Ah, luxury! Striving for top-quality products to put the cherry on top of life is only human nature. Whether fashion, beauty products, vehicles, gastronomy, or anything else, one thing is sure – people are buying luxury goods, and crypto can potentially increase those sales altogether!
Luxury Buying Report
Deloitte produced a report titled Global Powers of Luxury Goods 2021: Breakthrough Luxury, detailing the statistics of the luxury goods market as a whole. The quick statistics provided in the report reveal:
- $252 billion worth of aggregate luxury goods sales
- $2.5 billion average revenue of the top 100 luxury goods companies
- $182 million is the minimum revenue each company is required to be on the top 100 list
- 5.1% composite net profit margin
- 1.8% compound annual growth rate in luxury goods sales between 2017 and 2020
The report also reveals a drive for the digitalization of the luxury goods industry. Digitalizing can be creating original digital products (NFTs), using technology to facilitate on-demand production, or enabling crypto and other digital payment methods.
“The jump into the digital world has been faster than expected, and the aim of companies now is to refine the solutions already implemented and develop new digital solutions. This increased pace means a complete rethinking of production processes and, most importantly, finding new ways of creating products.”
“Luxury goods companies are making strategic partnerships with experienced players in the digital field and innovative startups to create new products and find alternative ways of improving services while reducing their environmental impact. Innovation is the lever of change in the fashion and luxury industry.”
Luxury Meets Crypto
According to ForumPay’s crypto spending report, crypto consumers spend on average 2x more than other consumers. In July 2021, Visa announced that over $1 billion was spent since they added a cryptocurrency option three months earlier. With crypto having a market cap growth of 800% in 2020, luxury brands spending trends only bring insight that these two markets should collide.
Looking at the crypto and luxury goods spending by region gives a decent look into both markets and how spending trends across both could inspire the luxury goods market to quickly and steadfastly adopt crypto payments.
In 2020 alone, crypto spending increased by 29% in Asia, 8.3% in North America, and 12.5% in Europe. Likewise, the luxury goods spending growth in these same regions also increased—7.9% in Asia, 2.4% in North America, and 9.5% in Europe.
Crypto spending is on the rise, and this is taking into consideration the scarcity of crypto payment availability. If more luxury brands tap into the crypto market, where consumers spend incredibly high rates, this could only increase market revenue.
Why Are People Paying With Crypto?
There are many reasons why consumers and merchants choose crypto as a form of payment over others. Regarding high-value transactions, crypto payments could potentially put any other form of payment on the bench. Crypto transactions are the least time-consuming and most cost-effective forms of compensation. No spending limits, no permissions, no long-winded transaction verification processes, and no high or hidden fees. Making a multi-figure transaction is extremely easy and guarantees more sales as the process is easy and clients don’t walk away.
Many people purchase crypto as a value-appreciating investment. The attachment to money earnt is money spent goes out of the window. Many have increased their wealth with crypto, enticing them to spend more liberally. There was no labor output in return for money to spend. The amount invested can yield higher values with some clever (or lucky) investments. Liberal spending is the opposite of spending on necessity, and luxury thrives on just that. When spending is low, crypto could be the alleviation markets are looking for.
Many are hesitant to enable crypto payments due to volatility, but that is no longer an issue. When companies like ForumPay instantly convert crypto to cash at the best real-time rate available, businesses can settle payments in the currency of their choice. As a result, neither end has to experience the consequences of the ever-fluctuating crypto market. And as ForumPay allows crypto payments from any digital wallet with any cryptocurrency, it’s the best option when planning to access crypto spending audiences. No limitations.
There is no doubt that luxury brands should consider enabling crypto payments. Access to a revolutionary market that has proven to be ready to spend is a no-brainer. Prêt-à-Porter meets Prêt-à-Payer.
Get ahead of the curve, and don’t get left behind. Start generating more sales and revenue by joining the crypto-spending market. Learn more about getting started by visiting ForumPay.