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Invisible Dynamics

The Luxury of being believed

Writer: Elena Menichetti
Elena Menichetti
3 days ago
6 min read

What consumers are revealing about luxury’s crisis and the decisions that helped create it

 


A luxury purchase contains an act of trust.

 

The customer cannot independently verify every hour of craftsmanship, every production decision or every claim about provenance.

Part of what they buy is the belief that the house has protected standards on their behalf.

 

This makes luxury unusually dependent on the relationship between what a brand promises and what its organisation actually delivers.

 

The sector’s recent difficulties invite a deeper question:

what happens when a business continues to command the price of that trust while consumers begin to question its foundations?

 

The answer requires looking beyond the slowdown itself, into the decisions that preceded it and listening carefully to what customers are saying.

 

The consumer objection is becoming more precise

The clearest recent evidence comes from BCG and Altagamma’s 2026 research, drawing on more than 10,000 luxury respondents.

Seventy per cent reported walking away from a purchase because they considered the price unjustified. More than half of those consumers nevertheless stayed within the brand or the luxury sector, choosing another product or competitor.

Design, craftsmanship and lasting appeal were the leading purchase drivers; logo visibility ranked last across product categories.

 

These findings suggest a discriminating customer, still willing to buy, but increasingly unwilling to accept the brand name as sufficient justification.

 

Earlier consumer testimony gives this objection a human voice.

In a January 2025 Vogue Business survey of almost 1,000 readers, one respondent observed:

 

“Secondhand products are, paradoxically, of better quality than the recent products of the same brand.”

 

Among respondents who had reduced luxury spending, 41 per cent cited insufficient value to justify the price. This was a readership survey, rather than a representative sample of all luxury consumers, but it documents a specific fracture in perception.

 

That perception deserves careful handling.

It does not establish an industry-wide deterioration in manufacturing quality.

It does establish that some customers no longer experience the connection between price and quality as self-evident.

 

For a business built on confidence, that distinction is commercially significant.

 

Why raising prices appeared to make sense

The decisions behind the current tensions were made in an environment that rewarded them.

 

According to McKinsey and The Business of Fashion, price increases accounted for more than 80 per cent of luxury’s growth between 2019 and 2023.

The period produced exceptional profitability, while the largest brands used their scale to strengthen visibility and desirability.

 

Under those conditions, increasing prices could appear to serve several objectives simultaneously: supporting revenue, reinforcing positioning and extracting more value from strong demand.

 

The deeper organisational risk is the inference drawn from success.

 

When customers continue buying after repeated increases, leaders may read the transaction as proof of enduring attachment.

Yet a purchase reveals willingness to pay at a particular moment.

It says less about whether the customer feels respected, whether expectations are rising faster than delivery, or whether they intend to return.

 

This is an interpretation of the business dynamic, rather than a claim about any individual executive’s intentions:

a strategy can become progressively more fragile while its financial results still validate it.

 

The feedback arrives late.

 

Expansion changed the promise the organisation had to fulfil

Growth also brought a more demanding operational task.

 

A larger business needs more products, more client relationships and greater consistency across locations. Craftsmanship, creative distinctiveness and personal attention must survive that expansion.

 

McKinsey explicitly identifies a failure of alignment here:

rapid expansion increased overexposure, while some brands raised prices without sufficiently adapting creative strategies and supply chains to their new scale.

The report links those choices to a weakening of the value proposition.

 

The systemic question is whether the organisation’s capacity to produce excellence grew at the same pace as its capacity to sell the promise of excellence.

 

Marketing can expand recognition quickly.

Developing skilled artisans, experienced advisers and reliable supplier relationships takes time.

 

When those different speeds are managed as though they were interchangeable, the gap eventually reaches the customer.

 

The industry expanded aspiration, then made participation harder

Luxury’s expansion into ready-to-wear, beauty, global retail and digital communication created a much broader audience.

BCG’s 2025 analysis describes aspirational customers as a major engine of that expansion.

 

But approximately 35 per cent of aspirational consumers in its research had reduced or paused luxury spending over the preceding year, and around half felt financially vulnerable.

 

Economic pressure matters.

It would be misleading to explain this withdrawal entirely through disappointment with brands.

 

Yet there is a strategic tension in cultivating a large audience’s desire to participate while repeatedly increasing the financial threshold of participation.

 

The same customer who once entered through an attainable purchase may gradually feel that the relationship has become one-sided:

their aspiration remains useful to the brand’s cultural visibility, while their purchasing power no longer appears sufficient to earn its attention.

 

That is a possible emotional consequence of the model, rather than a universal consumer response.

It helps explain why affordability and perceived fairness need to be considered together.

 

More contact did not necessarily create a closer relationship

The dissatisfaction extends to customers with substantial spending power.

 

In BCG and Altagamma’s 2025 research, 65 per cent of top-tier clients felt overwhelmed by excessive brand communication and insufficient personalisation.

Eighty per cent preferred dedicated spaces offering privacy and attentive service.

 

Here, the problem concerns the quality of attention.

 

A brand may know a customer’s transaction history while understanding little about their life.

It may increase the frequency of contact without increasing its relevance.

 

This creates another misleading organisational signal:

activity is visible and measurable, while the experience of being understood is harder to capture.

 

A client can be contacted constantly and still feel unknown.

 

Consumers are changing what they ask luxury to do

The competitive landscape is also becoming more personal.

 

McKinsey’s 2026 research, based on more than 2,000 luxury clients in the United States and China, identifies emotional connection as a leading driver of desirability.

Travel ranked first when respondents considered how to spend additional discretionary income. Exclusivity increasingly involved recognition, belonging and meaningful access, with differences between the two markets.

 

The implication reaches beyond product categories.

 

A purchase competes for a place in someone’s life.

Its value depends partly on what else that money, time and attention could make possible.

 

A beautifully made object can still hold profound meaning.

But the brand must understand which meaning the customer is seeking, rather than assuming that visible prestige remains the answer.

 

Recovery will not resolve every underlying tension

The evidence does not support treating the entire sector as uniformly declining.

Bain and Altagamma’s June 2026 update described gradual stabilisation and forecast growth of 2–4 per cent for personal luxury goods during the year.

Those were forecasts, subject to economic and geopolitical conditions.

 

Renewed sales would be welcome.

They would not, by themselves, demonstrate that every damaged relationship had been repaired.

 

The leadership task is to recognise what different measures can reveal.

 

Revenue records what customers have paid.

It cannot fully explain what they believe they received.

Marketing reach records exposure.

It cannot establish intimacy.

A higher average transaction can coexist with a narrowing customer base.

 

A systemic reading brings those signals back together.

 

It asks whether pricing, creative ambition, production capacity, supplier relationships and the retail experience still support the same promise.

It also asks whether the people closest to the customer can communicate disappointment upwards before it becomes a financial result.

 

The difficult questions belong inside the organisation:

 

What are customers being asked to believe that they can no longer readily experience?

 

Which standards have become harder to protect as the business has expanded?

 

Where have commercially successful decisions accumulated a relational cost?

 

And what would the brand need to change for its price to feel convincing again?

 

Luxury has always asked people to pay for more than an object.

 

Its enduring responsibility is to make that “more” tangible.



Sources

McKinsey & Company × The Business of Fashion (13 January 2025). The State of Luxury: How to Navigate a Slowdown.

Reuters (25 June 2026), reporting on the Bain–Altagamma market update. Luxury Market Shows Early Signs of Recovery in Q2 Despite Middle East War, Bain Says.

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