ALTAGAMMA2017WORLDWIDELUXURYMARKETMONITORMILLENNIALSTATEOFMIND.THETAILWINDBEHINDCONSUMERBEHAVIORSANDWINNINGSTRATEGIESCLAUDIAD'ARPIZIOMILAN,OCTOBER252017BAIN&COMPANYALTAGAMMACREATNIAECUTURAIIALIANA
WORIDWIDFIUXURYMARKFTONAPAGE:2017ANDBEYONDEXPERI(M)ENT(I)ALLUXURY"X"FACTOR:EXPERIMENTINGWITHEXPERIENCESKEYTOSUCCEEDINPERSONALLUXURYHEALTHIERAFTER2016REBOOT,2017'NEWNORMAL':POSITIVEGROWTH,YOUNGERCUSTOMERS, HIGHERVOLUMES, LOCALCUSTOMERSBACKEVERYWHEREUNIVERSAL"LOCALTOURIST'ASTHE UNIVERSALCUSTOMER:ALMOSTALLNATIONALITIESANDGEOGRAPHIESGROWING(ESP.CHINESEANDCHINAIEVOLUTIONTOWARDSANECOSYSTEMOFCHANNELSAROUNDTHECUSTOMER,ECOSYSTEMICWITHONLINEPLAYINGALEADINGROLETRADITIONALMARKETSEGMENTATIONLOSINGRELEVANCE:BRANDSNEEDTOPOST-ASPIRATIONALINTERPRETCUSTOMERASPIRATIONSWHILESTAYINGTRUETOTHEIROWNDNADELIVERINGCONTENT.INSPIRATIONANDENGAGEMENTTHROUGHOUTCURATEDTOUCHPOINTSWILLBEKEYTOWINPOLARIZED,PROFITABLE,WINNERSVS. LOSERS,YETALLCONSISTENTLYPROFITABLE;ARETHEEVOLVINGECONOMICSOFTHEINDUSTRYFVOLVINGZLUXURYISCHANGINGSKTN;THERISEOFMILLENNIALTSM
EXPＥRＩ(M)ENTL）AＬ456DHAcidAlkaline
GLOBALLUXURY MARKETSREACHING ~E1,2T IN 2017, UP 5%FROM2016GLOBALLUXURYMARKETS2017E|EB2316035404070191489262PersonalLuxuryLuxuryLuxuryFineHigh-QualityLuxuryTotal2017ELuxuryCarsPrivateJetsLuxuryHospitalityWines&FoodArtDesign&YachtsCruisesGoodsSpirits6%05%6%496%1%4%-2%14%
LUXURYTOYSAT-HOMELUXURIESLUXURYCARSHIGH-QUALITYDESIGNBOARDLEDBYASIAANDACONTINUINGTOGRONASCENTONLINECHANNELPROFITABLY,WITHSTRONGPERFORMANCEPOLARIZATIONSTABLEYACHTSWITHDRIVENBYSIZEUNDERLYINGPOLARIZATION;FLATBUTFINEARTSEVOLVINGOFYOUNGGENERATIONS?MARKET:SHIFTAWAAUCTIONSTOPRIVATESALES;SHRINKINGJETSSEGMENTDUEFAIRSANDONLINEBECOMINGKEYCHANNELSFORCUSTOMERTOUNCERTAINTYINMOSTACQUISITIONMARKETSF&BTRAVFIEXPERIENCESEXPERIENCESPOSITIVEPERFORMANCEOFACCELERATINGLUXURYFOODLUXURYHOTELS:WITHINAFAST-EVOLVINGATTRACTINGANDECOSYSTEM:HOME-DELIVERYRETAININGMILLENNIALSAPPS"COOPETING'WITHWILLBETHEMAINCHALLENGERESTAURANTS;FLEXITARIANISMASTHENEWBRISKGROWTHOFLUXURYFOODMANTRACRUIDRIVENBYSTRONGSPIRITSOUTPERFORMINGAPPEALTOBABYBOOMERS2017WINES:CHINESEMARKETANDMILLENNIALSBACKTOGROWTH(EXPEDITIONSEGMENT)
EXPERIENCESAREWINNINGINTHEPOST-CRISISERAGLOBALLUXURYMARKETS2010-2017E(INDEX=2010)CAGRYOY'10-'16'16-'17EExperiences110/o4%Experiencing90/050/ogoods60/c50/ga Personal aoodsREACTIONSFROMPERSONALLUXURYGOODSPLAYERSDRIVING2017PERFORMANCE,INLINEWITHOTHERSEGMENTS
HEALTHIER
PERSONALLUXURYGOODS:AFTER 2016STAGNATION, THEMARKETEXPERIENCED AHEALTHIERNEWNORMALIN 2017NEWNORMALSortIeduTEMPLEDEMOCRATIZATIONCRISISCHINESEBULIMIAREBOOTE262BE251BE250B'17EE224B'15'16E218B212B'14'1312E192B11E173B167B07'10'08'06E153BE147B09E136B'05E133BE133BE128BE128B'04'01'02E108R00'03'99E96B198'16-17EYOY'97'96'96-'17ECAGR+50%Current十6%+60%Exch. rateConstantExch. rate
MARKETACCELERATINGTOWARDSYOUNGERGENERATIONSMILLENNIALSALREADY30%OFTHEMARKET,GENZCOMESNEXTPERSONALLUXURYPERSONALLUXURYGOODSCONSUMERSBYGOODSCONSUMERSBYGENERATION|EBGENERATIONIMMYOUNGERGENASTHEMAINGROWTHENGINEOFTHEMARKET:~85%OFLUXURYGROWTHFUELLEDBYGENYANDIN2017VIRTUOUSCIRCLEAROUNDTHEYOUNGERGENACCELERATION:MILLENNIALSENTERINGTHEMARKETWITHCLEARTASTESANDBEHAVIORS,INFLUENCINGOTHERGENERATIONS26%26%WINNINGBRANDSDEVELOPINGTAILOREDGenX38%STRATEGIESANDUPGRADEDVALUE38%PROPOSITIONSMILLENNIALSARERESPONSIVEANDENGAGEDBEYONDEXPECTATIONS,AMPLIFYINGTHEIR38%SPENDINGANDADV...
