Turmoil in the global luxury goods market: "Brands are entering a new phase"

While the global slowdown and geopolitical tensions have not spared the luxury goods market, a recent report from Bain & Company shows that the industry remains strong. Luxury isn't going away—it's changing form, shifting from products to experiences and seeking a new definition in the eyes of younger generations.

In times of geopolitical tensions, inflationary fears, and growing consumer pressure, luxury isn't disappearing; it's evolving. Bain & Company , in collaboration with the Italian association Altagamma , has just published its latest report on the global luxury goods market .

The global luxury market , which reached €369 billion in 2023, is now facing its first real decline in over a decade – its value shrank by 1% last year , and forecasts for 2025 predict a further decline of 2-5% . And while it may seem like the era of limitless growth is coming to an end, Bain & Company reassures us: this is more of a correction than a collapse.

"Although short-term demand has weakened somewhat, the luxury goods market continues to demonstrate exceptional resilience. Regardless of age, consumers still want to reward themselves, strive for prestige, and celebrate success. This is what keeps luxury firmly anchored in their everyday choices. Faced with an increasingly complex environment, brands are entering a new phase—one that requires greater clarity, an understanding of the cultural context, and actions aligned with specific values," comments Katarzyna Wal, junior partner at Bain & Company.

Fashionistas at Milan Fashion Week /Shutterstock

The report shows a clear shift toward experiences: luxury today doesn't end with a Birkin bag or a Swiss watch . It's more about a private cruise, a multi-day stay in a five-star hotel, or a tasting with a Michelin -starred chef. The experience industry is gaining ground over traditional retail and is recording strong financial results.

Younger consumers, especially Generation Z , expect brands to demonstrate authenticity, ethical stances, and communication that aligns with their values. It's no longer about luxury itself—it's about why it's worth paying for. The same product, without a story, meaning, or emotion, loses value in their eyes. Millennials are becoming increasingly rational, while older customers are becoming more selective. In this context, the report notes, "the traditional multi-brand retail model is no longer working."

The luxury industry, despite revenue growth, is grappling with a significant decline in operating margins. Today, the largest fashion houses and high-end brands must not only create beautiful things but also do so more efficiently than ever before. Bain & Company emphasizes: technology , a flexible supply chain , and new models of customer relationships are not an option, but a necessity.

By 2030, over 300 million new luxury consumers will enter the market—primarily from Generation Z and Generation Alpha. Combined with a projected 20% increase in the number of affluent individuals , this provides solid grounds for optimism. However, success requires redefining what luxury means for future generations.