To get access to all of the data and insights, purchase The Lifestyle Era: Luxury’s Opportunity in Home and Hospitality.

When the Prada Caffè opened at Harrods in London earlier this month, a viral TikTok reel showcasing the cafe recorded 220,000 views within the first 24 hours of its posting. Viewers left comments swooning about the eye-catching details like Prada-branded cutlery and made comparisons to the recent hospitality ventures of other luxury fashion players, including the pop-up Dior cafe that also opened at Harrods the prior year.

Expanding into adjacent categories like design and hospitality is not new for many fashion and beauty brands. Ralph Lauren launched a home business in 1983; Fendi established its Fendi Casa joint venture in the same decade. What is new is the momentum such expansions are gaining, particularly since the Covid-19 pandemic has led to consumers placing greater importance on the spaces in which they live, work and socialise.

Since 2020, brands ranging from Aquazurra and Fendi to Sézane and Rhode have launched home collections. Meanwhile, mass fashion players such as Boohoo, Mango and Gap have seized the opportunity as customers show new openness to purchase their branded homeware at generally higher prices than their apparel.

Amid this change. BoF Insights’ latest report, The Lifestyle Era: Luxury’s Opportunity in Home and Hospitality, explores the dynamics behind the lifestyle boom and how brands can maximise the opportunity to extend their brand universe and unlock new avenues of growth.

According to market research firm Euromonitor International, sales in home and hospitality categories will grow at a compound annual rate of approximately 7 percent through 2026, outpacing pre-pandemic growth of 4 percent. Fuelling this acceleration are key post-pandemic shifts such as hybrid work and growing consumer interest in “experiential goods,” like notable items to use and showcase while entertaining at home. Customers are also looking for more novel, immersive experiences, including at exclusive restaurants and hotels.

In a proprietary survey with luxury research provider Altiant, BoF Insights found that high-net-worth individuals are spending more on home design today than before the pandemic. Affluent shoppers in the US, UK and France say they are spending more on furniture, decor, textiles, fragrances and tableware now than before 2020, leading to a 12 percentage points post-pandemic increase.

Around half of those surveyed say they shop for home design products to refresh the style of their living spaces or to upgrade their surroundings for a more premium feel.

Fashion and beauty brands are betting on these categories to not only open new revenue streams but also extend customer touchpoints and build greater brand affinity. More than 70 percent of surveyed HNWIs say home design and hotel extensions have a positive impact on how they perceive fashion and beauty brands.

Hotel and dining extensions can provide especially strong affiliations between brand and customer by creating immersive, memorable experiences, ranging from personalised menus, such as Café Kitsuné's drinks and desserts customised by location, to VIP services like those available at Boucheron’s private apartment in Place Vendôme in Paris.

These ventures can also showcase a brand’s home offering. BoF Insights found that over 30 percent of surveyed HNWIs are more likely to purchase from a brand’s home collection after a branded hospitality experience.

Affluent shoppers cite Dior, Chanel and Gucci as the brands they would be most interested in buying home design products from. Notably, however, Zara was the only non-luxury brand to appear in the top 20 most-mentioned brands in our survey, indicating how expansions into home can enable mass brands to achieve a more premium positioning in that category.

Brands expanding into lifestyle must have fresh narratives for these ventures, ensuring the tone isn’t gimmicky and resonates with customers’ desire for quality and tastefulness. Gone are the days when printing a luxury logo onto an everyday item would attract customers. Accordingly, BoF Insights explores a framework for fashion and beauty brands’ investment into lifestyle categories, and the respective tactics to deploy to reach their desired target audiences.

