Đăng Nhân Hoàng’s Post

I noticed that the luxury slowdown has been analyzed from the geo-political, macro-economic and market growth angles. But the problem is cultural. Luxury lost its soft power. Luxury’s soft power kept its value and price together. Price made something more desirable (the Veblen effect) and no one questioned the price thanks to perception of value. This value was material, but mostly cultural and social: when an item sold too well or too quickly, a luxury brand would discontinue it. Cynic is a man “who knows the price of everything, and the value of nothing,” noted Oscar Wilde. He might have as well been describing today’s luxury market. Seemingly overnight, luxury products’ price unbundled from their perception of value - their desirability - and turned them into commodities. Luxury exists in the social and cultural exchange system, not in a market segment. It is glib to think that a different market growth strategy will save luxury. Luxury doesn't need a new competitive strategy, it needs a new cultural strategy. Where, exactly, is the value? Luxury is a game of identity. Identity is what differentiates luxury strategy from strategy of premium and mass brands. Identity commands value perception, and prevents cost-per-wear and price-value calculus. It also makes a brand incomparable: premium and mass brands communicate how they are better/cheaper/faster than competition. Luxury brands don’t. (Or, at least, those luxury brands that retained their incomparability do not: Hermès sales are up 11.3 percent in the Q3 of 2024. Bottega Veneta and Brunello Cucinelli have also grown, as did Prada.) The list is short. Luxury brands literally lost the plot. Instead of doubling-down on identity, most luxury brands doubled-down on creating more products. Without identity, a product is commodity. Without identity, a brand is a glorified production facility. A lot of luxury brands organized themselves as commercial entities fiercely focused on their own efficiency, cost-cutting and bottom line. This growth strategy made a lot of them forget who they are, what they stand for, and the role they play in culture. Read the full analysis on The Sociology of Business: https://lnkd.in/e34H9c7m

🎯 A lack of solid brand IDENTITY is key to the luxury market slowdown. Money follows culture, not the other way around. Humans naturally define themselves based on what they buy, where they go, who they see etc. It's the culmination and pattern in these behaviors that makes up who one believes that they are. In fact, "identity" translates from 2 Latin words to literally mean one’s "repeated beingness,” and it’s precisely this persistent consistency that has been forgotten by brands as they attempt to relate to their audience. Ultimately, luxury brands lost their way when they started chasing temporary trends, instead of just focusing on telling their own unique brand story. As a result, their UVP is less concrete and defined, customers can’t connect, and the end product looks the same whether it’s Dior or Zara (even luxury craftsmanship and ethics is up for debate these days). So then, what is the incentive in purchasing luxury if it does nothing for the wearer in terms of cultural cache? This is the real issue brands need to address, instead of “market conditions.” One only needs to look at the positive performance results coming from Hermes and Prada/Miu Miu, amid the greater luxury slowdown, to realize that identity is the real issue at play here. And to add to this, @shrimptoncouture made another key point on Instagram that the luxury slowdown is actually because the “luxury experience” we’ve come to expect has all but disappeared. This too, I believe, is responsible. Read more here: https://lnkd.in/edH8WYk8 #Luxury #Fashion

After over 14 years in the luxury industry, founding THE AGENCY DE LA MODE, and lecturing at the FRA, I’m thrilled to share insights from my journey and research into what truly drives luxury in today’s world. In this book, I explore how luxury is evolving—from status symbols and opulence to a deeper focus on experiences, emotional connection, and ethical responsibility. It’s a comprehensive look at the psychology of luxury buyers, the role of digital transformation, and the importance of cultural and social shifts that are reshaping the industry. Throughout these pages, I dive into the intricate motivations that drive people to engage with luxury, examining the impact of price as both a barrier and a marker of prestige, the transition from ownership to experiential value, and the rising demand for brands that align with personal values around sustainability and inclusivity. I also dissect how technology—through e-commerce, virtual reality, and data-driven personalization—is redefining the way luxury brands interact with their consumers, enhancing accessibility while preserving exclusivity. By analyzing real-world case studies from iconic brands like Louis Vuitton, Gucci, and Rolex, I provide an inside look into the strategies and innovations shaping the luxury market. These brands have been pioneers in adapting to the changing landscape, balancing tradition with modern expectations to remain relevant and desirable. This book is intended not only for luxury industry professionals but also for anyone intrigued by the allure of luxury and the evolving tastes of today’s consumers. Whether you’re a brand strategist, a market researcher, or simply a curious observer, I hope these insights will broaden your understanding of what luxury means in the modern age—and where it’s headed. Join me on a journey into the psychology, culture, and economics of luxury in the 21st century. Together, let’s explore how luxury is being redefined for a new generation—one that values authenticity, experiences, and ethical responsibility just as much as, if not more than, exclusivity and status. Thank you for being part of this exciting exploration. I can’t wait to hear your thoughts and insights as you dive into The Psychology of Buying Decisions in the Luxury Industry. Let’s redefine luxury, together. ✨

