi-
nesses run around 40 percent of their advertising
in November and December, it will not be pos- 2004 2005 2006 2007 2008 1st half
of 2008
1st half
of 2009

sible to assess advertising expenditures for the * Jewellery shops, range advertising, wristwatches, internet: watches & jewellery, miscellaneous
Source: Nielsen Media Research (gross advertising expenditures)
year until after Christmas 2009. Around 90 per-

11
 Advertising market

cent of all advertising appears in the print media

Watches & jewellery
with consumer publications holding a dominant Development of the media-mix structure (in %)
position in the media mix. Television commercials
2008 1st half of 2009
play only a secondary role, a fact from which advertising expenditures: EUR 113.24 advertising expenditures: EUR 32.40 million

other media, such as posters and radio, profited

Radio Posters Radio Posters Internet Daily
in the first half of 2009. TV
Daily
news- news-
Trade 22 papers Trade TV 4 1 papers
magazines 1 5 magazines 2 2 4 21
20
Cosmetics sector to invest in
advertising against the trend

69 68
With an advertising budget of approximately EUR Consumer Consumer
publications publications
733 million (gross), the perfumes & cosmetics
market once again increased its expenditures
by about three percent in 2008. Expenditures Source: Nielsen Media Research (gross advertising expenditures)

fell slightly in the first half of 2009. However, the

individual segments developed differently with
Perfumes & cosmetics market
companies increasing their advertising expend­ Development of advertising expenditures (in EUR million)
itures for face and body care – especially com- 733 Sun/tanning lotions
713
695 Face and body-care products
plete series – by almost 30 percent in 2008. Complete series, care & cosmetics
626 Corporate image advertising,
620
Advertising for decorative cosmetics was also body care
Decorative cosmetics
Body care
raised – by eleven percent in 2008 and nine per- Face care
Perfume & fragrance samples
cent in the first half of 2009. With an increase in
spending of over EUR 15 million (up 63 percent) 354 346
in the first half of the year, care products and
cosmetics are most probably responsible for the
fact that overall ex­penditures fell only slightly.
Perfumes and frag­ran­ces, the second biggest
segment after face care in terms of advertising
2004 2005 2006 2007 2008 1st half 1st half
expenditures, declined in 2008 and the first half of 2008 of 2009

of 2009. Most companies attach great importance Source: Nielsen Media Research (gross advertising expenditures)

to advertising, especially in times of economic

crisis. According to VKE cos­metics association, Perfumes & cosmetics media mix
almost 30 percent of companies in the luxury 1st half of 2009 by segments (in %)
cosmetics sector want to maintain their advertis- Daily newspapers Consumer magazines Trade magazines TV Radio Posters
Cinema Internet
ing expenditures in 2009 at the same level as in Perfumes &
Budget in
EUR million
61.47 3 32 61 13
2008. Another 17 percent plan to increase them. fragrances

As in the past, the emphasis is on classic adver- Face care 128.91 1 36 1 61 2

tising in print media. However, the internet is Body care 49.30 1 34 1 62 3

catching up quickly and, in this connection, the Decorative

49.29 30 67 11
cosmetics
sector currently faces a number of challenges in
Corporate image 7.70 1 8 3 29 60
relation to advertising. Thus, following the frag- advertising
Complete series,
mentation of the media, consumers are not only care and
cosmetics
39.58 1 25 1 59 11 12

more difficult to reach but are also characterised Face/body care 2.81 2 53 2 32 2 9

by new patterns of consumption via new sales Sun/tanning

1 27 1 64 7
lotions 6.67
channels. The result – a further increase in com-
Source: Nielsen Media Research (gross advertising expenditures)
petitive pressure.

