The Saks Luxury Pulse, a survey of more than 2,000 of the department store’s online customers, showed that well-off shoppers continue to spend on high-end fashion and travel. In fact, these consumers are increasing their spend on health and wellness and buying self-care, fitness and home products.
The retailer’s research showed that 76 percent of shoppers who make $200,000 or more plan to spend at least as much on luxury items over the next three months as they did over the previous three months. Gen X consumers (21 percent) and millennial and Gen Z shoppers (22 percent) said they planned to spend more in the coming months, compared with just 16 percent of baby boomers or the Silent Generation. Eighty percent of all respondents said these purchases would be gifts for themselves, and 85 percent said they planned to continue buying online.
While more shoppers (38 percent) said they would hypothetically spend an extra $500 on travel, 29 percent said they would spend on shoes, accessories and handbags. Two-fifths said they now prioritize self-care spending that helps with rest, relaxation and nutrition more than they did before the pandemic. That means that more luxury consumers (62 percent) are shopping for workout wear to support their healthy lifestyles. More than half of all surveyed consumers (54 percent) also said they were updating their living spaces, with 51 percent interested in bed and bath products, 50 percent shopping for home décor, and 42 percent spending on candles and diffusers.
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“While fashion remains at Saks’ core, we’ve found that our customer is embracing luxury across all aspects of their daily lives,” chief merchandising officer Tracy Margolies said. “These valuable insights are one of the ways we listen to our customers to inform our assortment.”
CEO Marc Metrick said the retailer is closely monitoring “the evolving macro environment,” and the results of the survey suggest that luxury shoppers aren’t reducing discretionary purchases. “The luxury customer remains highly engaged with fashion, and we are confident that our customers will continue to look to Saks when they want to elevate and refresh their everyday style,” Metrick said.
Mastercard recorded a 4 percent year-over-year increase in luxury sales in June, and 8.6 percent sales growth at department stores. A recent consumer spending report painted “a varied picture of how inflation is impacting essential versus discretionary consumer spending,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated. Despite the fact that inflation is driving up prices on essentials, with Mastercard customer spending on fuel up 42 percent year over year, discretionary apparel purchases have increased 13.1 percent.
Young luxury shoppers are responsible for much of that growth, according to reports from market researchers and retailers alike. Cowen & Co. luxury analyst Oliver Chen said that luxury retail has seen a marked increase in Gen Z shoppers this spring, which is driving legacy fashion houses to drop product that feels more current and versatile. “We expect more luxury brands and retailers to continually take the Gen Z shopper seriously and innovate for more digital penetration and creativity while balancing the core historical elements of the luxury channel,” he added.
The younger set is also demonstrating a heightened interest in sustainable luxury, according to Farfetch research. The high-end online marketplace said that sales of products considered “conscious” increased 60 percent year over year, with 16 percent of shoppers seeking products made with sustainable materials or production processes. The average age of these shoppers, 32, is two years younger than the company’s average customer.