【France】Who are the ‘Very Important Clients’, the New Target of Luxury?

It is no longer a secret: the luxury sector is going through a period of turbulence. Despite dizzying global sales reaching 12 figures (€363 billion in 2024 according to Le Monde), the revenues reported by the industry giants are still well below their expectations. While LVMH and Kering reported significant drops in their net profits (down 17% and 62% respectively in 2024 compared to the previous year), the consulting firm Bain & Company mentioned a loss of 50 million customers across the entire luxury market in two years. Furthermore, it predicts sector growth of between 0% and 4% in 2025. These estimates are likely to be revised downward following the announcement of customs duties imposed by Donald Trump on luxury products.

The result? To survive this hostile socio-economic climate, major luxury houses no longer hesitate to raise their prices, even tripling the price tag on some of their most popular products and sounding the death knell for any form of aspirational strategy. The goal: to very unabashedly target those now nicknamed the “Very Important Clients” (VICs), the clientele who, roughly speaking, buy a five-figure “it” bag as easily as others buy a chai latte or a croissant from Cédric Grolet. According to a Bain & Company study, “the wealthiest 2% of customers now generate 40% of the luxury sector’s total sales.”

This is certainly a small segment of the population, but one that reportedly has the good taste to spend between €50,000 and over one million euros per year on high-end products. That’s an impressive average of €350,000 annually according to a study by BCG and Altagamma. In ten years, their market share has thus doubled, rising from 12% of the sector’s revenue in 2013 to 21% in 2023, totaling €213 billion. Therefore, each VIC would spend between “200 to 250 times more than the average customer,” highlights the BCG-Altagamma study.

And that’s not all. Mirroring the multi-billionaire characters of Succession, two-thirds of VICs would belong to the category of “Ultra High Net Worth Individuals” (UHNWI), meaning those who hold “40% of global financial assets,” explains Filippo Bianchi, Managing Director at BCG, in an article for Fashion Network. In other words, these are (very) rich people who will remain so for a very long time, assuring luxury groups of spending that is five times less volatile than that of aspirational consumers and decoupled from any potential GDP variation or economic crises that would shake the markets.

Therefore, one doesn’t need an HEC degree to understand that this financial stability leads luxury brands to bet big on the purchasing power of VICs. However, attracting and retaining this clientele requires a sharp strategy, in the face of “competition that is intensifying strongly to capture their attention,” according to the BCG-Altagamma report. The latter specifies that “89% of VICs value craftsmanship and quality above all, and 85% value exclusivity and personal recognition.” Translation: they are in search of exceptional manufactured products and want to be treated like rock stars.

This explains why houses are competing in inventiveness to conquer their wallets. The Florentine label Gucci has opened the Gucci Salon, a boutique reserved for its best clients in Los Angeles, offering “unprecedented ranges and ultra-personalized appointments” for an intimate, made-to-measure shopping experience. The American Tiffany & Co. is multiplying initiatives through its high jewelry branch, inviting its VICs to order unique pieces custom-designed by artistic director Nathalie Verdeille in its renovated New York flagship.

As for the luxury platform Mytheresa, it pushes the exclusivity cursor even further by organizing confidential events at renowned designers’ locations. The goal: “to offer privileged access that money cannot buy,” states Business of Fashion in its report Selling to the 1%.