Global luxury isn't what it used to be--and that's good

Kearney releases 2026 Global Luxury Industry Outlook report

• Three regions—the United States, Europe, and China—are crucial to stabilizing the industry. Together, they provide the scale, infrastructure, and client concentration that anchor global luxury demand. The definition of luxury continues to evolve, as certain luxuries became democratized and others remain truly exclusive or scarce.
• Spending is becoming more concentrated and more intentional. The global luxury customer base continues to contract, with the top 2 percent of clients now accounting for nearly half of total spend.
• Technology will continue to shift competitive power. Embedded across forecasting, design, clienteling, and service, AI is rapidly evolving from experimentation to infrastructure. AI systems increasingly influence discovery, filtering, and purchase. Visibility is earned through clarity, data integrity, and trust—not brand heat alone.
• A new momentum is revolutionizing luxury offerings. Last year witnessed three times as many changes of creative directors than previous years, a clear signal that luxury houses are ready to reinvigorate their brands and offerings.

CHICAGO, March 17, 2026 /PRNewswire/ -- Kearney's 2026 Global Luxury Industry Outlook report finds that after a year of creative resets, pricing recalibration, and operational discipline, the global luxury business, which barely managed to hold its ground by the ends of its well-manicured nails in 2025, is on track to show growth. The report states 2026 is likely to deliver 2 to 4 percent growth, but unevenly distributed across regions, categories, and client tiers.

"Luxury isn't entering a downturn. It's entering a normalization phase," observed Nora Kleinewillinghoefer, a Kearney partner who is the firm's global lead for fashion and luxury. "The brands that will win in 2026 won't rely on scale or price increases alone; they'll earn relevance through creativity, clearer value, and deeper consumer engagement."

Here are five key findings from the analysis:

• Selective splurging is the new middle: Many consumers are not exiting luxury, but reallocating spend toward fewer, higher-conviction purchases.
• Value scrutiny is reshaping behavior: Brand loyalty is weakening outside core clients, with switching and reallocation becoming default responses to price pressure.
• China is stabilizing, not accelerating: Fragmentation, domestic confidence, and experience prioritization point to a normalized growth trajectory rather than a rebound.
• AI is becoming foundational: Competitive advantage will shift toward brands that industrialize AI behind the scenes while preserving human-led creativity.
• In the world of luxury, 2026 is about earning relevance: Winners will prioritize resonance, discipline, and defensible growth over scale, speed, or price escalation.

Of course, nothing happens in business without a customer. This year's report was enhanced by original consumer research, which shows that luxury consumers, like all consumers, are works in progress. "There isn't just one stereotypical luxury consumer," said Katie Thomas, lead of the Kearney Consumer Institute. "Our research identified three discrete profiles: aspirational consumers who selectively participate in the category, selective splurgers who balance restraint with continued engagement, and traditionalists who spend freely and live a full luxury lifestyle. But the market continues to fragment spend across categories, from traditional luxury houses to wellness and food and beverage."

Looking ahead, the report finds that luxury is normalizing, not structurally declining. It predicts global economic volatility will persist, keeping margin pressures elevated. However, continued price increases will raise the bar for perceived value.

The authors anticipate that luxury growth will stay concentrated in top clients and experiences, while at the same time, aspirational consumers will continue to redefine how—and when—to engage with them.

Read the full report.

For more information, to schedule an interview with Nora Kleinewillinghoefer or Katie Thomas, or to receive a copy of the study, please contact:

About Kearney

For 100 years, Kearney has been a leading management consulting firm and trusted partner to three-quarters of the Fortune Global 500 and governments around the world. With a presence across more than 40 countries, our people make us who we are. We work impact first, tackling your toughest challenges with original thinking and a commitment to making change happen together. By your side, we deliver—value, results, impact. To learn more about Kearney, please visit www.kearney.com.

About the Kearney Consumer Institute

The Kearney Consumer Institute (KCI), part of the Kearney Foresight network, evaluates today's business challenges and opportunities through the eyes and experiences of consumers, advocating a consumer-first perspective. By leveraging consumer behavior data and insights, the KCI helps generate conversation, and ultimately action, around how to address consumer needs with meaningful benefits.

Using a consumer-first lens the KCI looks at today's consumer revolution not by thinking about consumers, but by thinking like consumers. Our consumer-centric approach includes simple, precise, plain-language conversations on topics like trends, consumer communities, convenience, loyalty, service, fair pricing, and product development and technologies.

Media contact:

Meir Kahtan Public Relations
Meir Kahtan
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SOURCE Kearney