Spreedly Payments Orchestration Tracker May 2024 Banner

Mytheresa: The Aspirational Luxury Shopper Is Coming Back

Mytheresa

After years of financial challenges (and consequent consumer cutbacks) prompting luxury merchants to focus more on shoppers with plenty of cash to burn, it seems the aspirational customer is beginning to return.

Just three months ago, luxury eCommerce platform Mytheresa was telling investors about how it is turning away from aspirational shoppers toward focusing on its “top customers.” Now, the company is changing its tune. On a call with analysts Wednesday (May 15) discussing the digital retailer’s third-quarter fiscal 2024 financial results, CEO Michael Kliger highlighted spoke to this shift.

He noted that demand remains “slower” with this segment than with top customers but that aspirational shoppers have “definitely shopped more again” in recent months.

“The U.S. is by far the strongest region in luxury spend, and this is also due to the fact that the aspirational customer is coming back,” Kliger said. “The only thing I want to stress is our fast acceleration in the third quarter is really much, much more driven by our success with the big spenders while we do observe the green shoots on the aspirational customers.”

This observation comes after years of aspirational shoppers cutting back. As recently as last month, LVMH was speaking to this segment’s belt-tightening behavior.

For Mytheresa’s big spenders, Kliger emphasized the critical role of exclusivity in attracting and retaining luxury shoppers — a phenomenon that luxury companies such as Saks and Gucci have also leaned into. Kliger noted that the retailer’s collaborations and limited-edition collections in driving customer engagement and loyalty. Additionally, the company also put on “exclusive events” for its top customers around the world during fashion weeks and at other buzzy moments.

The company saw double-digit sales growth and a 12% rise in gross profit, reaching a 43.4% margin, at a time when many eCommerce apparel retailers struggle to make the economics of the model work in their favor.

Luxury goods typically command higher profit margins due to their premium pricing and perceived value, compared to mass-market apparel. Additionally, by carefully curating its inventory to include only premium and in-demand items, Mytheresa minimizes inventory risk and markdowns, optimizing its sales mix to maximize profitability.

Plus, high-income shoppers tend to be more digitally engaged. PYMNTS Intelligence’s 2023 Global Digital Shopping Index found that 40% of those who make more than $100,000/year are digital enthusiasts — those who highly demand digital shopping features. This share is considerably greater than the 33% of those who make $50,000 to $100,000 and the 27% of those who make less than $50,000 who said the same.

Plus, these affluent consumers show a marked demand for more eCommerce options. The August installment of the PYMNTS Retail Tracker® Series Report highlighted findings that 67% of luxury shoppers say that stores should feature higher levels of digital integration.

“Our clear focus on big-spending wardrobe-building top customers resulted in both, strong growth of the number of customers, as well as the average spending of top customers,” Kliger told analysts. “This highly desirable audience makes us the best positioned platform to partner with luxury brands for exclusive activations.”