Luxury Brands Lost Millions of Clients — Primarily Young People

Luxury fashion boutiques on New Bond Street in London. Photo: Betty Laura Zapata / Bloomberg via Getty Images

According to the analysis by the French research institute Les Echos Études, highlighted by the publication Capital Luxe, in recent years, the luxury goods market has faced a massive 'erosion' of its client base.

The main blow fell not on ultra-rich buyers, but on the so-called luxury-oriented clientele — middle-income individuals who occasionally purchased expensive items and generated mass demand.

It is this group, comprising about 95% of all luxury consumers, that provides over 60 percent of the economic value of this market. For two decades, it has been the foundation of its growth.

However, in recent years, this model has experienced a serious breakdown. According to Les Echos Études estimates, luxury brands lost up to 60 million clients in 2023–2024 alone. If we consider the three-year period after the pandemic, the total number of lost buyers could reach 70–80 million people. Predominantly, this refers to young consumers, including Generation Z, for whom luxury has gradually ceased to be an achievable goal.

What Are the Reasons?

This process has both structural and market-specific reasons. Consumer behavior has been influenced by rising inflation, increasing cost of living, geopolitical instability, and the weakening of key markets, including the Chinese market, which remains one of the main drivers of global luxury. However, according to analysts, the luxury industry's own strategy played no less significant a role.

Systematic price increases and a focus on maximum exclusivity have led to many iconic products becoming virtually inaccessible to middle-income buyers. Luxury is increasingly less associated with an approachable dream, and more often — with a closed club for the chosen few.

As a result, young buyers are turning away from classic luxury brands, preferring experiences, travel, services, and alternative forms of consumption.

What to Do?

The massive loss of buyers is forcing the luxury industry to urgently review its business model. A key challenge is the return of young consumers and middle-income clients, who demand greater accessibility — both in pricing policy and in the purchasing process itself.

This dynamic is pushing brands to develop new directions. More and more brands are exploring the pre-owned market (used items) and strengthening their entry-level product lines.

Parallel to this, the philosophy of boutiques itself is changing. They are ceasing to be merely points of sale. More attention is being paid to the visiting experience, the atmosphere, and the store's ability to 'speak' to the customer in their own language.

Modern consumers, especially the 'digital generation,' are dictating new trends. For them, brand status is no longer as important as its authenticity, transparency of product origin, and the presence of deep meaning. This forces fashion houses to rethink their communication, focusing on sincerity and values, rather than just prestige.

Against this backdrop, new players are emerging, offering unconventional luxury concepts. This is evident, for example, in the prestigious hospitality industry segment, where young entrepreneurs are entering the market with a refreshed view on luxury and service.

The overall strategy for the industry now lies in flexibility: it needs to preserve historical exclusivity, but make it more modern and 'democratic'.

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