Is it really wise for fashion to focus only on the ultra-rich? The luxury consumer landscape is changing

For the first time since the 2008 financial crisis—excluding the post-pandemic boom—the global luxury market has experienced a 1% contraction, as reported in the recent True-Luxury Global Consumer Insights 2025 by Boston Consulting Group and Altagamma. This figure marks a new beginning for a sector that, after a rebound between 2021 and 2023, is now entering a new phase defined as a “reset”, dominated by uncertainty and fluctuating demand. The initial growth of luxury, which began in the early 2000s and ended with the financial crash of 2008, was fueled by a growing democratization of fashion and an expansion of the consumer base that opened the doors to aspirational customers who, in large numbers, drove tremendous sales. Today, however, not only has the macroeconomic context become more unstable, but consumption dynamics are being reconfigured, primarily due to the rise of experiential luxury: customers are increasingly seeking emotions, memorable moments, authenticity, and greater value-for-money over mere ownership. This means that the fashion system must decide where to place its bets: on the many purchases of aspirational customers or the fewer, but highly significant, ones of top-tier clients. At the moment, the trend favors the latter – but is it really wise for fashion to focus only on the ultra-rich?

At the root of the crisis that is sending the fashion world into a panic lies a radical shift in the global consumer landscape. First, there is a decline in Chinese luxury consumers, who went from accounting for 33% of global spending in 2019 to 25% in 2024 – a number expected to drop another 5% this year, due to the country's economic performance. However, it is the gradual disappearance of aspirational consumers that currently represents one of the luxury sector’s biggest challenges. Historically the industry's largest base, they have dropped from accounting for 74% of global spending in 2013 to 61% in the coming months. As the report explains, due to rising prices, loss of perceived value, and increased financial caution, 35% of aspirational consumers have already reduced or halted their luxury spending in the past 12 months, and 65% plan to keep it steady or reduce it further in the next year. It's no surprise that aspirational clients have disappeared: with an annual luxury shopping budget under €5,000, they tend to spend when national economies are strong, whereas wealthier clients tend to spend counter-cyclically, meaning regardless of market fluctuations, reinforcing their position even during crises.

A shift in the client base

A third of aspirational clients have reallocated their budgets to other categories: 22% to savings or financial investments, 13% to wellness and longevity treatments, another 13% to second-hand luxury, 12% to technology and innovation, 12% to premium fashion and fast fashion, 10% to hospitality and fine dining, 10% to furniture and design, and 8% to other sectors. While the redistribution of spending by less affluent clients might appear to destabilize the consumer pyramid, the share of top-tier consumers (the smallest group, representing 0.1% of the population or 600,000 individuals in 2024) is responsible for 23% of total spending in the sector, amounting to about €236 billion. The lower tiers, which include both aspirational clients spending under €2,000 and entry-level clients spending between €5,000 and €20,000 per year, still make up 90% of the market but contribute only 55% of total spending. Luxury seems to have forgotten aspirational clients after noticing that, in the post-pandemic period, brands with a clientele composed of at least half aspirational consumers recorded declining profits, while those focused on top-tier clients continued to grow.

While elite consumers, who represent a third of the market and the tip of the client pyramid, remain the main targets for luxury, the rest of the base is crumbling, a victim of an exclusive commercial policy tailored entirely to the ultra-rich. To confirm how important the entire pyramid is for luxury, the report also provides data showing that the age of high-end brand enthusiasts is getting younger, with 70% of Gen Z consumers still identifying with a brand compared to 67% of Millennials and 55% of older generations.  
 

A boutique or a spa?

Top-tier clients have an annual purchasing power exceeding €50,000, often far more than that. Their centrality to luxury's future is supported by the constant growth in the number of global ultra-high-net-worth individuals (over 940,000 in 2024), whose combined wealth will grow from €68 trillion to over €103 trillion. 46% of this wealth is concentrated in North America, followed by Europe (24%) and China (11%). This evolution presents a new challenge for luxury brands: to intercept and serve these global consumers whose spending habits go far beyond purchasing personal goods. Top-tier clients spend an average of over €500,000 annually, with allocations in categories such as jewelry and watches (34%), wellness and longevity treatments (21%), hospitality and fine dining (56%), luxury cars (36%), wine and spirits (66%), and art and design (71%). Over the past 18 months, the "wellness & longevity" category has seen an 8% increase, with a forecasted growth of another 10% in the next 18 months. Art and design have also grown (+4% past, +8% projected), reflecting a growing cultural trend: well-being is the new luxury. Apparel and footwear are slowing down, and fashion brands are not particularly adept at seducing top-tier clients: more than half complain about annoying automated emails, and 89% have explicitly criticized the disappointing quality of products, even bespoke ones. This may explain why their massive budgets are rewarding luxury spas, five-star hotels, art investments, cars, private club memberships, and jewelry—but not clothing, bags, and alcohol.  
 

Is luxury ready to downscale?

The only advice given to brands, in light of their clients’ needs, is to focus more on nurturing relationships with the ultra-wealthy, making them feel as non-transactional as possible (in other words, making them feel special), while giving little attention to recovering the aspirational segment, pushing them into the background. But abandoning an entire commercial segment could lead to volume decline in categories like apparel, fragrances, and entry-price accessories, reduced store traffic, less digital buzz, and the subsequent erosion of a brand's mainstream cultural relevance. While investing in the top-tier allows for much higher margins, consistent and ongoing consumption, it also drives up costs: these clients seek authenticity and excellence, requiring not only new investments in “clienteling” systems to track every detail, but also a general rethinking of many production processes, which should put a stop to the massification of offerings and force brands to spend significantly more on creating even more perfect and precious products.

Are major publicly listed brands willing to reduce volumes and wait for margins to rise? According to a 2023 report by Pambianco and PWC, 78% of luxury fashion is produced in Italy, so what would happen if production, as is currently happening, were to decline? For months now, CNA Federmoda and CNMI have been sounding alarms and asking the government for investments in a sector whose crisis is well documented: in the first three months of 2025, requests for wage support surged by 66% compared to the same period in 2024, a year already fraught with difficulties. Strategically, then, luxury faces a crossroads: continue to serve the aspirational segment to gain volume and cultural relevance while accepting lower margins and potential brand dilution, or abandon this segment and focus on the top-tier to gain margin, authenticity, loyalty, and resilience, though at the cost of reduced scale, new and unforeseen investments in client care, tracking, and segmentation, as well as uncompromising production and the costly experiences that VICs demand. Only if brands successfully reposition at the high end will the trade-off pay off. How many will succeed?