12
 Communication

Exclusive target groups High level of interest in luxury products

for exclusive products Extremely/very interested (share in %)
Luxury buyers* Premium-watch buyers** 46.0
(5.78 million) (8.85 million)

Exclusiveness is a decisive keyword in the luxury 33.6

32.3
market. By no means can everyone afford these 27.4 27.5 26.3 26.6
expensive, high-quality products – and that’s 22.0 21.7 20.3
17.8
certainly not desirable because becoming an
11.6
article for the mass market would harm the aura
of such brands. Therefore, advertisers in the
luxury market must ensure they accurately target Population, Fashion Trends Genuine jewellery Cosmetics, Wrist-
aged 20-69 and (gold, diamonds, perfumes, watches
consumers who are receptive to their brand and lifestyle platinum, etc.) toilet water

who fit with its image. For the luxury market de-
fined here, these consumers could be luxury
buyers who explicitly prefer selected brands or
Basis: Population aged 20 to 69 (49.78 million)
* Agree fully/on the whole with “I mainly purchase exclusive brands” and/or
“I like to shop in exclusive/up-market boutiques”
** Extremely/very important aspects for wristwatches: handmade and/or exclusive brand
and/or well-known brand
Source: Communication Networks 12.0

shops. For luxury-watch makers, the very special

target group of premium-watch buyers is of Attitudes to fashion (in %)
paramount importance. In the case of wrist- Population Luxury Premium-
aged 20 to 69
watches, these buyers attach particular im­ Agree fully/ (49.78 million)
buyers*
(5.78 million)
watch buyers**
(8.85 million)
on the whole with:
portance to luxury qualities – the watches must
17
be handmade or come from exclusive and When it comes to fashion trends,
I’m always up to the minute 51
32
famous brands.
21
I like to try new clothes 45
33

Luxury buyers are keen on fashion I always buy clothes 11

38
from the latest collection
21
The brand is important even 13
if other, less renowned suppliers
Buyers of luxury products are very keen on offer the same quality
46
at a lower price 31
products from the fashion, lifestyle, jewellery,
31
I prefer to buy one high-quality
cosmetics and watches segments and, in the garment to two cheaper articles 70
49
case of fashions, are particularly trend and brand
19
conscious. No less than one in two of them keeps A handbag and/or belt are 41
important parts of my outfit
abreast of the latest developments. 70 percent 31

prefer high-quality products. Moreover, they Watches and jewellery are 20

47
important parts of my outfit
attach great importance to a smart appearance 37

– and accessories, such as bag, watch and I change my watch to match 9

the occasion and my outfit 27
jewellery, which are often sold as matching the 20

garments of a given fashion brand, are simply I frequently buy accessories 5

(belt, handbag, sunglasses) of 22
part of this. They also tend towards well-known the same brand as my clothing 16
brands when buying cosmetics and fragrances. I frequently buy shoes 10
of the same brand as my clothing 30
23
Premium-watch buyers are also characterised by
I frequently buy 7
a very great affinity to luxury. However, they are cosmetics/fragrances of 26
the same brand as my clothing 19
significantly less interested in fashion than luxury
Basis: Population aged 20 to 69 (49.78 million)
buyers – precision timepieces are their passion. * Agree fully/on the whole with “I mainly purchase exclusive brands” and/or
“I like to shop in exclusive/up-market boutiques”
Premium-watch buyers are interested in watches ** Extremely/very important aspects for wristwatches: handmade and/or exclusive brand
and/or well-known brand
Source: Communication Networks 12.0
for watches’ sake and not as part of their outfit.

13
 Communication

Print advertising appeals “Advertising is credible generally speaking”

to luxury target groups Applies fully/on the whole (in %)
40
39

33 33 32
Luxury brands have to cultivate their image con-
27
tinuously and an important aspect of this is the 25
23
Advertising in magazines
Advertising on television
choice of appropriate advertising media. Al­ 20 Poster advertising
16 16 Advertising by e-mail
though, the two luxury-oriented target groups see 13 14 Advertising on the
internet/online services
9 10
advertising as being more credible than the po-
pulation as a whole, there are significant differ­
ences between the individual media, parallel to Population Luxury buyers* Premium-
aged 20-69 watch buyers**
the degree of receptiveness. For both luxury and (49.78 million) (5.78 million) (8.85 million)

for premium-watch buyers, magazine advertise-
ments are the most persuasive with 40 percent
of this target group according advertisements the
Basis: Population aged 20 to 69 (49.78 million)
* Agree fully/on the whole with “I mainly purchase exclusive brands” and/or
“I like to shop in exclusive/up-market boutiques”
** Extremely/very important aspects for wristwatches: handmade and/or exclusive brand
and/or well-known brand
Source: Communication Networks 12.0

highest level of credibility. Poster campaigns are

also rated positively. Less well received is adver- Magazine positioning
tising in the electronic media, on television and, Luxury buyers*
above all, in e-mails and on the internet. Coverage (%)
20

