eCommerce: U.S. Luxury Market

U.S. Luxury Goods Market: Key Insights

• Estée Lauder Leads U.S. Luxury Brands: The American luxury brand will be the best performer in the U.S. luxury market in 2022, with net sales of $17.7 billion, well ahead of its competitors.

• Tapestry Tops Online Sales Share: Among the top five companies, Tapestry Inc. leads in online sales share, with 30% of its revenue generated online, equivalent to US$2 billion, surpassing Estée Lauder's share in percentage terms.

• The Gaining Importance of Online Sales: While traditional offline channels still dominate luxury sales, Estée Lauder's significant share of online sales highlights the growing importance of eCommerce in the luxury sector, with 22% of sales coming from online channels.

• Global Luxury Market Growth: The luxury market continues to grow, with Asia leading in sales, followed by the Americas, highlighting the importance of the U.S. luxury market in the world.

Which company performs the best in the U.S. luxury market, and what proportion of their turnover is generated online? In addition, how has the leading company performed in terms of net sales and online sales share according to our ranking? Let's have a look.

Luxury Goods Market: Top Five Companies by Net Sales in the U.S. in 2022

The Estée Lauder Companies emerges as the top performer in terms of net sales in the United States in 2022. The succeeding companies, although in the top five ranking, have visibly lower sales than Estée Lauder.

In 2022, Estée Lauder generated US$ 17.74 billion in sales. 78% of its revenue in 2022 – a substantial US$ 13.83 billion – came from offline channels, while 22% of it came through eCommerce channels. This suggests that the company adheres to the traditional sales model in luxury, which remains to be offline. At the same time, the share of online sales is significant and may become even more important in the future.

At the second position, considerably behind Estée Lauder, is PVH Corp. It clocks in with US$ 8.48 billion in net sales. Tapestry Inc. and Ralph Lauren Corporation follow it with US$ 6.68 and US$ 6.22 billion in sales respectively. With US$ 5.65 billion, Capri Holdings is the fifth-best performer by net sales.

Tapestry Generates the Highest Share of Its Sales Online

Our data also reveals the offline and online division of sales for the five leading companies by net sales in the United States. Tapestry Inc., although third by net sales, generates the highest share of its sales online at 30%. On the other hand, Capri Holdings relies the least on online sales, with just 17% of its total revenue coming from eCommerce channels.

Estée Lauder, owing to its large-scale operations, made more online sales in absolute numbers than its national competitors in the top five ranking. For instance, in 2022, it made US$ 3.9 billion in online sales, which is more than double the online sales of US$ 1.7 billion made by PVH Corp.

However, Estée Lauder’s online sales share is relatively small at just 22%. In comparison, the leading company in terms of online sales share in our ranking is Farfetch, which generated an overwhelming 92% of its sales online in 2022.

The Estée Lauder Companies: Net and Online Sales Development from 2020 to 2022

Estée Lauder is significant not only for its highest net sales in the United States, but also for its strong position beyond the national level. The company ranks fifth in terms of global net sales in our ranking, which makes it an important international contender in the luxury industry.

A look at the net and online sales development for Estée Lauder between 2020 and 2022 reveals that its sales grew throughout the years. Moreover, its usage of eCommerce has also matured in the intervening period.

Estée Lauder’s total sales grew at a compound annual growth rate of more than 11% between 2020 and 2022. In this period, net sales increased from US$ 14.3 billion to US$ 17.7 billion.

Looking at the company’s online sales, an upward trend becomes visible in 2021. In this year, although a sizable portion of sales was still made offline, online sales hit US$ 4.09 billion, and constituted a quarter of the total sales made by the company. This is the highest online sales figure that the company registered during the pandemic period, and it falls in line with the larger online shift in luxury observed in 2021.

In 2022, as the lockdown mandate loosened and stores reopened, Estée Lauder’s online sales fell. Interestingly, however, the drop was not as dramatic as the previous year’s rise. Absolute online sales underwent a single-digit growth dip - of less than 5% - to stand at US$ 3.9 billion and still made up for 22% of total sales, as was also the case in 2020 during the thick of the pandemic.

This development indicates that while the pandemic situation had pushed Estée Lauder to better utilize online channels in 2021, the effects of this shift have lasted beyond one year. Despite its continued loyalty to the offline model, the company is likely to grow its online presence in the future, alongside offline or through strategic use of omnichannel retail.

Luxury Companies: FAQ

Which Company Is the Largest in the United States by Total Sales?

The Estée Lauder Companies is the largest in the United States in terms of net sales. It also leads in absolute online sales, although its share of online sales is smaller than several other top ranking companies.

What Is the Largest Market for Luxury Goods?

At a regional level, the largest market for luxury goods is APAC (Asia Pacific). Per ECDB’s report on the Luxury eCommerce market, APAC accounts for 40.8% of total luxury sales in 2022. It is followed by the Americas at 30% and EMEA at 29.3%.

How Big Is the Luxury Fashion Market in the U.S.?

The Luxury Fashion market in the United States is expected to grow at a compound annual growth rate of 1.84% from 2023 to 2028, according to Statista. Most revenue for the luxury fashion segment worldwide is also generated in the U.S., with a market volume of US$ 27.15 billion projected in 2023.

Is the Luxury Market Growing?

The global luxury market is anticipated to grow in the coming years. The projected compound annual growth rate (2023-2028) of the market is 3.39%, per Statista.

Who Is Generating the Most of Their Net Sales Online?

In 2022, Tapestry, Inc. generated 30% of its total sales share online, which is equal to US$2 billion. Tapestry earned the most online sales in percentage terms, but The Estée Lauder Companies Inc. produced more online sales in monetary terms with US$3.9 billion.

Why Is There a Shift Towards Online Channels?

Due to the COVID-19 pandemic, retailers of luxury goods were forced to establish an online channel to maintain their growth, while offline retailers were forced to close for a period of several months.