Why this BoF Insights report is a must-have:

• Analyses the opportunity for fashion and beauty brands to expand into lifestyle, through homeware, dining and hotels
• Unpacks how cultural shifts are redefining customer attraction to lifestyle products and experiences and explains how brands can craft a long-term lifestyle strategy
• Features proprietary research with high-net-worth consumers in the US, UK and France, revealing attitudes towards fashion brand extensions into home and hospitality, purchase drivers, and the most in-demand product categories and brands
• Showcases perspectives from executives and industry leaders on brand extensions into home design and hospitality, including creative development, the competitive landscape and operating models
• Includes concise case studies on Boucheron, Bulgari, Café Kitsuné, Diesel, Dolce & Gabbana, Elie Saab, Fendi, Louis Vuitton, Marimekko, Prada and Tiffany & Co

This report is based on proprietary research inputs:

• Three panels, conducted by Altiant LuxuryOpinions® on behalf of BoF Insights, of HNWIs in the US, UK and France who each have investable assets with a median value of between $1.5 million and $2 million
• 28 interviews with founders, CEOs and other senior executives from fashion, beauty, home design brands and retailers, hospitality companies, as well as consultants and analysts
• Market-sizing data from Euromonitor International, a global market research firm
• Featured companies include but are not limited to: Anya Hindmarch, Armani, Boucheron, Bottega Veneta, Brunello Cucinelli, Bulgari, Burberry, Cartier, Chanel, Café Kitsune, Coach, Dior, Diesel, Dolce & Gabbana, Elie Saab, Fendi, Gucci, H&M, Hermès, Issey Miyake, Jo Malone, Kate Spade, Louis Vuitton, Marimekko, Missoni, Prada, Ralph Lauren, Roche Bobois, Saint Laurent, Tiffany & Co, Versace and Zara

For access to all of the data and insights to inform your business strategy for the Middle East, purchase the full report.

Change is in the air for Middle East fashion. Consumers across the region are redefining Middle East style as they seek out a mix of local and international brands, traditional and contemporary garments in ways never seen before. For international brands, this requires an entirely new way of engaging customers with a careful and often nuanced localisation strategy, according to research in the latest report from BoF Insights, Fashion in the Middle East: Optimism and Transformation.

As the Ramadan season and traditions begin later this month, the consumer shift will likely be evident. In previous times, it was sufficient for international brands to simply default to designing capsule collections and marketing campaigns that were awash in emerald green – a colour typically associated with Islamic traditions — and desert motifs. But it wasn’t long before consumers grew tired of those default products as one brand followed another.

Consumers are now raising the bar in terms of what brands need to do to resonate with them in a fashion industry poised for growth. BoF Insights reveals following extensive research in the United Arab Emirates (UAE) and Saudi Arabia — two key fashion markets in the region — the categories and brands that are best placed to capture these opportunities.

While bags and accessories were once mainstay fashion purchases, male and female consumers in both the UAE and Saudi Arabia now are leaning into a range of products — notably shoes – as well as beauty for women in both countries.

Interest in everyday and traditional apparel may also continue benefiting popular international brands in sportswear (Nike and Adidas) and fast fashion (Zara and H&M) even as luxury labels such as Gucci remain favourites. And competition from local players will likely heat up, particularly as consumers yearn for products that speak to a growing national pride.

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Background:

Luxury footwear is booming as consumers opt to spend more than ever on shoes with soaring prices. The market for designer shoes is set to grow to $40 billion by 2027, up from $31 billion in 2022, according to Euromonitor International. As consumer demand grows, competition is heating up for brands from Manolo Blahnik and Christian Louboutin to Chanel and Prada who stake much of their businesses on the core segment. The market is much-changed: shoppers crave comfort, but also newness and uniqueness. They also have more choices than ever: cowboy boots, Mary Janes, stilettos and mules have been trending recently.

“There was this vibe shift occurring post-pandemic. The shoes that consumers want today look and feel very different from what they had before,” said Diana Lee, BoF’s director of research and analysis, on the heels of publishing BoF Insights’ latest report “The Statement Shoe: Reimagining Designer Footwear.”

