Online sales in the luxury market are expected to reach $91 billion by 2025, leaving plenty of opportunity for brands to sell superior goods at premium prices. But consumer preferences are constantly evolving—the tactics used to sell inventory last year likely won’t stand the test of time.
This guide shares key trends in the luxury sector, so you can drive foot traffic to your physical stores and increase online sales simultaneously.
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The future of luxury retail marketing
Craftsmanship, authenticity, and a commitment to outstanding customer experience emerged as the key pillars of luxury brand resilience, according to a 2024 survey of luxury industry executives. But it’s the evolving customer base of luxury brands that is driving change.
Luxury brands are seeing a dramatic shift in their customer base, with consumers under 40 now representing 40% of the market, overtaking the historically dominant older demographic.
According to Bain, this is tied to a surge in wealth creation over the last few years and the fact that these generations have grown up with social media. In other words, this growing demographic is spending more and navigating digital spaces as naturally as physical ones.
Luxury is also an industry greatly affected by economic growth and downturns. The average annual inflation rate has been at its highest in recent years. As a result, luxury retailers that want to continue to drive sales must build personal connections in order to form lasting relationships with customers and position their products in the best light to entice spending disposable income on premium goods.
Luxury retail trends
- Cross-border transactions
- Storytelling through founder-generated content
- Shoppable educational content
- Sustainability at the core
- Recommerce and buyback programs
- Immersive augmented reality experiences
- Personalized experiences using connected apps
- Exclusive product drops for VIPs
1. Cross-border transactions
Retail no longer sits in isolation in a business’s sales strategy. Ecommerce lets luxury shoppers buy products from anywhere in the world. In fact, eMarketer estimates that a third of US digital buyers will engage in cross-border retail ecommerce this year.
NakedCashmere, for example, consulted Shopify analytics and discovered that 10% of traffic to its website was coming from outside of the US. This segment had a poor conversion rate—likely because the brand had yet to invest in a localized shopping experience for global shoppers.
NakedCashmere enlisted the help of Shopify’s Managed Markets feature to:
- Enable international buyers to buy through a localized online storefront
- Display local currency options at checkout
- Reduce international shipping costs by more than 50% per shipment
“People like buying internationally because they get something that no one else has and that has a story to it,” says its VP of ecommerce, Celia Mulderrig. “If Managed Markets can help us reach those customers and allow them to discover and try on a NakedCashmere sweater, that’s the goal.”
In the 4.5 months since launching Managed Markets, NakedCashmere has experienced a 149% increase in global sales and 7% growth in conversion.
2. Storytelling through founder-generated content
Founder-generated content is a relatively new term that puts store owners at the forefront of your marketing content. It’s a great way to cater to the 70% of consumers who feel more connected to a brand when its CEO is active on social media.
Aimee Smale is one entrepreneur doing this exceptionally well. As the founder of luxury women’s clothing line Odd Muse, Aimee has built an impressive following on her personal Instagram and TikTok accounts. She’s also been a guest on podcasts that her Gen Z audience follows, telling the story of how she started the brand and the mistakes she’s made along the way.
This transparency and open nature represent a shift in the luxury retail landscape. In the past, leading luxury brands maintained an air of exclusivity, catering to a select clientele who could afford their products. Aspirational consumers could only dream of being part of this world.
Now, social media has made luxury retail more accessible and relatable. The people behind these brands are sharing their experiences and insights, connecting with a wider audience. This shift in communication has opened up new opportunities for luxury brands to engage with customers and build stronger relationships.
3. Shoppable educational content
Global luxury brands like Chanel, Gucci, and Net-A-Porter are leaning into short and snappy video content to meet the new wave of high-end consumers buying luxury goods through TikTok.
Integrations with ecommerce platforms make it easier to turn these passive viewers into paying customers. They can view a product in a video, click through to the brand’s TikTok Shop, and buy—without leaving the app.
Luxury apparel retailer Nour Hammour takes this shoppable content a step further with editorial lookbooks on its direct-to-consumer website. Communications and ecommerce director Zeina El Zein says: “We wanted our clients to immerse themselves into our world through beautiful storytelling. Each page has a subtle surprise that adds a spark to your shopping journey.”
“One of the standouts is the new editorial lookbook page that allows clients to scroll through campaign images as though they are reading a fashion editorial story and shop on the spot through the “add to bag” button—all without leaving the lookbook context,” Zeina adds.
Since overhauling the customer experience with these interactive elements on Shopify, Nour Hammour has seen a 63% year-over-year increase in conversion rate and a 128% increase in sales.
4. Sustainability at the core
Sustainability is also driving consumer behavior. One report found that almost half of the USA's wealthiest consumers would consider a brand's social responsibility important when making a purchase decision. Some 22% have already boycotted a brand or product for its poor ethical or sustainability values.
But it’s one thing to talk about your retail sustainability efforts, and another to actually follow through on your promises. Consumers have trained themselves to spot greenwashing—false or exaggerated claims that make you appear more climate-conscious than you truly are.
Ways to develop a more sustainable luxury retail business include:
- Going paperless by eliminating paper receipts in favor of email copies
- Using sustainable materials
- Removing waste and upcycling returned consumer goods
- Exploring the rental business model
- Using third-party logistics (3PL) companies to reduce your carbon footprint
Share your commitment to slowing down climate change by talking about your sustainability initiatives. Even if you haven’t perfected it just yet, showing you’re open and willing to change can go a long way.
