Competition for affluent consumers’ share of mind and wallet is fierce among luxury brands going into 2016. With new entrants coming into the market and established large luxury brands trying to maintain their foothold and appeal, the pressure is on to stay relevant and first in the mind of the consumer . In today’s market it is not enough for brands to just track their market share, which focuses on the past. Brands need to also understand how they are positioned for the future. Are they going to gain share, maintain their current relative position, or lose market share? At AFFLUENTIAL we have been tracking luxury brands across Asia and in the US through our Affluent Insights™ syndicated research series, interviewing highly affluent consumers about the luxury brands they own plan to purchase across different categories. To help brands get a snapshot of their future prospects we have created a forward looking Luxury Brand Future Index. To simplify the science behind it, this index ranks top brands based on their current ownership, and then compares that to the brands’ rankings in purchase consideration for the next 12 months. Based on this comparison we have constructed a forward looking index that indicates whether the brand will grow, shrink, or maintain its current relative position among its competition.
The AFFLUENTIAL™ Luxury Brand Future Index is created as an easy-to-read tool for forecasting the general direction and magnitude of shifts in brands’ share of ownership and appeal among affluent consumers. We believe it will provide interesting insights to brands about their short term prospects among their competitive set.
We have composed the AFFLUENTIAL™ Luxury Brand Future Indexes in four markets (US, China, Hong Kong, and Singapore) for multiple categories, including luxury watches, jewellery, fashion, skin care, makeup, and cars.
In the US, we looked at the Luxury Brand Future Index (LBFI) scores for the top 20 fashion clothing and accessory brands (see Table 1). What we noticed was that, many of the top brands, such as, Coach, Ralph Lauren, Michal Kors, Chanel and LV, continue to have purchase intent levels that are at par with their broad ownership base among affluent Americans (indicated by LBFI score at 100). However, some of the most widely owned brands, such as, Calvin Klein, Gucci, and especially Donna Karan, have lost some of their appeal, as indicated by BLFI scores below 100. On the other hand, Burberry, Prada, Tory Burch and Versace show LBFI scores above 100, meaning that they are likely to grow faster than their competition.
In China, which is a very different and less mature market for luxury brands, we do not see too many similarities across individual brands, except maybe for Calvin Klein, which is losing appeal in both markets. Other brands that are possibly losing some appeal among affluent Chinese include LV and Coach. Out of the most popular brands, Dior Chanel, Gucci, Burberry and Prada seem to be maintaining their top rankings, while brands like Hermes and Armani are likely improving their position.
Please contact us if you are interested in learning how your brand is doing now and in the future!