Cross-border luxury sales increase in 2022 despite economic turbulence


Cross-border luxury sales increase in 2022 despite economic turbulence

Cross-border online sales of luxury goods defied diminishing consumer confidence to increase 17 per cent in the first six months of 2022, the latest research from ESW. According to its Global Voices: Consumer Pulse 2022 survey of more than 14,000 consumers across fourteen countries, despite ongoing economic uncertainty, geo-political instability, and the resulting downward pressure on household budgets, a fifth of consumers (21 per cent) purchased luxury goods internationally – led by shoppers living in China (46 per cent), South Korea (36 per cent) and the UAE (34 per cent).

Handbags and accessories (44 per cent), clothing (42 per cent) and jewellery (39 per cent) were the most popular luxury product categories shopped cross-border. Globally, international sales of handbags and accessories and jewellery were higher than those in domestic markets (40 per cent and 33 per cent respectively) with shoppers citing satisfaction with previous cross-border purchases (31 per cent) and a lack of availability in their home markets (27 per cent) as being the key drivers behind their decision to purchase from international luxury brands.

In a sign of the ongoing shift away from the traditional luxury flagship store model, as consumers prioritise access to product, the majority of cross-border luxury purchasers (70 per cent) say they are happy to forego the in-store experience to receive their products quickly by purchasing online. However, discerning customers still have high expectations of digital commerce with 79 per cent saying they expect the exceptional, personalised customer service experienced in-store to be replicated online.

Natashia Redfern, VP UK country sales director at ESW, commented: “Luxury continues its ascent as cross-borders’ best performing category with this latest reported increase of +16 per cent even more impressive considering our research shows sales in this category grew 50 per cent in 2021. This showcases the impressive work luxury retailers have put in to recreate the in-store brand experience online to win conversions and customer loyalty. Additionally, brands and retailers must take note, the data clearly shows a positive previous cross-border purchasing experience is the key driver for engendering customer loyalty and repeat purchasing long-term.”

Globally, the UK is the second most popular market for cross-border purchasing of luxury goods (32 per cent), second only to the US (56 per cent) and ahead of the traditional luxury markets of France (29 per cent) and Italy (25 per cent).  British luxury products were purchased most frequently from shoppers in the UAE and China (both 40 per cent), India (39 per cent) and Japan (38per cent).

Redfern commented: “The ongoing success of cross-border luxury sales highlights the need for British luxury brands to find routes to those highest value shoppers globally who have a passion for their products and who want to engage with and buy directly from them.”

“For those brands that don’t have the digital capabilities, expertise or capital required to leverage direct-to-consumer opportunities fully, ESW offers a seamless end-to-end solution that helps brands unlock global demand,” she added.

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