uniform retail strategy that matches them. The key is to understand
consumers and what drives them.
In order to better understand the luxury consumer market, the following
indicators have been identified as having a substantial effect on the market:
Global wealth A changing global economic environment has created
immense opportunities for personal wealth accumulation, and the size of the
world’s affluent is on a steady rise. The beginning of the noughties witnessed
a significant upward movement on the global wealth index. Between 2001
and 2002, there was an 18 per cent increase in the number of millionaires
worldwide, creating 514 additional billionaires with a collective holding of
US$25.5 trillion in the process. This figure jumped to US$44.9 trillion by the
end of 2004. Presently, the number of billionaires in the world is estimated to
be more than 26 million with a collective holding of US$30.8 trillion in
assets. The annual rate of increase of the world’s millionaires is estimated to
be 7 per cent. These categories of high net-worth individuals are defined as
those with investable assets of over US$1m. This group of wealthy
consumers includes a newly emerged youthful elite of millionaires who are a
part of the ‘new’ luxury goods consumers.
Other indicators of the world’s growing wealthy and their consumption
patterns include the popularity and interest in art auctions running into
billions of dollars and the upsurge in the demand for gemstones, such as
tanzanite and diamonds. Also, the personal asset management portfolio of the
global private banking industry is on a steady increase. It is also interesting
to note that 80 per cent of the world’s new wealthy elite acquired their wealth
in the last 20 years.
European coming of age Europe has an ageing population. From the
United Kingdom to Italy, Spain, Germany, Portugal, France (to a lesser
extent) and the rest of the continent, this phenomenon resounds in govern-
ment decisions, as well as in economic and social policies. There are more
seniors in Europe than in America and Asia. People aged 60 and over make
up nearly 25 per cent of the European population, compared with 16 per cent
in the US. This might be bad news for several aspects of socio-economic
governance, but it is welcoming news for the luxury goods sector. In France
for example, individuals aged 50 years and above account for more than 30
per cent of the population. They earn 45 per cent of net domestic income;
hold 50 per cent of the population’s net financial assets; and represent a
market for goods and services estimated at €150 billion. In the United
Kingdom, Germany and other European counties, the senior citizen pattern is
being set and this is an important indicator for the marketing, branding and
retail strategies design of luxury brands.
The European senior consumer group wields considerable influence in the
retail market. They have a high disposable income and also an inclination to
chapter 3 71the luxury fashion consumer