"Just because you're expensive doesn’t make you a luxury brand." I brutally offended a prospective client yesterday with this home truth. Why is it that many expensive products still fail to resonate with luxury consumers? It comes down to one critical truth: price is only one element of a luxury experience. Luxury isn’t just about price, it’s about desire, identity, and exclusivity. True luxury brands don’t rely on eye watering price tags alone to signal their value. Instead, they create environments of unforgettable experiences that elevate the client's sense of self and belonging. Think about it. A £10k handbag is just a bag without the allure of exclusivity, the storytelling of craftsmanship, and the emotional connection it builds with its owner. This is why real luxury brands excel. They don’t sell products; they sell status, culture, and a lifestyle. So, the question is: Is your brand merely expensive, or does it provide a luxury experience? If you’re ready to train your teams how to influence and sell to high-net-worth clients and luxury consumers and create unforgettable experiences, click the "Visit My Website" link in my bio.

Altagamma Observatory 2024 & The Luxury Shame Andrea Guerra – Prada Group CEO: “It was a huge mistake to raise prices so much.” The Altagamma Observatory 2024, one of the most anticipated events for insights into the global luxury market, took place in Milan on November 13. Among the many revelations, a candid remark from Andrea Guerra, CEO of Prada Group, stood out: “It was a huge mistake to raise prices so much.” Indeed, this striking admission highlights a pivotal moment for the industry, sparking discussions about the balance between exclusivity and accessibility in luxury fashion. Altagamma Observatory 2024 offered an in-depth view of the luxury industry’s evolving challenges and opportunities. Specifically, experts and industry leaders shared insights into the current market climate, highlighting missteps and urging a reevaluation of strategies. After Altagamma President Matteo Lunelli’s opening remarks, Stefania Lazzaroni, General Director of Altagamma, presented insights into market trends and future forecasts through the Altagamma Consensus 2025, which leading financial analysts developed. Then, Claudia D’Arpizio and Federica Levato, Senior Partners at Bain & Company, unveiled the Altagamma-Bain Worldwide Luxury Market Monitor. Consequently, Industry leaders, including Laura Burdese (Bvlgari), Patrick Chalhoub (Chalhoub Group), Alfonso Dolce (Dolce & Gabbana), Andrea Guerra (Prada Group), Pier Francesco Nervini (Global Blue), and Marco Piscitelli (Molteni Group), discussed the research findings. President of the Altagamma Foundation, Matteo Lunelli emphasized the significance of the Altagamma research as an international benchmark. Then, he painted a picture of an industry at a crossroads, marked by global uncertainties such as geopolitical tensions, wars, and inflation that have caused consumers, especially the middle class, to lose purchasing power. Also, the slowdown in China and a change in the USA with the Trump election will cause a potential 10-20% increase in duties. But both markets are crucial for Italian products. So, 2025 will be a year of transition, and recovery expected in 2030. Lunelli’s key factors: Know-how, creativity, technological innovation, sustainability. In conclusion, he advocates for collective action through partnerships, and collaborations. Read our full report on the blog: https://lnkd.in/dK5tyC69

