Editor’s Note
This analysis examines the shifting dynamics of the luxury market, where slowing growth and evolving consumer expectations are redefining value beyond mere product ownership.
The luxury industry has undergone significant changes in recent years. Brands are feeling the effects of market volatility as price increases outpace quality improvements, and luxury consumers demand more than just the physical products.
Here’s a deeper look at the landscape of luxury in 2026:
- Market slowdown: Credit card spending on luxury items in the US declined in the first five months of 2025 compared with 2024, per eMarketer. Yet things appear to be stabilizing: over half of consumers plan to maintain or increase their spending on luxury items heading into 2026.
- Brand symbols are no longer a priority: Eighty-eight percent of high-income consumers now define status by knowledge rather than material possessions. As a result, luxury brands need to justify their premium prices by offering experiences alongside high-quality products.
- Watches and jewelry outpace: These categories generated the highest revenue in 2024, with sales totaling $152.95 billion. They outperformed luxury fashion, cosmetics and fragrances, and leather goods.
Channel transformation and omnichannel commerce
Price sensitivity opens the door to luxury resale growth
Evolving consumer behavior and loyalty patterns
Personalization and experiential luxury evolution
Operational efficiency and technology integration
Luxury brands like Ralph Lauren, Calvin Klein, and Levi’s have all ramped up their direct-to-consumer businesses instead of relying on wholesale channels. It makes sense: DTC offers direct access to customer data, protects profit margins, and maintains control over your brand.
The challenge, however, is a demand for frictionless omnichannel experiences. As social commerce accelerates and digital discovery becomes second nature to luxury shoppers, brands need to offer not just different sales channels, but a connected experience between them. The prize? A 150% increase in customer spend and a threefold boost in loyalty.
Yet to offer these seamless omnichannel experiences, luxury brands traditionally had to stitch different touchpoint solutions together, resulting in disconnected systems. Data delays, lost personalization, and an inconsistent brand experience: none of this screams “luxury.”
Take luxury apparel brand Orlebar Brown, for example. They switched to Shopify’s unified commerce platform to solve these challenges, while expanding their international presence. The result: a 50% reduction in total commerce cost of ownership.
The luxury market is more diverse than ever—it’s no longer just the ultra-rich who are buying luxury goods. Per McKinsey, middle-income shoppers plan to splurge on discretionary items at a rate comparable to high-income consumers.
Yet despite their consumers’ relative affluence, luxury brands are contending with increased price sensitivity. The Vogue Business Index found 40% of consumers said they would shop less for designer fashion in 2025, and 27% said they would switch to buying less expensive products. More than half planned to wait for sales or discounts before buying luxury fashion items.
There are multiple factors contributing to this shift, from the rising cost of living to the weakening dollar. A standout influence, however, is sustainability.
Almost half of the wealthiest consumers in the US consider a brand’s social responsibility as important when making a purchasing decision. Some 22% have already boycotted a brand or product for its poor sustainability or ethical values.
Brands like Balenciaga and Oscar de La Renta are leaning into their customers’ sustainability concerns with luxury resale programs that promise access to designer goods without the “brand new” price tag. Per BCG, this secondhand fashion market is growing three times faster than the firsthand market.
