Aspirational buyers could save luxury brands from losing more ground

Luxury brands hiked up their prices about 20% between 2021 and 2023, steering off middle-income shoppers facing financial pressure.

A sharp hike in the price of luxury goods in recent years has cost some brands a key group of customers. About 50 million customers were sidelined from the luxury goods market by 2024 as prices climbed roughly 20% since 2021, according to Aaron Cheris, a partner and head of global e-commerce and marketplaces at Bain & Co. The deficit has some luxury brands rethinking ways to lure back “aspirational” luxury consumers, who tend to buy at least one luxury item per year and spend between $3,000 and $10,000 annually on fashion, according to McKinsey & Co. The exclusion of so many consumers wasn’t lost on British luxury group Burberry, which made adjustments ahead of the recent holiday shopping season. “These past few years, we have been very focused at the top of the pyramid, especially in leather goods. Going forward, we will restore a ‘good, better, best price’ architecture in a luxury context across categories,” Burberry CEO Joshua Schulman said at a company strategy presentation in November 2024. Schulman added that the shift to more accessible products was “restoring a price architecture” from previous revenue levels. And for the first time in two years, Burberry saw new customer growth globally during December. The company’s third-quarter store sales also grew 4% in the Americas — the United States, Brazil, Canada, Mexico and Panama — which helped narrow global losses.