With pandemic restrictions lifting across the U.S., consumers are looking for ways to bring a little luxury back into their lives, and sales of luxury apparel, designer shoes and prestige beauty are growing as a result. According to the retail industry analysts at The NPD Group, this growth signals an overall shift in how consumers are shopping for luxury products and what they are shopping for, which calls into question the very definition of the word “luxury.” We’ve seen consumers splurge on necessities and items to make pandemic life more palatable, and now they are splurging on the things they went without. We can expect to see rising sales for more products that play into the excitement people feel about getting back out in the world.
Designer Apparel Takes to the Streets
Although sales revenue for designer apparel has not yet rebound- ed to 2019 levels, growth has been accelerating since March 2021, as consumers have begun purchasing apparel to go back out into the world. Despite overall apparel sales declines, unit sales of lux- ury apparel remain positive, rising 2% from January through May, compared to 2019.
“The definition of the word ‘luxury’ in the apparel market has been shifting for some time now but the pandemic put this shift into overdrive,” said Kristen Classi-Zummo, apparel industry analyst for NPD. “An expensive suit or dress is no longer the status symbol of a designer label. After last year, consumers are putting just as much, if not more, value into the quality of a sweatshirt or T-shirt as they do for a new designer suit.”
Within the premium designer market, growth is mainly coming from streetwear and active categories, like T-shirts, sweatshirts, casual shorts and jeans. Consumers are investing even more in casual, versatile pieces that can be worn for a variety of upcoming parties and social gatherings. “These categories also provide a lower entry point, making owning a piece of the brand more attainable,” Classi-Zummo said.
Sport-inspired Luxury
“High-end footwear has not been immune to consumers’ increasing desire for comfort and athleisure, especially after a year that was spent away from the workplace and social activities,” said Beth Goldstein, fashion footwear and accessories industry analyst for NPD. “In fact, in 2020, the only brand segment that grew
in footwear was active/leisure, which consists of athletic, outdoor and athletic-inspired brands.”
Among the remainder of the brand groupings, designer and con- temporary shoes were the best performers in 2020, with both gaining a bit of share last year. This growth was heavily driven by fashion sneakers, followed by fashion slides, sport slides and thong sandals. Among all categories tracked by NPD between January and May of 2021, designer footwear has shown the strongest recovery, compared to last year, and the strongest growth, compared to 2019, driven by these same casual and athletic-inspired foot- wear categories.
“Designer sneakers have been rising to the level of status symbol for years now,” Goldstein said, “and after the renewed focus on comfort during the pandemic, that’s not showing signs of slowing down any time soon.”
In the related area of accessories, it was designer handbags and small personal accessories that gained share in 2020. However, this category has already ceded some of that share back in 2021, as other segments have recovered. Factors weighing on sales in the high-end market include the growth of athleisure and the rising resale market for luxury handbags.
Prestige Beauty: The Smell of Success
Designer beauty brands showed strong performance from January through May 2021, growing two-and-a-half times faster than the overall beauty market last year. Due mainly to increasing sales of prestige fragrances, sales grew 22% compared to the same time in 2019, while overall beauty industry sales fell by 1%.
“Within total prestige beauty, fragrance is the most expensive beauty category — and it can be considered a luxury in itself,” said Larissa Jensen, beauty industry analyst for NPD. “However, in most cases the average price point for fragrances is significantly lower than for other luxury categories, such as jewelry, accessories and apparel, which may be why consumers are choosing fragrance as a way to treat themselves.
“The desire for luxury and self-care might be a key reason the category has been doing so well during these economically and emotionally challenging times,” Jensen said. “It could also explain why prestige fragrance sales outpaced other beauty categories this year.”