As Federica Levato, partner at Bain, summarizes in an interview published by Forbes: “Brands must purposefully rethink their value propositions by maintaining and expanding their audience reach as well as continuing to deliver exceptional experiences, while nurturing their value propositions across all price points, to build lasting consumer loyalty that goes beyond mere desirability.”
5. Recommerce and buyback programs
Luxury brands are putting their money where their mouth is by backing up sustainability claims with recommerce programs. They’re inviting customers to return unwanted luxury goods and partake in buyback programs. It allows many luxury brands to prevent items from ending up in landfills and generate more revenue from old inventory.
Consumers also use resale schemes to buy luxury items at a discounted price. One in 10 global consumers actively buy second-hand luxury goods. It’s especially prominent in niches like luxury watches. Per BCG research, resale watches account for 30% of the luxury market’s total value—even outpacing new watch sales.
This openness to thrift personal luxury goods has paved the way for third-party marketplaces like Luxe Collective, Vestiaire Collective, and The RealReal. However, luxury brands like Balenciaga and Rolex have their own resale programs that invite customers to return and resell items, which lets them reach new markets of people who want to buy premium goods without the expensive price tag attached when new.
6. Immersive augmented reality experiences
It’s estimated that 30% of all personal luxury sales will take place online by 2025, per Luxe Digital. But simply having an ecommerce website isn’t enough to capitalize on this shift to ecommerce—a consumer’s online experience influences at least 40% of all luxury purchases.
Modern consumers expect fast and seamless shopping experiences. They’re not willing to hang around and wait for a website to load, nor do they want the same two-dimensional social media content most Gen Z and Millennials have grown up with.
“The ultimate luxury in fashion and beauty transcends the physical,” author Carlota Rodben said in a recent interview. “It lies in creating value that resonates with our emotional and psychological landscapes. Luxury is a multi-sensory experience, a deep emotion that captivates and transcends the ordinary, inviting us into a dreamlike state of beauty.”
Luxury fashion retailer Rebecca Minkoff applies the same concept to its website using 3D modeling. Online shoppers can see a 360-view of its bag to view the texture, structure, and shape—elements that are hard to convey through static imagery or product descriptions.
“3D media makes for a much more interactive shopping experience,” said its co-founder and CEO Uri Minkoff. “Customers can examine our products from every angle, including the option to view products in augmented reality, which helps them get a better sense of quality, size, and other details that matter.”
The luxury retail brand found that shoppers are 44% more likely to add an item to their cart after interacting with it in 3D. They were also 27% more likely to place an order.
7. Personalized experiences using connected apps
The lure of unique experiences is enough to draw potential customers in. It’s why luxury brands are known for shoppers to require a contact or personal shopper in order to buy premium goods.
However, it can be easy to lose track of who your customers are when offering these personalized retail experiences—adding friction for sales associates who feel pressured to remember each individual customer’s preferences.
Mobile point-of-sale (POS) systems give associates on the shop floor access to customer data at their fingertips. View their purchase history, shopping preferences, and eligible loyalty rewards across every touchpoint, and use it to make personalized recommendations that increase basket size.
📌 Pro tip: Turn your mobile phone into a POS system with Tap to Pay. Luxury sales associates can retrieve customer data, check inventory levels, and process payments anywhere in the store—all from a smartphone.
8. Exclusive product drops for VIPs
Luxury retail thrives on exclusivity. Products have a higher perceived value—and therefore justify prestige pricing—when they’re limited.
The product drop model caters to exclusivity by selling limited edition products for a short period of time, or only offering a limited quantity. Luxury streetwear brands like Live Fast Die Young have perfected the art of the product drop and built their entire business models around time-sensitive drops.
Though you don’t have to make drops the foundation of your luxury retail business, it’s a great way to reward repeat customers and build hype around your products. Segment your highest-value customers—like those with the highest lifetime spend or people who’ve made over five purchases—and invite them to buy exclusive products before the general public can.
Shopify lets you do this from your POS system. Keep track of where people buy—across multiple luxury retail stores and online sales channels—and apply automatic segmentation rules to identify VIP customers you could offer product drops to.
Capitalize on these luxury trends for your retail store
The luxury industry is no longer reserved for the highest earners. Gen Z and Millennials are driving luxury sales—many of whom are using their disposable income to buy second hand luxury goods or join branded communities that offer a sense of belonging and status.
Luxury retailers like Rebecca Minkoff, Bremont, and Khatie already rely on Shopify to power their business. Join them today and get a unified commerce platform that lets you sell to anyone, anywhere, from a single system.
Luxury retail FAQ
What does luxury retail mean to me?
Luxury retail is a broad term that describes the sale of premium goods. These items are usually expensive, made with premium materials, and exclusive.
What does a luxury retail buyer do?
It’s a luxury retail buyer’s job to source inventory. They review market and customer trends, build category plans, shortlist vendors, maintain quality control, and analyze product performance.
What is the luxury retail experience?
A luxury retail experience is highly personalized and exclusive. The focus is on building relationships with customers using data already collected on them, as opposed to selling a product’s features.
