Five luxury trends to watch in 2025

Last year was tough for the luxury market. According to Bain & Company, sales of personal luxury items, including apparel, jewellery, handbags, watches, cosmetics, and the like, fell by 2% in 2024, with the China luxury market alone falling by 20-22%. Although a 2% dip may not appear to be a huge loss at first glance, consider that globally this is a US$386 billion retail sector.

2025 is already showing signs that it may be another tough year for luxury brands. Today’s demographic of a luxury consumer is very different from the past, with Millennials and Gen Z making up approximately 40% of the market. The emerging Gen Z trend of “No Buy 2025”, which promotes the idea of underconsumption, will likely have an adverse impact across all retail sectors, including luxury. But there is also a silver lining to the changing face of luxury consumers: these emerging consumers are driving many of the trends that will shape the market during this year and many more to come. This means that marketing and communications strategies will also have to adapt to this changing landscape.

While changes and trends in the luxury market are often slow moving, there are a few that have been quick to emerge already this year. The following are a few we’re seeing that are especially worth noting for marketers, regardless of sector, since they will eventually expand beyond the luxury marketplace:

AI and Technology (of course) Artificial intelligence is inescapable, and luxury marketers are harnessing AI to create more personalised brand experiences for consumers. Hong Kong-based Lane Crawford, Louis Vuitton and others are using AI and data to help individualise shopping recommendations for online shoppers. This contemporary approach to the traditional retail practice of “clientelling”—where your personal shoppers know your style, sizes, budget, and would alert you to new arrivals—is winning new customers and gaining new profits.

AI and technology is also pushing hyper personalisation towards warp speed. Many brands are already using AI to analyse trends, social media, and purchase patterns to help design new collections. However, innovators like Yves Saint Laurent Beauty have gone a giant step further creating the Rouge Sur Mesure Custom Lip Color Creator. This portable device is paired with an app that can colour match and make recommendations, then produce a single application of lip colour based on the results.
In short, AI and technology will continue to reshape how consumers shop and how we market to them. For example, how do you shape a brand point of view when it can morph to a certain degree, to align with the consumers’ preferences?

Curation Perhaps a foreshadowing of the “No Buy 2025” movement, today’s luxury consumers are buying less, but buying better. While spending may be relatively the same as past years (albeit slightly less), those purchasing personal luxury items are eschewing fleeting trends and are actively curating purchases based on quality and design that will last for years, if not generations. In other words, they are adopting a collector’s mindset with a focus on investment.

A beneficiary of this shift in behaviours is the pre-owned luxury market, which grew by an estimated 7% in 2024 to reach US$50 billion. Pre-owned luxury items allow buyers to curate the brands and items that they covet, but often at a fraction of the price, as well as serving as a more sustainable means of buying. (Spoiler alert: we’ll talk more about sustainability later.) For the truly savvy luxury consumer, the pre-owned luxury market can sometimes also deliver a hidden treasure: provenance. Much like artwork, purchasing a handbag, watch or fashion item that was once owned by someone notable, can sometimes transform it into an investment with growth potential.

Culture Part of the appeal of luxury is being part of an elusive club of sorts, even if that desire is subconscious. As luxury items have become accessible to a wider range of consumers, the rules of this club have changed, and culture is now the new currency in luxury. In 2025, luxury brands will continue to drive meaningful cultural initiatives. According to Dr. Federica Carlotto, Program Director of MA Luxury Business at Sotheby’s Institute of Art, who also authored Luxury Brand and Art Collaborations: Postmodern Consumer Culture, “Luxury brand and art collaborations have increasingly promoted ‘cultural capital’ as a status badge for luxury consumers. In the past, the possession of or access to luxury goods and experiences was exclusively based on the elites’ purchase power, which conveyed their economic and social capital. Collaborations with artists add a cultural layer to luxury consumption, providing consumers and audiences with a perceived sense of connoisseurship.”

Some terrific examples of brands using culture as a point of differentiation and a meaningful marketing tool include Van Cleef & Arpels, which supports contemporary dance through its Dance Reflections initiative. Since 2022, the Maison, in collaboration with international performing arts partners, has presented dance festivals in the United Kingdom, United States, Hong Kong, and Japan, with the goal of “supporting choreographic heritage, nurturing contemporary creation and bringing this artistic universe to the widest possible audience.” Another example from the luxury travel sector is The Peninsula Hotels’ Art in Resonance programme, which, with a curatorial hand from London’s prestigious V&A Museum, commissions new works of art from emerging and mid-career artists to be on display across their properties.

For marketers, understanding how to harness the power of culture and become part of that conversation will be vital as consumers continue to seek this deeper sense of communal belonging and validation.

Sustainability While sustainability may recently have been prioritised in some corners of the global economy, luxury consumers are leaning into this value and continue to prioritise sustainability when considering their purchases. Whether that includes ethically sourced materials, supporting local artisans, or upcycling vintage fashions, these individuals are using the power of their wallets to make a statement.

Stella McCartney, a long-time and vociferous proponent of luxury sustainability within her own brand, was recently named by LVMH to serve as Global Ambassador on Sustainability, with the task of advising Bernard Arnault and the conglomerate’s executives on sustainability issues.

Such moves can often lead to claims of “greenwashing” but the Millennial and Gen Z luxury consumers that are a driving force behind this push for sustainability are not easily fooled on these matters. Transparency and reporting have become crucial tools to back up sustainability claims. And with the pre-owned luxury market continuing to gain market share and divert revenue from the bottom line, luxury brands have little choice but to comply with sustainable practices, lest they risk being left behind, or heaven forbid, fall out of fashion.

Experiential Brand experiences will continue to have a growing presence in the luxury market in 2025, with data showing that this strategy does indeed drive sales. According to a study by Event Track, 98% of consumers feel more inclined to purchase after attending an activation, with consumers also stating that experiential events help them better understand a brand and its ethos. Not only does experiential marketing allow us to create customised moments that target highly specific demographics, it also allows us to form an emotional bond with our clientele, helping to ensure brand loyalty down the line.

A brilliant example done exceptionally well is the recent “Crafted World” exhibit by Loewe, which debuted in Shanghai in 2024 and demonstrated a perfect melding of experiential and culture. The immersive experience tells the nearly 180-year history of the Loewe brand, from a leather-maker in the 1800’s, to its position at the forefront of fashion today. But it does so by juxtaposing art works that range from ceramics by Pablo Picasso and the Japanese duo Suna Fujita, to sculpture by Irish artist Siobhán Hapaska, and traditional Spanish pottery. The end result? An indelible pairing of superior craftsmanship and artistry with the fashion house, providing even more reason to justify a splurge on that new handbag.

Wrapping it up with a bow on top In conclusion, yes, 2025 is going to be another bumpy year for the luxury market. But like every sector in every industry, adversity often leads to innovation. These trends are just the beginning of things that we’ll see driving luxury sales. For those in marketing and communications, it is vital that we watch the luxury space closely to see what’s on the horizon. Luxury may not always do something first, but as the name implies, they simply do it best.