The Way Forward for Luxury Starts at the Core: Re-Center on Top-Tier Clients and on Its Fundamentals

By  Filippo Bianchi Guia Ricci Lucia Casagranda Beatrice Lemucchi Sebastian Boger, and  Stefania Lazzaroni
Article

For the first time in over a decade (pandemic aside), the personal luxury market is facing a lack of growth. For the 11th edition of True-Luxury Global Consumer Insights, BCG and Altagamma have partnered to explore what’s behind recent shifts in the sector—and what will shape the way forward.

This year’s report delivers insights from 7,000+ luxury consumers based on quantitative surveys, focus groups and in-depth interviews. To analyze consumer spending and behavior with optimal focus and accuracy, the report also leverages Altrata’s Wealth-X database of more than 150,000 high net worth individual (HNWI) profiles, plus interviews with industry CEOs, executives, client advisors, experts, and partners.

The data signals a pressing need to rethink the way luxury brands define and serve value. Aspirational consumers, who now make up 60% of the market, are reducing or pausing their spending, while the wealthiest top-tier clients have reaffirmed their position as the key engine of long-term growth—comprising less than 1% of the market while generating 23% of the value. To succeed in the years ahead, brands must refocus on top-tier clients (“Beyond Money” consumers according to the BCG consumer pyramid), and return to the fundamentals of what true luxury really means.

VOLATILE ASPIRATIONAL CONSUMERS SLIP AWAY

This year’s True-Luxury Global Consumer Insights dives deep into the history of luxury, looking back to its roots in the 1800s when it was the domain of the truly affluent. Over time, the market expanded into ready-to-wear, beauty lines, global flagships, social media, and more, helping it to scale brilliantly—until now. This democratization brought massive growth, with Aspirational consumers (those spending less than €5,000 per year on personal and experiential luxury) eventually accounting for over 70% of market volume. But in a race for scale, some of the soul of luxury was lost, as much of the industry traded exclusivity for reach, exchanging stability for volatility.

As a consequence, the segment that previously fueled growth is now revealing its fragility: Aspirational consumers have declined by 13 percentage points in market share since 2013 as affordability concerns continue to predominate. In the past year alone, around 35% of these consumers either reduced or paused their luxury spending, diverting it to savings and investment, wellness, and second-hand purchases in particular. Around 50% of these customers now feel financially vulnerable.

Today, brands with a client base comprised of more than 50% Aspirational consumers are seeing the steepest declines, underperforming sharply over the past 12 months. By contrast, brands that have stayed loyal to core top-tier clients are not just weathering the storm—they’re thriving.

THE WAY FORWARD? IT STARTS AT THE CORE, REFOCUSING ON TOP-TIER CLIENTS WHO ARE AMPLIFYING THEIR SPEND

In a market shaped by volatility and saturated with noise, growth will be increasingly fueled by deepening relationships with those who matter most: luxury top-tier clients.

THE WAY FORWARD STARTS AT THE CORE

The luxury brands that will win in the years ahead will be those that have the courage to center their strategy around the core, delivering excellence to the clients who define what true luxury means. Top-tier clients—though few in number—will play an increasingly critical role. This strategic refocus also involves a return to the heart of what has always made luxury exceptional: personal relationships, the client experience, refined quality and enduring trust.

Brands will need to harness human-led clienteling, enhanced by GenAI that can boost personalization and empower advisors with deeper insight. They’ll also need to curate the customer journey to recenter intimacy and relevance, both in-store and beyond.

Leaders in the sector will focus on fundamentals across the value chain, ensuring craftsmanship and consistency by owning the processes that define product excellence. They’ll need to boost their recognition of where the top-tier clients can be found and what they want, with richer data collection and more sophisticated segmentation.

To meet and retain top-tier clients, brands must recalibrate—not through scale, but precision; not through ubiquity, but intimacy. In doing so, they’ll take a crucial step toward building a stronger luxury industry by returning to what made it exceptional in the first place.

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