15 FOCUS-BlueChip-Kombi
Stern

FOCUS Der Spiegel

10

Fit
Established media brands score
Bunte for
5 Gala Fun Capital Manager
Magazin

in the luxury market

Playboy
Wirtschaftswoche Cinema Men’s
FOCUS-MONEY Health
0
50 60 70 80 90 100 110 120 130 140 150 160 170 180
Cost per thousand (EUR)

Of the various groups of magazines, news, current
affairs and business magazines are advertising
media of interest to advertisers in the luxury
* Population aged 20 to 69 and agree fully/on the whole with “I mainly purchase exclusive brands”
and/or “I like to shop in exclusive/up-market boutiques”
Basis: Top 15 by cost per thousand; affinity >101; title selection (MA-adjusted): Current-affairs magazines,
business press, lifestyle magazines
Format: 1/1 p. 4c bleed (average prices 2009 gross)
Source: Communication Networks 12.0 / potential: 5.78 million

market. FOCUS and FOCUS-MONEY are popular

with advertisers because they offer excellent Magazine ranking
value for money and a clear target-group orien- Premium-watch buyers*
tation. For target groups of importance in mar- Coverage Cost per thousand
in % (in EUR)
keting and strategic terms, they provide exten­sive FOCUS 12.5 43
Stern 14.0 44
coverage and outstanding cost effectiveness. Der Spiegel 13.0 48
FOCUS is distinguished by broad coverage – al- Guter Rat 2.3 69
Wirtschaftswoche 3.4 79
most 13 percent – of both the exclusive luxury FOCUS-MONEY 1.8 92
Capital 3.2 97
buyer and premium-watch buyer target groups. Manager Magazin 2.5 100
Fit for Fun 2.8 103
And, by booking FOCUS-MONEY, the modern Neon 1.9 109
business magazine, in the F OCUS BlueChip Playboy 2.4 112
Cinema 1.4 117
combination, this coverage can be expanded
FOCUS-BlueChip-Kombi 13.6 47
even more. FOCUS and FOCUS-MONEY offer
* Population aged 20 to 69 and as purchasing criteria for a wristwatch: handmade and/or
advertisers in the luxury market outstanding exclusive brand and/or well-known brand
Basis: Top 12 by cost per thousand; affinity > 101; title selection (MA-adjusted):

planning effectiveness for communicating with Current-affairs magazines, business press, lifestyle magazines
Format: 1/1 p. 4c bleed (average prices 2009 gross)
Source: Communication Networks 12.0 / potential: 8.85 million
top target groups.

14
 Your contacts

Address
FOCUS Magazin Verlag GmbH
PO Box 81 03 07; D-81903 Munich
Arabellastraße 23; D-81925 Munich

Managing Directors
Helmut Markwort
Frank-Michael Müller

Advertising Director
Ingo Müller (+49) 89 92 50-23 43
Alexander Kirschner (Deputy) -20 60

Senior Advertising Manager

Michael Mergenthal -20 76
Fax -24 94
E-Mail michael.mergenthal@focus.de

Assistant
Aynur Civelek -24 39
Fax -20 61
E-Mail anzeigen@focus.de

Burda Community Network GmbH

Service Manager Journal
Design & Placement
Marlene Gunesch (+49) 89 92 50-29 51
Fax -29 52
E-Mail marlene.gunesch@burda.com

Representations abroad

Asia (except India, Japan) Greece/Cyprus Netherlands

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15