Luxury hubs such as New York, London, and Paris are very likely to sustain their density of luxury stores. But brands urgently need to examine the efficiency of their existing store networks?especially across Asia, and particularly in light of the effectiveness of e-commerce.
Those are among the key findings from new research conducted jointly by The Boston Consulting Group (BCG), one of the world?s leading management consulting firms, and Bernstein, the research arm of AllianceBernstein. The research draws from BCG?s proprietary Metroluxe Index, which assesses opportunities for luxury sales by city, and the Bernstein Proprietary Luxury Store Database, which maps the global luxury retail environment by store and indexes approximately 7,000 stores across 36 luxury brands. ?The global luxury market is changing rapidly, and brands need to adapt accordingly,? said Olivier Abtan, a partner and managing director in BCG?s Paris office and the global leader of the firm?s luxury, fashion, and beauty topic area. ?China, though it still offers growth, is no longer the El Dorado it once was. Also, the overall slowdown in the market means that savvy brands now prefer variable cost structures to expensive fixed-cost real estate. And e-commerce is becoming a force to be reckoned with in luxury markets.?
The BCG and Bernstein research notes that physical stores continue to play very important roles in brand building for luxury firms. After the abundant openings over the past decade, howev...