The Online Luxury Fashion Market Projected to Reach $79 Billion USD in Sales by 2025
The likes of Gucci, Balenciaga and Farfetch are behind the push.
Luxury fashion has traditionally been the last to utilize e-commerce but a new report is stating that there’s a change on the way, led by brands such as Gucci and Balenciaga. Management consulting firm McKinsey released a report called “The age of digital Darwinism,” which took an in-depth look at brands who were taking advantage of online shopping. Leading the way was monobrand stores, which brought in the largest volume of sales, but marketplace stores, such as Farfetch, The RealReal and Vestiaire were close behind.
Quartz reports that Techplaces — such as Lyst and Rent the Runway — were also offering interesting opportunities for growth. According to senior partner Antonio Achille, this is because they can “offer a curated assortment without the risk of carrying the full inventory needed to fuel their growth.” Online sales of luxury goods currently stands at $25 billion USD in total, only accounting for 8% of the total luxury market. McKinsey projects that this number will triple by 2025, reaching $79 billion USD.
However, for this to happen, Achille warns about Amazon’s possible threat to the luxury market, saying “Since disruption has become the new normal and boundaries are blurring, brands should be prepared for the unexpected.”