Luxury brands have withdrawn in their safe exclusive area, after exploring new avenues to win customers during COVID. The only problem is to win and keep the next generation of buyers, they must marry their need to remain elusive with a consumer who wants to share everything online.
These companies do not have time to lose. According to a spring update on the Bath & Co sector, the industry loses speed relatively quickly.
The study published Thursday shows that the value of the sector was 1.5 Billion of euros (1.7 dollars billion) in 2024, but for estimates of the first quarter of 2025, estimates of 3% compared to last year.
Even last year, personal luxury products were one of the categories that marked the most notable slowdown, going from 369 billion euros in 2023 to 364 billion euros in 2024. This marked its first contraction in 15 years – with the notable exception of the pandemic.
And the gap between winners and losses in the luxury sector is also growing, added the writers of the author Claudia d’Arpizio and Federica Levato.
The difference between the 75th higher centile and the 25th percents of the 25th centile increased by 1.5 times in the first quarter of 2025 compared to a year earlier, the market manager being continuing to load while the 20% to 30% of the sector continued to declare a reduction in growth.
Part of the problem is that consumers argue what bath & CO describes as “value equation”-, as far as it is concerned, is it enough experience, social and cultural or manufacturing congratulations-of the purchase for the high price they pay?
For a “long period”, luxury brands were trying to expand their customers to be more inclusive, known as Arpizio Fortune. This has been really reinforced in certain categories with “entry articles such as streetwear, sneakers and even beauty – all categories that could have been more relevant to young people, but also with people with less discretionary expenses”.
This strategy has “overorreted”, she added, with brands that relying too much on the conception or emblematic experiences, reducing their rhythm of innovation and, therefore, leading consumers to wonder if their expenses are really worth it.
“Last year, we had a big loss of customers – more than 50 million customers in less purchase of luxury products – especially in the young generation and a great drop in customer advocacy,” continued Arpizio. “What’s going on now that brands are trying to solve this problem and try to revive this relationship with these customers without losing their exclusivity.”
Exclusive to the online era
Returning to exclusivity is a more difficult demand when young consumers are known as the generation of social media for their propensity to publish online.
It is over time of galas without cameras, background rooms of concept bags without authorized filming: everything is available on a page for you in the moments of the end.
“Luxury has always been to show up,” continued Arpizio, who is the Bathroom & Co for global fashion, luxury products. “The previous generation showed richness and showed achievements in life, now it shows more your personality or your ability to choose your aesthetics, your quality of life.
“There is a great need, especially in generation Z, for sharing. This sharing means expressing their personality … but also a desire for conformity. These are two forces which are contradictory but in reality are a large luxury consumption engine because luxury brands can provide this compliance, but inside the luxury brand, mixing and correspondence, by choosing your own style, in the development of your own style, create your self-expression. ”
She continued: “Social media provided a huge impetus to luxury consumption because the sharing potential with a wider audience has created both more customers but also increasing their communication strategies and they therefore have a wider scope.
“So yes, they want to be exclusive, but they know the power of social media.”