How Luxury Brands Have Killed Luxury Let’s talk about hard truth: luxury as we’ve known is dying. The data shows that 50 million consumers have abandoned brands like Dior and Burberry. These names that once defined status, yet now they struggle to stay relevant. Why? Because they’ve lost touch with what luxury truly means. Luxury used to represent something rare and meaningful—a product of artistry and exclusivity. But in an effort to chase mass-market appeal, many big brands have stripped away these elements. Social media is not helping and has only accelerated this by overexposing luxury, making it accessible in a way that diminishes its mystique. And younger generations are simply not buying what these brands are trying to sell. Today’s consumers are looking for something deeper. They crave connection, community, and values. They want brands that reflect their priorities, whether that’s sustainability or a shared sense of identity. Importantly, consumers also want quality—but they now understand that quality doesn’t have to go hand in hand with a label. The younger generations are willing to explore and support smaller, lesser-known brands as long as those brands deliver on their promise of authenticity and craftsmanship. Gen z are not embarrassed to purchase dupes. It actually shows that they are in the know. Interestingly, while big luxury brands are struggling, smaller ones are thriving. Brands like CMN Sweden and Story MFG are growing because they understand their consumers. These brands emphasize luxury not as an aesthetic but as a philosophy—grounded in quality, environmental focus, and authentic community-building. Even within established players, some brands are finding innovative ways to adapt. Let’s take Miu Miu, for example. They’ve redefined exclusivity with their salon series and book clubs in Milan and NYC. Book readings?! Think about what this says: the act of sitting down to read a book signals time, sophistication, and a certain leisurely lifestyle—something inherently luxurious. Then there’s Balenciaga, which has taken a different approach, creating what some are calling “scarcity of meaning.” Their communication strategies involve inside jokes and references that only an exclusive subset of people understand. Whether you love it or hate it, it’s a return to the idea that luxury is about belonging to a select group. So, what does this mean for luxury market? The lesson is clear: luxury brands can’t be everything to everyone. Be authentic lean into your nitch. The future of luxury lies in returning to its roots: Exclusivity-Craftmenship-Connection-Quality while being environmentally consciousness and sustainable. Luxury isn’t about mass appeal; it’s about meaningful, intentional moments. Brands that understand this are thriving, while those that don’t will continue to fade.

One of the most common misconceptions about luxury is with regard to its cost. In a press interaction, American designer and brand owner Calvin Klein said, “The price tag doesn’t have to be steep for something to qualify as a luxury product”, debunking the common myth that luxury, by its very definition, has to be expensive. (article attached for full read) In today’s times, millennials hustle through their lives wanting to be able to experience an elevated lifestyle. There is a growing understanding that world class quality, design and craftsmanship comes at a price but it need not be sickeningly expensive. Value for money is no longer defined by cheap or discounted products but “price worthiness”. Brands and marketers are therefore striving to offer consumers the best of functionality, quality and design for a lot less making luxury more achievable. Other segments including SUV cars, premium two-wheeler motor bikes, beauty and skin care products, Health food and such others are witnessing better quality products being offered at a premium but achievable price. In this dynamic market, the challenge for brands will be adjusting their marketing strategies to align with evolving patterns of consumer engagement. We will see more brands enter the affordable luxury space either through brand extensions by incumbent luxury brands, international brand entrants or new home grown D2C brands creating waves in the affordable luxury space. The economic indicators support the trade up and premiumisation that is being witnessed in several categories. There is a need gap in this growing segment of aspiring customers who want to experience the best things in life, and want to do so Now! https://lnkd.in/gTEvhE97

“The global personal luxury market is facing an inflection point. After growing a nearly unimaginable 20% in 2022, it settled down to a more normal 4% uptick in 2023, from $380 billion (€349 billion) to $394 (€362 billion) last year at current exchange rates, according to Bain. Hedging their bets, Bain expects a “relatively soft” personal luxury goods performance in 2024 in the low-to-mid-single-digit range.” “But underneath those more or less reassuring topline results lie troubling trends that lean toward the lower end of that forecast. Throughout 2022, the pace of growth slowed, from 28% in the first quarter to 12% in the fourth quarter. Then, it continued to slow as the year progressed in 2023.” “Even more worrisome is the weak performance in the Americas, the traditional global luxury leader. Revenues declined 8% to $110 billion in 2023, and the global quarter-by-quarter deceleration was even more pronounced here.” “Early signs from Consumer Edge, which tracks transaction data across the U.S., U.K. and Europe, shows that the U.S. slowdown continues in the first quarter 2024 with sales off 8% from same period previous year. Consumer Edge’s data was right in line with Bain’s findings last year as it reported U.S. luxury consumer spending was down over 7% in 2023.” “Stephen Hahn, RepTrak global executive vice president, explains that after reaching an historic high in 2021, brands experienced a ‘reputation recession’ because consumers felt many companies didn’t live up to their promises of good corporate citizenship made during the pandemic crisis.” “But while the reputations of brands overall have started to recover, that is not the case for luxury brands. “One could argue that luxury has lost some of its luster. It means that other non-luxury brands have gained in reputation disproportionally, while the luxury brands have gone down,” he continued.” “The sharp price increases implemented by many luxury brands post-recession gives the impression that they’ve gotten greedy, which is certainly a bad look when many consumers face economic challenges.” “Given the global footprint of luxury brands and the global scope of RepTrak’s consumer sample, Hahn sees growing bifurcation between luxury brand reputations in traditional Western countries and those in Asia.” ““In China specifically we are seeing some malaise against luxury and equally a pushback on westernized culture,” he said, noting that Chinese consumers are experiencing economic challenges making luxury brands less accessible.” - Pamela Danziger

