Profit
Since 2020, The global luxury goods market has grown steadily from a mere 259.10 billion US dollars to a staggering 354.80 billion US dollars. Within 3 years, the luxury goods market has grown to around 100 billion dollars, post-pandemic, and is showing no sign of slowing down. According to research conducted by Statista, the luxury goods market is estimated to grow up to 418.90 Billion dollars by the year 2028. Luxury fashion itself accounts for 30% of the global revenue in 2023. The luxury goods market share for 2023 is broken down into 5 categories with the highest market share being taken up by fashion. Fashion takes up 31%, this being only apparel and footwear sold by luxury brands. This is followed by luxury leather goods and watches & jewelry which take up 21% (Luxury Good: in-depth market analysis, 2023).
From all the research conducted by Statista, the main take main point that can be extrapolated is that the US and China are responsible for the largest market share. Globally the fashion market increased from 111.5 billion US dollars in 2023 to 131.7 billion us dollars in 2028, with a compound annual growth rate of 3.4%. In the US alone, the cumulative sales between 2023 and 2028 are 170.4 billion dollars, and in China, it is 71.5 billion dollars. The statistics alone for apparel and footwear, put into perspective how impactful profit is for a brand(Luxury Good: in-depth market analysis, 2023).
Brands are able to remain competitive during uncertain economic times by adapting to the environment and evolving. A relevant example is in 2020 when the global economy took a hard hit when the Covid Pandemic caused all business to halt as people had to remain indoors. With the pandemic slowing down retail business, many brands had to adapt by adopting online e-commerce. As people were stuck at home for work, most spent time online shopping. Most luxury brands did not have the infrastructure and many had to update their sites to cater to online shoppers. When looking at the economic growth of the fashion market during 2020 and 2021, the clear growth indicated that this adaptation proved to be successful with a growth of 35.1 billion dollar growth in sales (Luxury Good: in-depth market analysis, 2023).
The best method for creative directors to bridge the gap between creativity and commerce is transparency. With society looking down on capitalism, even though capitalism is the bedrock of why the economy remains strong, transparency is key. Most brands try to hide the for-profit aspect of the business by using marketing to manipulate the consumer into thinking that the brand is producing fashion out of a passion for the art. In reality, brands are just trying to maximize profits. With that in mind, it definitely helps to have a very strong marketing department, as they can help reframe the product as being a lifestyle rather than a product. But when artists are transparent about the business aspect of their work, people will feel a level of trust and honesty which they find valuable.