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The luxury goods market is undergoing a shift unlike any in recent memory. After two years of declining sales—dropping 3% from $417 billion (€369 billion) in 2023 to $405 billion (€358 billion) in 2025—Bain & Company, in association with Altagamma, now reports that first-quarter 2026 fell between 3% to 5% from an already weak first quarter 2025, when it declined 1%.
While the firm expects momentum to return as geopolitical and economic shocks ease—projecting a modest 2% to 4% year-over-year rebound to between $412 billion and $421 billion—the potential recovery is far less robust than after the 2008/2009 downturn. That time the decline was sharper—losing 9% over the two years—but it snapped back even stronger—up 16% from its pre-crisis level in 2007.
Regardless of how the year-end numbers work out—and I’m less optimistic than Bain—they hint at a more profound structural reset. “The luxury market is stabilizing, but this is not a return to the old rhythm; it is the emergence of a new one,” said Claudia D’Arpizio, Bain & Company’s senior partner and global leader in the firm’s fashion and luxury practice. “Consumers aren’t stepping back from luxury. They are stepping forward into a new relationship with it—one defined by meaning, not just products.”
In other words, meaning is the new currency. Luxury brands now face the challenge of amplifying that meaning—distinct from the price/value equation—to enhance people’s lives in more personal, emotionally resonant ways.
“The call to action for brands is that they need to raise their game of being relevant for people, because otherwise they are out of the game. There are lots of alternatives where wealthy people can spend their money, as on experiences that create memories which are more relevant and linked to the way they live,” shared Federica Levato, Bain senior partner and co-author of the luxury study. “Luxury goods brands need to amplify their meaning in people’s lives because, frankly, they don’t need any of it.”
Notably, luxury experiences are projected to grow between 3% to 7% this year— one-and-a-half times more than luxury goods—as experiential luxury shifts toward emotion- and purpose-led moments, from slow-travel formats to deeper immersive experiences in local culture.
Crisis Of Meaning
The luxury handbag market may be the figurative canary in the coal mine. A recent Wall Street Journal article, “Is the Luxury Handbag’s Heyday Ending?,” suggests as much, noting a 10% drop totaling $8 billion in sales from its 2023 peak.
At the same time, demand for pre-loved designer bags is on the rise, up 20% on The RealReal, the leading platform for secondhand luxury. Bain’s research confirms the shift, with about half of luxury shoppers now consulting the secondhand market before buying new.
Luxury leader LVMH—at $94 billion in sales last year, roughly four times larger than its nearest rivals Richemont ($25 billion), Kering ($17 billion) and Hermès ($16 billion)—has felt the shift more acutely. Its flagship fashion and leather goods segment, which accounts for nearly half of group sales and is anchored by Louis Vuitton, with an estimated half of segment sales, fell 8% last year and 9% in the first quarter. LVMH will report first-half results in July.
Adding insult to injury, Louis Vuitton’s brand valuation dropped more than 20% to $87.5 billion in 2026 from $112 billion last year, according to Kantar. Gina Logan, Kantar’s associate director of category insights, and her team observed that a luxury brand’s heritage aura that once defined luxury—“Reverence was the ritual”—is losing ground. “For decades, luxury lived in glass boxes — immaculate, distant, and mysterious.”
Now consumers don’t just buy luxury: “They interrogate it. They’re turning it inside out,” in a search for deeper, lasting meaning. “In their world, what’s rare isn’t material—it’s meaning.”
Historically, the meaning of luxury was defined by status and reserved for a chosen few elites, according to Bain. As access widened through entry-level pricing and aspirational shoppers, luxury evolved into a reward carrying an emotional payoff. It then shifted again toward self-expression—“nurturing selfhood through identity.”
Today it has entered a new phase: Amplification. Consumers may still draw upon some or all of the previously valued meanings, but increasingly, they are moving from social validation toward self-actualization. Luxury has shifted from the pursuit of more possessions toward inner well-being—redefining the luxury proposition from being admired by others to feeling personally fulfilled.
As consumers seek deeper meaning, they are holding luxury goods brands to a higher standard—raising the bar that justifies a new purchase.
Emergence Of The Permission Economy
Buying that new designer handbag now has to satisfy some deeper personal need, not simply offer a stylish way to tote belongings or signal one’s spending power and social status. After the post-pandemic luxury shopping spree, it takes more than a fancy logo or new design to earn space in consumers’ already overflowing closets.
“Luxury is moving from what you wear to what you keep,” said luxury insider Robert Goldberg. Looking ahead, luxury brands need to master the permission economy— earning the right to engage with the affluent consumers.
“The new scarcest currency in luxury isn’t money. It’s permission—the internal clearance a consumer grants themselves before a purchase is allowed to happen,” explained Chandler Mount, founder of The Affluent Consumer Research Company, a firm with which I am associated.
ACRC’s on-going research among affluent consumers— households averaging $365,000 income and living in U.S. zip codes that luxury brands covet most—shows heightened expectations before making a new purchase:
- 81% want luxury purchases to remain meaningful over many years
- 52% agree they are buying fewer luxury items but expecting more from each
- 47% actively think about future regret when making high-value purchases
The later may be the most significant shift in luxury consumers’ new pre-purchase meaning evaluation. “Consumers are no longer just asking ‘do I want this?’” he explained. “They’re running a mental simulation—imagining their future self, looking back at the purchase. Luxury is no longer judged only on desirability—but on whether it will still deserve space in a future life.”
Activating Permission
Meaning is unique to each individual and intangible in a way that makes it difficult for brands to build a strategy around. AI may help, but it’s no substitute for deep qualitative consumer insights. However, the concept of earning the consumers’ permission is more actionable. The key is to understand that visibility, loud signaling and perpetual urgency are no longer the levers that matter.
Brands that will win in the permission economy are those that behave as stewards of the customers’ time and attention. They are more selective about reaching the right audience through relevance, intimacy, and long‑term desirability—offering something people want to keep forever.
“The affluent consumer in 2026 is not withholding desire. They are withholding permission,” Mount concludes. “And permission, unlike desire, cannot be manufactured with a campaign. It is the accumulated result of every product decision, every communication choice, every service signal a brand has made.
“The brands that understand this earliest have the clearest runway. The ones that don’t will keep optimizing the wrong variables— and wonder why conversion isn’t following. Permission is earned—not assumed.”
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