What Does Luxury Really Mean Without the Lens of Society? In a world where brand names are often synonymous with social value, it’s easy to forget why we buy things in the first place. Luxury brands have created a powerful narrative: if we own their products, we’re somehow more worthy, more accomplished, more admirable. But if we remove the societal gaze, what does luxury mean to the person who owns it? Without society’s validation, what does a diamond-studded handbag really bring? what if we lived in a world where we valued people for using resources efficiently, meeting their needs rather than exceeding them? Imagine a parallel universe where society didn’t reward conspicuous consumption but instead valued intention, purpose, and mindful use of resources. Many luxury items are designed, marketed, and sold with prestige in mind. We’re told these items are rare, exclusive, and worthy of awe. They imply access to elite circles or a ticket to being “seen” by society. Brands have successfully engineered the idea that luxury equates to status, and by buying into luxury, we’re actually buying into a perception carefully crafted by marketing campaigns. If we look closely, many luxury items offer little added value beyond status. A diamond-studded handbag serves the same functional purpose as a modest one but costs magnitudes more because it represents a certain social tier. This is where society’s perception comes into play, turning functional items into totems of status. Yet, what if society’s values shifted? What if we were tuned to see excess or misuse of resources as a kind of social transgression? In a parallel universe, those who live beyond their means or prioritize status over purpose might not be admired but rather questioned. The diamond-studded bag would draw puzzled looks, as people asked, “Why spend so much when a simpler version serves the same purpose?” Imagine a society where using more resources than necessary for any purpose—even for our personal satisfaction—was viewed as a cardinal sin. In this world, people would respect those who owned items that served their purpose well, without excess or flash. The most “admired” individuals would be those who used resources wisely and mindfully, choosing quality where it added value and opting for simplicity where it sufficed. Luxury, in this alternate universe, wouldn’t be about exclusivity or price. Instead, it would be defined by how well it served the owner’s needs, perhaps along with how sustainably it was produced. This perspective makes luxury about how something enhances life in a purposeful, meaningful way—without the need for validation or status. Although we don’t live in this parallel universe, there’s no reason we can’t start rethinking our relationship with luxury in a similar way. #minimalism #lifestyle

As the name suggests, quiet luxury brands refer to companies that do not make deliberate attempts to market their products and/or brand but are nevertheless regarded as luxury because of their craftsmanship, authenticity, limited editions, heritage, and exclusivity to a small number of consumers and said consumer’s loyalty. That is what brings value to the brand. Natural fibers, muted color schemes, elegant, low-key shapes, and well-fitting clothing are the main characteristics of quiet luxury. With the expansion and prosperity of the luxury industry, businesses have emerged from the shadows of luxury and demonstrated their commitment to raising self-awareness among all people, not just their clientele. This crucial step was required to increase brand awareness and gain access to a larger consumer base. There has always been an unwritten boundary between those who can and cannot afford luxury goods because of the nature of the luxury business and its patrons. There is currently a sizable consumer base that is in line with luxury brands thanks to the recent increase in affluence, the advent of credit cards, EMI payments, and other accessible features. Due to this, brands are feeling overexposed and want to be in control of how many things they sell and to whom. Chanel, for instance, maintains strict control over their brand by only allowing their beauty division to sell online, leaving their main line of clothing and accessories available only in-store. Chanel, Gucci, Prada, and Louis Vuitton are a few overexposed brands as compared to Zegna, Brioni, Canali and Piguet. These are some of the brands that have been able to stay under the radar and align themselves with the kind of people they would like to work with in this age of overexposure for both the brand and its customers. This does not imply that the brand is any less opulent or relevant. This merely indicates that the business is staying true to who they are and the type of customer base they wish to attract, which is mostly those from wealthy generations known as "old money" today. Their items aren't mass-produced, they don't have eye-catching logos, and they value customer privacy greatly. A few labels that personify understated elegance are Brunello Cucinelli, The Row, Loro Piana, and Max Mara. So, isn't quiet luxury associated with sophistication and elegance?  Now, the issue is raised: Can a brand in this day and age avoid the spotlight if they so choose? The most crucial question is: Can a brand continue to prosper by being a discreet luxury brand or not?  #Luxeveda #LuxuryBrand #Fashion #QuietFashion #QuietLuxury