Luxury’s New Reality

**Sheena Butler-Young** (0:08)
Hello, and welcome to The Debris from The Business of Fashion, where each week we delve into our most popular BoF professional stories with the correspondents who created them. I'm Senior Correspondent Sheena Butler-Young.
We hear a lot about the luxury industry slowdown. Consumers are pulling back, aspirational shoppers have disappeared, China is changing, the US is changing. But what's actually motivating people to buy luxury right now? That's where our latest State of Fashion report, produced in partnership with McKinsey, set out to answer. We spoke with more than 2,000 luxury shoppers across the US and China, and some of the industry's top executives, to understand all of the shifts impacting luxury.
Emotional connection is outpacing heritage, AI is influencing shopping decisions, and while consumers in China and the US have a lot in common, there are also some fascinating differences. Luxury editors Mimosa Spencer and Robert Williams have spent this year elbow deep in the research behind that report, and are joining me today to help make sense of the market outlook. Mimosa, Robert, welcome to the debrief.

**Robert Williams** (1:12)
Hi, Sheena. Thanks for having us.

**Mimosa Spencer** (1:14)
Thanks for having me, Sheena. It's great to be here.

**Sheena Butler-Young** (1:17)
So Mimosa, let's start with the report itself. It's no secret that luxury has been struggling to grow for at least the past three years, and brands have been trying to do everything in their power to recapture attention and desirability. One of the biggest findings of this report is that emotional connection has overtaken things like craftsmanship, heritage, and even logo recognition as the biggest driver of luxury purchases.
That's a pretty profound shift. Can you help us understand how we got here as an industry and what's driving the change?

**Mimosa Spencer** (1:45)
I would say that luxury fatigue has been a real problem. Shoppers are tired of price hikes, they're tired of things costing more when the product hasn't actually changed. There's also been a higher cost of living. People have been focusing their attention to travel and experiences. At the same time, a lot of people have pretty stuffed closets, so it takes more to convince them to actually splash out and buy something more.
And so, everyone's kind of hit the pause button, and they're thinking more about how they want to spend their time and their money, and it's not always on the latest handbag.

**Sheena Butler-Young** (2:21)
It's interesting because I think another interpretation of people seeking emotional connection before they hit the purchase button is that maybe they feel like the craftsmanship or the quality is just table stakes. Like, I need something more to convince me to buy this Louis Vuitton piece, this Chanel handbag, this pair of luxury shoes.
Do you feel like there's some truth to the fact that people actually just expect it to be good and then what?

**Mimosa Spencer** (2:48)
Yeah, that's exactly it. You have such a huge array of offers from different brands and everybody's showcasing the craftsmanship, really emphasizing it and to say how special this product is, how it's made so specially.
And in fact, that's kind of what people are expecting now from luxury brands. They expect things to be high quality and they also expect them to be made in the right conditions. So, you know, this is no longer something that makes the difference between a purchase or not.

**Sheena Butler-Young** (3:16)
And Robert, I'm going to come to you soon on Chanel and that one-on-one conversation you had with Bruno. But I also am curious on this point of craftsmanship being sort of table stakes and I think luxury brands also on the storytelling point, have spent so long focusing on mythmaking, if you will. It seems that they're also losing customers over something that is much simpler, which is like these really uninspiring store experiences, and not the least of which is affected by these long cues outside the store that used to maybe make you feel like, oh, this is so coveted, I'm going to stand in line, but now it's just annoying. Have brands overcomplicated some of this, the storytelling where they're investing and kind of are missing out on the fundamentals?

**Mimosa Spencer** (3:54)
Yes, I would say one of the things that we learned from surveys that were conducted is that people, when they're interested in buying something, they want to be able to buy it right away. They don't want to have to bag, they don't have to wait in line. They want a kind of a frictionless experience. And so this is quite interesting because it means that brands, well, they can find ways to answer this. They can make it easier for people to make purchases. I think the lesson to take away is that once you've piqued somebody's interest, you've gotten your audience, you want to be able to serve them right away. Don't make them go through hoops. Don't make them wait in line. None of that is appealing anymore.