Luxury Jobs Report Summary
- Millennials prioritize experiences over materialism
- Covid-19 has shifted spending priorities in the luxury sector
- CAGR growth of nearly 5% over the next 2 years
- Luxury brands continue changing advertisement strategies to appeal to younger generations
How was 2020 for Luxury Jobs?
The luxury market is not one that is known for dynamic change, but with the rise of meritocracy over old money, the preferences of high-income earners are vastly different than they have been in the past. With a new generation that values non-traditional aspects of the luxury sector such as environmentalism and rejects materialism, the U.S. luxury market is adjusting to cater to new preferences.
The Covid-19 pandemic has also shifted spending priorities across all consumers. Despite global panic and a market pullback, the global luxury goods market grew at a CAGR of 6.4% in 2020. Beating even its 2019 performance of 4% CAGR growth. This is a reflection to the new wave of higher income earners whose jobs were not as affected by the supply and demand changes driven by lockdowns and Covid-19 restrictions. Additionally, added stimulus to the entire economy meant some individuals came out of 2020 better than they started it.
Despite high tariffs and taxes on luxury items in China along with stock market volatility, purchases of luxury goods remained stable in 2020 with the Chinese consume. A trend indicative of the increasing prevalence of HENRYs (high earners, not yet rich) and that consumer population’s spending habits.
What is Happening in 2021
Market forces in 2021 will force luxury retailers to change their approach in marketing as well as the types of goods and services they offer to consumers. It has become almost impossible to do an economic report without mentioning the rising ‘sharing economy’ and the luxury industry is no exception. Services like Uber and Airbnb are commonly viewed as cheaper services for people on a budget, but they have also penetrated their way into the luxury market.
In an age of fast changing trends, luxury retailers have started to keep an eye on a rising new consumer class the HENRYs (High-Earners-Not–Rich-Yet). In addition, companies are committing to make significant investments in stimulating the interest of the younger segments of the population, namely Millennials and Gen Z: the customers of the future.
Where is the Luxury Sector Jobs growth?
Growth in the luxury sector has been spearheaded by luxury travel and fine arts. This should not come as a surprise as “new money” tends to value experiences more than previous generations over physical goods. To capture this new market, luxury brands must do something they are not traditionally known for doing; innovate.
The new generations of high-income earners have a much different value preference than the successful Yuppies and the previous WASP elite that dominated the upper class. Luxury market growth will occur for brands that embrace the new values of the meritocracy. The luxury hospitality sector has an advantage in this because they can offer luxurious world experiences that this new culture craves.
However, this does not mean traditional luxury retailers are doomed to fail. New market growth will occur for brands that embrace changing culture and appeal to newer generations. Growth can be expected for brands that take part in becoming a figurehead in this new culture, which means taking part in intellectualism and addressing concerns such as environmental sustainability. In fact, the personal luxury goods market is projectd to grow by $83 billion between 2019 and 2013.
Luxury Sector Job Market Challenges
Rather than relying on traditional prestige behind brand names, luxury retails are now faced with the challenge of being innovators. The new upper class of HENRYs (high earners, not yet rich) have drastically different values than the traditional members of the bourgeois that luxury brands have catered to in the past, so reaching them will be key in 2021 and for years to come.
However, hiring challenges in the luxury sector will extend from the global challenges of in-person interaction driven by the Covid-19 pandemic. Luxury retail, and its high-touch attributes, relies on making the consumer feel like they are receiving an experience other brands cannot deliver. It will be interesting to see how real-world factors impact the sector, with particular attention to effects on hiring and recruitment.