Industry KPIs: Luxury ecommerce spending was flat in Q3 amid industry headwinds

The insight: Average ecommerce order values for luxury goods held steady globally in Q3, according to our Industry KPIs data provided by Salesforce Commerce Cloud, as consistent spending from wealthy shoppers offsets softening demand from aspirational shoppers.

• Worldwide ecommerce average order values rose 1.6% YoY for luxury apparel even though the average discount level fell to 18%, compared with 21% a year ago.
• Average spending on luxury handbags was roughly flat YoY at $774.64, likely due at least partly to brands’ reluctance to implement deep discounts on their most profitable products.

The big picture: Brands’ insistence on raising prices to maintain their cachet, coupled with consumers’ growing financial pessimism, has made it harder for shoppers to justify the expense of a Louis Vuitton handbag or Burberry sweater.

• The number of customers in the market for luxury goods has decreased by 50 million over the past two years, per a report by Bain and Altagamma.
• We expect global luxury sales to grow just 3.2% this year, down more than 50% from 2023, due to weak demand in China and the US.

Zoom in: While consumers are shying away from big-ticket luxury goods like handbags and apparel, they’re willing to spend on small indulgences like fragrance, beauty, small leather accessories, and other entry-level items.

They can also be swayed by a good deal.

• US sales of luxury goods rose 14% YoY during Black Friday, per Signifyd, while the average price per item was 13% lower.
• More shoppers are avoiding brands’ flagship stores in favor of outlets or off-price retailers where they can score designer goods for a fraction of the original price.

Our take: The luxury market is under pressure as consumers in the US and China cut spending.

At the same time, there are pockets of opportunity.

• The top-tier luxury customer is spending at a healthy clip. Brands like Loro Piana, Brunello Cucinelli, and Hermès that cater to that echelon of consumers are thriving, thanks to their ability to offer exclusivity, top-quality products, and high-touch customer experiences.
• Emerging markets like India are becoming more important. India’s growing affluent population has made it a popular destination for luxury companies trying to offset sluggish China sales.

Go further: Want more ecommerce benchmarking data? PRO+ subscribers have access to Industry KPIs, our collection of more than 400 benchmarks in marketing and retail and ecommerce across a range of industries and countries, Click here for more information.

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