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The Evolving Luxury Landscape

An Executive Voices Blog by Fflur Roberts, Global Insight Manager: Luxury Goods at Euromonitor International

The luxury industry is charting a path to recovery in 2025, with modest growth projected following a downturn in 2024. However, leading luxury brands continue to navigate a complex landscape shaped by sluggish global expansion, shifting consumer behaviours, rising capital costs, geopolitical instability, climate change, and the effects of deglobalisation.

Strategic investments in Generative AI (GenAI) offer a powerful lever to address operational inefficiencies and strengthen core capabilities across the luxury value chain. As the industry contends with persistent macroeconomic headwinds and pressure on discretionary spending, GenAI can help brands adapt with greater agility and precision.

At a time when major markets like the U.S. and China have seen slow growth, the emerging markets are becoming key growth frontiers. GenAI can enhance expansion efforts by enabling hyper-localised, relevant, and personalised consumer engagement that caters to the aspirations and rising affluence of these populations.

Sustainability remains a critical imperative. As luxury brands face increasing regulatory and consumer expectations around ESG, technology can play a pivotal role in driving transformation. GenAI-powered inventory and manufacturing optimisation can help reduce overproduction and waste, aligning supply with demand and minimising environmental impact. Moreover, by breaking down data silos, GenAI fosters greater collaboration across the supply chain.

Accelerating the shift to circular business models will require bold innovation. From regenerative agriculture to robotics and automation, technology can reshape sustainable supply chains—provided it aligns with luxury consumers’ expectations for quality, craftsmanship, and exclusivity. Efficient production and a reduced environmental footprint must go hand-in-hand with delivering exceptional luxury products and experiences.

When we look at retail, GenAI can elevate customer-centricity. With rising expectations for seamless, engaging, and omnichannel experiences, GenAI enables more intuitive, personalised shopping journeys—enhancing service at every touchpoint.

GenAI offers the luxury category many powerful tools to gain a competitive advantage in an increasingly unpredictable and volatile market. However, while GenAI offers transformative potential, its integration must be thoughtful. The luxury sector is defined by heritage, creativity, and human connection—qualities that cannot be replicated by algorithms alone. Balancing innovation with authenticity is essential. Brands must also navigate concerns around data privacy, security, and ethical use.

Ultimately, the successful adoption of GenAI in luxury hinges on a brand’s ability to harmonise tradition with technology—preserving its unique identity while embracing the tools that will define the future.

Euromonitor International helps organizations understand where and how consumers shop through both traditional and emerging retail channels. Comprehensive international coverage and insights as part of syndicated offerings provide retailers, brands, and others in the industry with data and analysis to help guide decisions on investment, expansion and product positioning by category, channel or country. Bridging methodologies based on data science and on-the-ground research, we provide context to strategic and tactical data, helping you answer your biggest challenges and identify opportunities.

 A number of Euromonitor International reports are available for free to Licensing International members.

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