Luxury brands are revising their strategies in response to shifting consumer trends, particularly among aspirational buyers who have been affected by rising prices.
In recent years, the cost of luxury goods has increased significantly, leading to a decline in purchases from aspirational consumers—those who typically buy at least one luxury item annually and spend between $3,000 and $10,000 per year, according to McKinsey & Co. Bain & Co. partner Aaron Cheris estimated that approximately 50 million potential customers were priced out of the market by 2024, as luxury prices rose by around 20% since 2021. This trend has contributed to an overall slowdown in the luxury sector.
Several brands have responded by adjusting their pricing strategies. British luxury brand Burberry, for instance, introduced more accessible product offerings ahead of the holiday season. This approach resulted in a 4% increase in third-quarter store sales across the Americas and marked the first new customer growth for the brand in two years, according to CNN.
Aspirational consumers, who often face financial pressures such as inflation and economic uncertainty, collectively contribute approximately $274 billion to the luxury market each year. Analysts suggest that focusing on lower-priced luxury items—typically ranging from $400 to $1,000—can help brands maintain their appeal to this consumer segment. Accessories such as belts, eyewear, and fragrances have seen increased interest due to their relatively accessible price points.
For example, Gucci offers a $420 belt, while Yves Saint Laurent sells perfumes starting at $98. Although Gucci reported an $8 billion revenue decline in 2024, its parent company’s Kering Eyewear division saw a 6% rise in sales, highlighting the resilience of affordable luxury items.
Burberry’s efforts to reintroduce accessible leather goods and outerwear contributed to increased brand engagement by the end of Q3. However, not all luxury brands have adjusted their pricing strategies. French luxury conglomerate LVMH, for example, continues to offer lower-priced leather goods but has not introduced entirely new affordable product lines.
Beyond pricing adjustments, many luxury brands are investing in enhanced in-store experiences. Measures such as improved sales associate training and reduced wait times are being implemented to strengthen customer loyalty and encourage repeat purchases among aspirational buyers.
While premium and high-end consumers remain a priority, the industry’s evolving approach underscores the importance of catering to a broader audience to maintain growth in a changing economic landscape.
Breaking supply chain news is just a click away at The Supply Chain Report. Enhance your knowledge of international trade at ADAMftd.com with free tools.
#AfricaLuxuryMarket #LuxuryGoodsExpansion #GlobalIndustryShifts #AfricanRetailGrowth #LuxuryTrendsAfrica #EmergingMarketsLuxury #HighEndConsumerAfrica
