The global market for luxury goods is seeing a ”significant surge” that will require premium delivery solutions, according to new research from delivery giant DHL.

The company’s latest white paper - ”The Logistics of Luxury: Unveiling Luxury Supply Chain Opportunities for Success” - looks at how the  market surge is being driven by changing consumer behavior, emerging trends, and technological advancements.

The paper examines the pivotal role of logistics in this growing market and warns that this growth places unique demands on supply chain operations.

Katja Busch, chief commercial officer and head of DHL customer solutions & innovation, said: ”The global luxury market’s robust growth underscores the critical importance of luxury logistics.

“The market reached $355bn (£272.34bn) in 2023 and is projected to grow to $418.93bn (£321.39bn) by 2028. As this market expands, luxury goods logistics goes beyond mere transportation; it’s about seamlessly blending premium products with impeccable delivery standards.”

The White Paper focuses on personal luxury goods such as designer fashion, high-quality watches and jewelry, and premium cosmetics and fragrances, exploring current trends and challenges shaping the luxury segment, and detailing their impact on supply chain and logistics strategies.

It also investigates logistics requirements across the entire value chain of luxury companies, focusing on five key areas:

  • Supply chain visibility: Advancements in digital technologies, such as IoT, RFID, and serialization, enable Control Tower solutions to improve supply chain visibility and security, leading to better customer experience, profitability, and sustainability.
  • Security: Luxury goods logistics faces significant security challenges, including physical threats, insider threats, and e-commerce fraud, necessitating enhanced packaging, customer education,streamlined claims processing, thorough investigations, and advanced technology to ensure safe and reliable delivery.
  • Premium delivery: As online retail grows, luxury brands must invest in premium delivery services to replicate the in-boutique experience at home, enhancing customer satisfaction and reinforcing brand identity through features like flexible delivery timing, eco-friendly practices, personalized packaging,and streamlined returns.
  • Fulfillment centers: Luxury brands must transform traditional fulfillment centers into omnichannel processing centers (OPCs) to manage business growth, meet evolving customer demands, and comply with regulatory changes, integrating activities like re-commerce, circular processing, and sustainable practices.
  • Sustainability: Championing sustainable logistics, such as using Sustainable Aviation Fuel (SAF) for air freight to minimize the risk of damage to luxury goods, is essential for brands to enhance consumer perception and meet evolving environmental responsibility expectations.

Mirella Muller-Wuellenweber, DHL customer solutions & innovation sector president e-retail and fashion, added: “The dynamics of global supply chains are perpetually in flux, especially for luxury goods originating from key European markets.

”To navigate these changes, brands must understand their market profiles - whether mature or emergin - and tailor their supply chain strategies accordingly.”

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