The luxury industry is not immune to the ebbs and flows of economic uncertainty. Although major corporations like LVMH and Kering reported double-digit growth for some of their properties in 2023, 2024 will be more challenging for smaller companies with less marketing spend. Geopolitically, the whole world seems to be in flux, and even in once-flourishing markets like China, consumers are spending less and more carefully.
Global slowdown
Wealthy people around the world will be more discerning when it comes to spending on luxury items, and many brands that have seen double-digit growth since the pandemic could see a decline. China is no longer a safe market to offset declining sales in other countries, and while luxury goods are likely to outperform the broader fashion industry, there are economic challenges on a global scale.
Sustainability dominates
Given the increasing importance of environmental and social responsibility, the luxury industry is expected to see an even greater shift towards sustainable practices in 2024. Consumers are likely to demand greater transparency, ethical sourcing and eco-friendly manufacturing processes, which will lead luxury brands to integrate sustainable initiatives into their operations, supply chains and products.
Digital transformation
The luxury sector will continue its digital evolution and leverage technology to improve customer experiences. Augmented reality (AR), virtual reality (VR) and artificial intelligence (AI) are expected to play a pivotal role in providing immersive online shopping experiences and personalized interactions. Serving big-spending customers will play a key role, with private shopping areas, 24/7 chat support and digital concierge services.
Redefine exclusivity
Heritage brands have a head start in redefining luxury as consumers move away from logo-driven products toward luxury with longevity. The concept of exclusivity is likely to be redefined, with an increased focus on timelessness, inclusivity and personalization. Luxury brands may develop limited editions, exclusive collaborations and tailored offerings to meet consumers’ diverse preferences and promote a sense of individuality.
Conscious consumption
Consumer values are evolving toward mindful consumption, even among the cohort of ambitious shoppers and those new to luxury consumption. In 2024, luxury consumers are expected to favor quality over quantity and look for long-lasting products with meaningful stories. Brands that align with ethical practices, social causes and positive cultural impact are likely to resonate more with this conscious group of consumers.
This article originally appeared on FashionUnited.uk. Translated and edited by Simone Preuss.