Luxury Industry Brands Report

According to Statista, the global luxury market was estimated at €55 billion in 2017, while Bain puts the global size at €1.2 trillion, having grown 5% in 2017.

That’s a lot of spend to play for, and when it comes to luxury, brand is a huge purchase driver.

Whether choosing a handbag, a watch, a car, or even a hotel, the brand we choose is often a shortcut for the kind of image we want to display to the world.

This is why luxury brands plough millions of pounds into ‘above the line’ advertising campaigns across TV, radio and billboards as well as digital.

To capture a share of this lucrative market, it’s essential to be well known, and well regarded.

So which brands are winning across those two major criteria, and what else can we learn about the luxury brand industry from Attest’s first Luxury Brand Index?

A diverse mixture of brands

In total there were 153 individual brands named in our test of unprompted brand recall.

A brand had to have 1% of unprompted brand recall to be in the Top 16 brands, and 1.2% to be in the Top 10.

Overall, unprompted brand recall in the luxury market is led by Gucci, with an unprompted recall of 7.7%. This is much lower than in every other secor we’ve run a Brand Index on so far, indicating a more fragmented market.

Within the luxury brand leadership matrix (made up of all brands with a 1% recall), we can see that fashion brands are the most recognised sub-category when it comes to brand recognition, with LV, Gucci, Rolex and Chanel taking four of the top six spots.

Car manufacturers, skincare brands and retailers each had two representatives in the leading brands matrix, while technology and hotels rounded out the rest of the categories.

A modest NPS score

As an industry, luxury sees huge fluctuations in Net Promoter Score (NPS), a well regarded measure of how well a brand is doing in keeping its customers happy.

The industry’s average Net Promoter Score (NPS) is a modest 26.4%, and even the average amongst the Top 15 is not much stronger at 28.4%.

The industry’s NPS score is virtually the same across males and females (quite an unusual result).

Looking at different age groups, it is a little weaker for Gen Z (21 and under) at 21%, this rises to 26% for Millennials (22-35), and further again to 28% for Gen X (36-55) and it is by far the strongest amongst Boomers (55+), at 36%.

The North East, North West, Yorkshire and Wales all gave much higher NPS (averaging over 30), while the South East and South West were least impressed (averaging just 15.5%).

Weaker than usual purchase intent

Another key takeaway from the data is the weaker-than-usual correlation between knowing a brand and the likelihood of consumers considering purchasing it – though it is still reasonably strong.

41.7% of consumers are ‘very likely’ to purchase from a brand they could name, with a further 27.7% ‘likely’ to do so.

The major factor affecting purchase intent is Net Promoter Score (NPS).

For brands with an NPS of 6 or below, a ‘very likely’ to purchase intent reduces to just 3% while ‘very unlikely’ grows from 6.3% to 19.3% (and unlikely from 8.1% to 23.2%). On the opposite end of the spectrum, those giving a 9 or a 10 in NPS were 71% ‘very likely’ to purchase that brand.

This goes to show the importance of measuring NPS for luxury brands.

Key attributes

What do consumers want in a top luxury brand? As you can see from our wordcloud, the top attributes are: good/great products; quality; and brand names. They also associate them with being expensive.

Luxury Index Leaders

The overall leaders of our first Luxury Brand Index were as follows (ranked by Total Brand Equity, on the far right):

You can see how this looks plotted as both Total Brand Equity (TBE) and against the matrix of ‘well known and well liked.’

A few quick takeaways

Two brands in our Top 16 have negative NPS – Hugo Boss (-7.69%) and Prada (-50%) – which is a situation that should cause alarm.

Negative NPS means more people are likely to say negative things about the brand than positive things, which can be damaging for their reputation.

The main comments (across all brands) that have led to less positive scores are:

• “Overpriced.”
• “Too expensive.”

However this may be more a factor of asking the general population about luxury good – not necessarily these high-end brand’s target audience.

In fact, when you select only for household income above £125,000, NPS rises to 31.8, and further again to 41.7% for those with household incomes above £150,000.

Louis Vuitton is a brand that is doing very well across all the index’s measures, with the second highest Brand Strength and largest Total Brand Equity. Their NPS is also strongest amongst the Top 16, at 73%.

Some the comments shine a light on why their NPS is so strong:

• “Because they are very luxury and good quality”
• “Because their products are so luxurious”
• “Great design and good long lasting bags”
• “Because their products are elegant”
• “They’re an all time classic”
• “Heritage”
• “Worth the money”

In short, they deliver. Yes, they’re expensive – but not overpriced.

In conclusion

The luxury sector is a tough one to crack, but the rewards for doing so are huge. Louis Vuitton, who sit on top of our index, are a 9.9 billion USD company, more than Gucci and Chanel combined (who both made this list).

Recall is correlated to purchase intent, but NPS is most important factor.

Measuring these key metrics will help you to figure out which aspects of your brand need to be worked on so you can stay (or break into) the top echelons.

And if your brand wasn’t featured, we can help you run a tailored brand equity matrix specific to your category or target consumer (e.g. just for luxury fashion, or just for luxury cars).

Get in touch with us to learn more.