The world’s wealthy are now spending more money on experiences, rather than "things", says a new report from The Boston Consulting Group.
According to the research carried out by BCG-Ipsos, the luxury market, with the categories as defined by consumers themselves, was valued at $1.8 trillion worldwide.
Luxury cars benefitted from $440 billion of the spending and personal luxury goods (apparel, leather goods, watches and jewelry, cosmetics) were bought to the tune of $390 billion.
But the report highlights that people are edging towards “experiential luxury”, such as exotic holidays, gourmet meals, and art auctions, which now accounts for 55% of global luxury spending.
The spending on the category weighed in at $980 billion, but the report states this as including “art, home and furniture, technology, alcohol and food” as well as travel and hotels and “other”, which includes experiences such as spas and yachting.
Most specifically for the industry, travel and hotels represented $460 billion of that spend and that "other" category made up $70 billion.
And the growth in luxury spend looks set to continue, with BCG forecasting that after the past two years of 11% annual growth, the personal-luxury-goods sector will expand annually at around 7% over the next few years.
The shift in experiential consumption is hooked on several factors according to the report - babyboomers who "have it all" are now looking for life-affirming experiences; "new money" of emerging economies is reaching a degree of maturity and looking for more sophisticated ways of consumption; and rise of the millennial wealthy, with younger consumers increasingly interested in experiences they can share "in the moment" with friends, then on social media, rather than owning things.