Key Insights:

• The footwear category is poised for growth this year: 84 percent of consumers surveyed across the UK, US and China told BoF Insights they were planning on investing in footwear in the coming year. At the same time, prices for women’s footwear have increased 10 percent from 2019.
• Shoes have become more expensive, partially, thanks to streetwear’s hype cycle, which has conditioned consumers to shell out for limited edition items. Of course, inflation and rising costs across the supply chain have contributed to increases.
• Much about the footwear market has changed. Mass trends toward casualisation have led consumers to seek out comfort, primarily, when buying shoes.
• Still, high heels are performing well following the return of in-person events. And, the high heel space has seen a sort of reinvention as brands opt for designs that grab consumers attention — like Loewe’s eggshell and balloon designs. Meanwhile, newcomers like Amina Muaddi are stealing share.

Additional resources:

All businesses must learn to navigate the cultural and technological shifts ushered in by young consumers, but this is particularly important for the fashion industry because it is predicated on style and novelty. Gen-Zers — the first true digital natives — range from ages 12 to 25 and are now coming into their own.

Having mastered social media platforms at an early age, this generation is adept at producing and consuming fashion content, doing so at a faster pace than any generation before. This inverts the design process where styles are now percolating bottom-up rather than being pushed down from the traditional gatekeepers, while also accelerating trend creation. This digital savviness manifests in the way Gen-Z discovers, purchases, and even disposes of fashion. As a result, this generation has the power to reshape all the points in the consumer journey as they mature and gain purchasing power.

Brands and retailers must take note of this generation’s intricacies in order to thrive. BoF Insights’ latest report Gen-Z and Fashion in the Age of Realism focuses on the US, where Gen-Z has an estimated disposable income of $360 billion.

Below is a look at what the fashion industry needs to know to craft a winning, long-term strategy with Gen-Z.

The vast majority of Gen-Zers find fashion inspiration through social media platforms, especially TikTok with its personalised #ForYou pages. Nonetheless, the next step — in terms of converting those young consumers — is arguably more important. In this case, Instagram still comes out slightly ahead in terms of providing the information needed to pull the trigger. Meanwhile, Snapchat and Facebook lag with BoF Insights’ panel despite their investments in social commerce features, including AR try-on and integrated shops, respectively.

“What are the kids wearing these days?” is the perennial question fashion forecasters ask. The fashion industry, often out of necessity, is obsessed with chasing youth, especially as young consumers enter the workforce, inform new styles and shift buying behaviours.

Gen-Z — aged between 12 and 25 and accounting for approximately 25 percent of the world’s population — is now coming into its own. But Gen-Z is truly unique. As the first digital natives, their formative years have been unlike that of previous generations, creating a greater cultural chasm between Gen-Z and older generations. Social platforms have given Gen-Z tastemakers an unparalleled ability to convene and speak to audiences.

In the US, Gen-Z is particularly shaping the culture and moving the economy with a purchasing power of about $360 billion. Each generation experiences distinct events that shape its life outlook. Baby Boomers benefitted from an economic boom after World War II, living in an age of optimism. Gen-X matured as social mores changed and female labour participation jumped, living in an age of independence. Millennials, typically the children of more affluent Baby Boomers, benefitted from the advent of the internet, living in an age of idealism. Yet, Millennials are old enough to remember a less digital world.

Gen-Z is much more pragmatic, growing up under the lens of technology from the outset. The worsening climate crisis, pressing global movements such as “Me Too” and “Black Lives Matter” and the Covid-19 pandemic all serve as a backdrop for the current age — an age of realism.

Gen-Z and Fashion in the Age of Realism is the newest report from BoF Insights, exploring Gen-Z’s relationship to fashion, identifying the distinct personality types, their sources of inspiration, their preferred brands, and their approach to sustainable fashion. This report is informed by in-depth analysis of social media behaviour, a survey of nearly 1,000 Gen-Zers as well as focus groups.

