Playing to win in competitive luxury
What we learned from the 2025 Vogue Business Index about pricing, positioning, and premium experience
What’s the watch word for luxury consumers in 2025?
Caution.
Five years since we first worked with Vogue Business to establish its luxury brand index, what we are now seeing is a clear inflection point in luxury fashion purchasing. The overall appetite for luxury has leveled off — and in some categories, it’s in real decline.
Handbags, historically a powerhouse category, have seen a notable dip — although they still lead in absolute terms. But the sharper declines are in categories like dress shoes and small leather goods, suggesting a shift in how consumers are prioritizing their luxury spending.
In this environment, it’s not just about being desirable — it’s about being more desirable than the brand next to you.
What does this mean? Well, while the market isn’t contracting dramatically, it is plateauing. And that flat growth means it's become a zero-sum game: to grow, luxury brands now need to win share from competitors, rather than count on rising demand. Hermes, which is well known for exclusivity, has just accomplished this, overtaking LVMH as Europe’s largest luxury company.
In this environment, it’s not just about being desirable — it’s about being more desirable than the brand next to you. That intensifies the need for clarity around brand positioning, storytelling, and relevance.
Price sensitivity creeps in at all income levels
We’re seeing something that would have been almost unthinkable a decade ago — the normalization of price sensitivity in luxury.
More than half of all luxury consumers will actively wait for discounts before making a purchase if price rises further. Even among high earners — those with household incomes above €300,000 — the behavior is remarkably similar.
We saw a dramatic jump in this behavior in the second half of 2023 — likely tied to a mix of inflationary pressures and post-pandemic recalibration. While there’s been a slight softening, the numbers remain elevated.
For luxury firms, what this means is that you’re no longer just managing aspiration — you’re managing justification. Even affluent consumers want to feel like they’re making a smart choice.
Make yourself memorable
In most markets — and especially in luxury — top-of-mind brand awareness is closely linked to brand consideration. If a brand doesn’t come to mind unprompted, it’s unlikely to even enter the purchase conversation.
What’s changing, though, is who consumers are recalling. While the number of brands remembered remains steady — typically six to eight — premium names are breaking through more often than before.
People are gravitating toward brands that deliver a premium experience and a strong value narrative.
In fact, unaided awareness for premium brands has risen sharply — up 11 percentage points in just five years, from 66% in 2020 to 77% in 2025. That’s a major leap in mental availability in what is already a crowded and competitive space.
Ralph Lauren is a great example of this shift in action. In the Top 10 rankings of this year’s Vogue Business Index, it has surged seven spots to take fourth place — the biggest leap in this edition.
This speaks to a broader consumer recalibration: people are gravitating toward brands that deliver a premium experience and a strong brand value narrative. Long known for its classic, all-American appeal, Ralph Lauren may have seen a resurgence in part due to nostalgia for the pre-social media age.
Where there’s a will, there’s an opportunity
But while competition for consumer attention is fiercer than ever, here’s where we’re still seeing hopeful signs: From a low of -30% in H2 2023, the gap between top promoters and detractors has narrowed significantly — now at -14% in H1 2025. That’s nearly a 50% improvement in less than two years.
In a flat market where purchase volume growth is limited, brand advocacy becomes a powerful differentiator. It’s no longer just about being top-of-mind — it’s about being worth recommending.
Momentum is building — but it’s not automatic. To spend big, consumers want to be sure of consistently high quality and gain positive experiences, whether that’s through product innovation or personalized consultation.
The brands that continue investing in long-term trust, emotional connection, and brand value are the ones most likely to sustain this recovery. That’s the real opportunity going forward.
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