The luxury industry is not immune to the ebbs and flows of economic uncertainty. Even as core groups like LVMH and Kering posted double digit growth for some of its houses in 2023, smaller companies with less marketing spend will find 2024 more challenging. Geopolitically the entire world seems to be in flux, and once buoyant markets like China are also seeing its consumers spend less and with more consideration.
High spenders across the globe will be more discerning when it comes to spending on luxury items and many brands that have seen double digit growth since the pandemic may see a contraction. China is no longer the fail-safe market to offset lagging sales elsewhere, and while luxury goods are likely to outperform the general fashion industry, economic challenges are happening on a global scale.
With a growing emphasis on environmental and social responsibility, the luxury industry in 2024 is expected to witness an even greater shift towards sustainable practices. Consumers are likely to demand greater transparency, ethical sourcing, and eco-friendly manufacturing processes, influencing luxury brands to integrate sustainable initiatives into their operations, supply chains and products.
The luxury sector will continue its digital evolution, leveraging technology for enhanced customer experiences. Augmented reality (AR), virtual reality (VR), and artificial intelligence (AI) are anticipated to play pivotal roles, offering immersive online shopping experiences and personalised interactions. Customer service for top spenders will be key, with private shopping spaces, 24/7 chat support and digital concierge services.
Heritage brands have a head-start as luxury is re-defined, as shoppers move away from logo-driven product to luxury with longevity. The concept of exclusivity is likely to undergo redefinition, with an increased focus on timelessness, inclusivity and personalization. Luxury brands may explore limited editions, exclusive collaborations, and bespoke offerings to cater to diverse consumer preferences and foster a sense of individuality.
Consumer values are evolving towards mindful consumption, even in the cohort of aspirational shoppers and those buying entry level products. Luxury consumers in 2024 are expected to prioritise quality over quantity, seeking enduring products with meaningful stories. Brands aligning with ethical practices, social causes, and positive cultural impact are likely to resonate more with this conscious consumer base.