In 2007, Louis Vuitton made a significant move by introducing the Neverfull bag, adorned with its iconic monogram. Originally designed as a capacious beach carry-all, the Neverfull swiftly rose to fame, becoming a coveted accessory. Its price, which was relatively affordable, around £600 ($760) at the time of purchase in 2010, opened the doors to a wider consumer base, a feat not easily achieved by classic luxury brands like Chanel.

During that era, a growing number of individuals, particularly in China and the US, were gaining access to designer labels that were once the domain of the wealthy elite. However, luxury brands have not had an easy ride, grappling with challenges such as steep price hikes and sales plateauing, which have necessitated a reconnection with consumers.

European luxury giants like Kering SA’s Gucci have been adept at this, offering products at various price points to appeal to a broader audience. Gucci’s strategy of selling items below £1,000 helped it tap into emerging markets like the Chinese middle class and young American consumers.

However, the landscape is evolving, with luxury brands striving to move upmarket. This shift comes as aspirational luxury consumers in the US face economic pressures while Chinese buyers remain cautious. Brands catering to the ultra-wealthy, such as Hermes International SCA and Brunello Cucinelli SpA, have seen robust sales growth, while those targeting the middle class, like Kering and Burberry Group Plc, have encountered challenges.

As luxury brands focus on the affluent segment, they risk neglecting lower-income consumers, leaving a gap in the market for premium fast-fashion players like Zara. To address this, luxury groups must find ways to make their products more accessible without compromising their exclusivity.

One approach is to expand offerings in categories like eyewear, beauty, and fragrance, which serve as entry points for luxury consumption. Additionally, brands can introduce smaller, more affordable versions of their popular items, tapping into the trend for mini bags and accessories.

Dior micro bag

While traditional secondary lines are less favored, limited-edition capsules and collaborations offer opportunities to attract new customers. Brands can also explore unique and affordable products that maintain their luxury appeal, such as Loewe’s raffia baskets or Prada’s novelty accessories.

Furthermore, embracing the resale market and offering pre-owned products can cater to budget-conscious consumers and foster relationships with potential luxury shoppers.

In summary, as luxury brands navigate the shifting sands of consumer preferences and economic challenges, the key to their survival lies in maintaining a delicate equilibrium between exclusivity and accessibility. By flexing their strategies to cater to a diverse range of consumers, luxury houses can ensure their growth and relevance in an ever-evolving market landscape.