Fashion is the favourite entertainment category for US Gen-Zers to spend money on, outranking other categories like dining, video games and consoles, and music. Young consumers are critical to the fashion industry, not least because per capita spending on fashion declines as we age:

To best engage with and speak to young consumers, BoF Insights partnered with Quilt.AI — an AI-powered insights company — to canvass social media behaviour and profiles to identify six personality “clusters” that characterise the US Gen-Z population. While Gen-Z is like other generations in that they defy stereotyping, these clusters are a critical heuristic for executives to understand Gen-Zers’ shared affiliations, interests and perspectives:

BoF Insights has also collaborated with Juv Consulting — a company launched by three 16-year-old entrepreneurs in 2016 — to field a proprietary survey of nearly 1,000 US Gen-Zers. This survey reveals that 89 percent of the survey participants rate fashion as important for boosting confidence, while 82 percent say fashion is important for establishing their identities. For Gen-Zers, fashion is less about being trendy or denoting status.

Keeping up with fads has become more difficult than ever, as social media has accelerated trend formation. Moreover, Gen-Z has inverted the design process — aesthetics like Barbiecore, Cottagecore, Dark Academia and Coastal Grandma originated bottoms-up from social media and resale platform content instead of top-down from fashion brands and retailers. As a result, many Gen-Zers tend to adapt pieces representative of trends into their own personal styles, as opposed to following trends full-scale.

Brands like Nike, Gucci and Adidas have built the most ardent following among this generation as the leading favoured brands among our panel. Gucci is the only luxury brand to appear in the top 10 list of unprompted favourite brands, while Louis Vuitton appears further down among the top 20. Gucci is notable for its efforts to court young consumers early on within virtual gaming worlds like Roblox. In particular, BoF Insights reveals that the majority of Gen-Zers aspire to buy more luxury clothing and accessories as they gain purchasing power.

The report completes its analysis with a playbook for fashion executives, unpacking how your companies can best connect with Gen-Z through four pillars: communications, style, communities and brand evolution.

Why this BoF Insights report is a must-have:

• Assesses the generational divide and prevailing attitudes of each major US generation from Baby Boomers to Gen-Zers, including a detailed examination of why Gen-Z is distinct by identifying six key values
• Features proprietary research with Gen-Z consumers in the US, revealing the most in-demand fashion and footwear brands, shopping triggers, sources of inspiration, and information for purchasing and finally methods of product disposal (including resale)
• Analyses six key personality clusters that are representative of the US Gen-Z population using machine learning applied to social media profiles
• Highlights concise case studies on Dr. Martens, Gucci, PacSun, Princess Polly and Remass (one of the top sellers on Depop), as well as strategic analysis of fashion companies like Abercrombie & Fitch, Aritzia, Forever 21, Gap, Guess, J.Crew, Nike and Patagonia
• Unpacks tactics for brands and retailers to effectively appeal to Gen-Z related to tailoring communications, honing in on style/positioning amid trend acceleration, building and engaging communities, and enabling a company to identify and adapt to cultural and technological shifts

This report is based on four proprietary research inputs:

• Survey panel of approximately 1,000 Gen-Z participants (aged 13 - 25) across the US fielded by Juv Consulting
• Social media analysis by Quilt.AI of approximately 5,000 public Instagram posts conducted via machine learning to create six personality clusters
• 4 focus groups with a total of 15 Gen-Z participants located across the US (conducted with The Z Suite from BCG PR and Juv Consulting)
• 8 interviews with executives from agencies, consultants, start-up operators and influencers and 12 interviews with founders, chief executives and other senior executives from brands, retailers, rental platforms, resale platforms, and gaming and social media platforms

Companies featured in the report include: Abercrombie & Fitch, Adidas, American Eagle, Aritzia, By Rotation, Claire’s, Depop, Forever 21, Gucci, Guess, H&M, Levi’s, Louis Vuitton, Nike, Old Navy, PacSun, Patagonia, Pink, Princess Polly, Puma, Roblox, Shein, TikTok, Under Armour, Uniqlo, Urban Outfitters, Vans and Zara.