Today, like every day after New Years for the past decade, I started the work year by researching luxury holiday sales. After a 2011 that overflowed with mind-numbing negativity in the media and among many high-end companies, I’m thrilled to report to the luxury industry: the sky may be a different shade of blue than you’ve seen before, but it most certainly is not falling.
As you’ve probably already heard, retail sales for the 2011 holiday season increased more than analysts anticipated. While the final numbers aren’t yet in, the increase is expected to be around 3.5% over the 2010 holiday season.
One of the strongest categories cited again and again in media reports? Luxury goods. Indeed, affluent American consumers (those with the top 10% of household incomes), who represent 35 percent of overall retail sales, are spending.
- According to ABC News, luxury is on fire. They quote Howard Davidowitz, chairman of retail consulting and investment banking firm Davidowitz & Associates: "When we look at luxury sales on a national level, we see they're doing just fantastic. Saks and Neiman's, they're terrific. Coach is fine, Nordstrom is fine. Bulgari and Tiffany, tremendous."
- MSN, meanwhile reports: "'Twas the season when wealthy people unscrewed the vice clamps that had been on their wallets and decided to stimulate the economy. Tiffany and Coach were among the winners this holiday season, according to Jason Asaeda, retail analyst at S&P Capital IQ. He rates both as "strong buys" and points out that wealthy consumers are attracted to the exclusive merchandise being sold by department stores.”
- NBC reports that luxury retailers like Chanel and Gucci reported better than brisk business this holiday season; Neiman Marcus sold out of the ten 2012 Ferrari sports cars it offered in its Christmas book of fantasy gifts for a whopping $395,000 each; and Saks Fifth Avenue reported a resurgence in full-priced selling.
- In a post holiday report, National Jeweler says that, for some independent fine jewelers, the end of the holiday season was strong enough to draw comparisons with post-recession seasons, while others reported that they saw fewer customers but that those who did come in made bigger purchases.
- In November, high-end department store sales rose 6.5 percent over the same period in 2010, compared to a 0.3 percent loss for mid-tier department stores, according to Bloomberg data.
- According to Reuters, Wall Street analysts expect higher-end chains like Saks and Nordstrom to report strong seasonal sales, helped by the continued recovery of high end spending and a stock market that rebounded after swooning earlier in the fall.
So, while luxury shoppers are clearly not in hibernation, they are shopping differently than they traditionally have. For starters, online shopping hit a record a record $35.27 billion this holiday season, up 15 percent versus the corresponding period last year, according to comScore. This season also saw 10 days in which online sales surpassed $1 billion in one day. And, according to USA Today successful luxury goods firms are utilizing social media and digital marketing techniques to drive traffic and, ultimately, sales.