The luxury brand industry is evolving. As its products become accessible to a broader audience, brands face the challenge of maintaining exclusivity and uniqueness. To address this, many are now focusing on ‘experiences,’ strengthening customer relationships by offering something unique without compromising their status or reputation.
The luxury industry is undergoing a phase of transformation. While in the past few used to buy luxury items, many more people are now spending their money on high-end brands.
Evidence of this can be seen, for example, with the French fashion house Hermès. The market value of Hermès sat around $250 billion in early 2025. That's more than double that of the $107 billion Nike brand.
Of course, Hermès products are much more expensive, but Nike is a very popular brand, and most people have a Nike T-shirt, pair of sneakers or gym bag in their wardrobe.
Obviously, luxury brands are reaching more and more people today. One reason, among other things, is that consumers of luxury goods are becoming younger and younger.
New focus areas, such as customer personalization through tailored luxury experiences, are shaping the future of luxury brand strategies. Using customer data to create personalized offerings, brands are further enhancing their relevance to maintain a competitive edge in the market.
Luxury Shopper Demographics: Broader and Younger
According to estimates, from 2030 consumers from Generation Z (born after 1995) and Generation Alpha (born after 2010) will be responsible for one third of the spending across the luxury market.
Luxury goods and luxury experiential goods are crisis-resistant. During the coronavirus epidemic, consumers were still diligently purchasing luxury brands
The Lipstick Effect: Why Luxury Brands Are Gaining More Customers
According to this theory, during difficult economic cycles consumers are more likely to consume ‘cheaper’ luxury goods, such as cosmetics, watches, and fashion. An article in The Economist described the phenomenon as:
"When mortgages and pensions become unaffordable, people buy luxury goods instead."
Expenditure, especially on luxury fashion items, will increase sharply in the coming years
Preserving Exclusivity and Rarity in Luxury
The trend in Switzerland is that luxury spending will continue to increase. However, brands face a significant challenge, because how can you continue to grow and remain luxurious at the same time?
Exclusivity and rarity are the key features of a luxury good. If everyone owns a certain luxury good, by definition this is no longer a luxury good.
Large luxury brands have recognized this for a while now and are thus increasingly relying on luxury brand experiences utilizing hospitality, with the aim of strengthening the customer experience.
Such experiences, including hotels, restaurants, and SPAs, allow brands to have a stronger interaction with their customers without compromising the exclusivity of their brand. On the contrary, this enhances the brand even further and a renewed relationship is built with their customers.
The fusion of luxury fashion and high-end hospitality creates the ultimate combination for exclusive experiences. While these indulgent treats may be expensive, they remain an attainable aspiration for many, acting as an entry point for those who enjoy the aesthetics of a particular brand.
How Technology is Enabling Personalization to Play an Intrinsic Role in the Luxury Brand Experience
Just as 5-star luxury hotels greet each guest by their name and leave personal touches in guests' rooms on arrival, all luxury brand experiences have become synonymous with personalized additions.
Personalization in marketing fosters a deeper connection with consumers by addressing their psychological needs for recognition, relevance, and relatability. By delivering tailored experiences, brands can boost engagement, strengthen loyalty, and inspire advocacy.
Customer personalization is transforming how luxury brands connect with their audience. By tailoring experiences and offerings to individual preferences, brands are not only enhancing their relevance but also driving repeat engagement and loyalty over time, bringing up the crucial lifetime value metric.
Some hospitality businesses even make a loss on certain services, but they know their offering is so exquisite it will delight their esteemed customers, therefore turning a profit from subsequent interactions, thus making it worth the initial investment.
The findings of a 2024 Forbes survey revealed that 81% of customers prefer brands that deliver personalized experiences, while 70% value interactions where employees recognize them and understand their history with the company—whether that’s previous purchases, support interactions, or buying habits.
By leveraging customer data, luxury brands can create bespoke experiences, from personalized product recommendations to exclusive, tailored services. Gucci, for instance, has implemented digital tools that enable customers to design their own sneakers, while Burberry uses AI to deliver personalized shopping recommendations online.
Luxury jeweler, Cartier, developed a hyper-realistic AR technology allowing customers to try on their expensive rings before making a purchase.
As these trends grow, personalization is set to play an even bigger role in shaping the future of luxury brand strategies.
Customer Experience Management Research at EHL
At EHL, the 2020 Institute for Customer Experience Management was founded in collaboration with Audemars Piguet, with the aim of implementing these luxury hospitality concepts. The AP House is located on Bahnhofstrasse in Zurich, where shopping for a luxury watch becomes an all-round experience.
The prime example of luxury meets hospitality is AP House by Audemars Piguet on Zurich’s most popular shopping street
Indeed, today, in order to stay relevant, luxury brands must be able to offer luxury experiences.
The luxury industry is also becoming an increasingly important employer for EHL alumni. For example, according to a survey conducted in May 2023, the luxury industry is the second most important sector for our students after the hotel industry. Indeed, 37 percent of respondents said they would like to work in the luxury industry.
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