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

Kearney releases 2026 Global Luxury Industry Outlook report

Mar. 17, 2026 at 4:08pm

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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.

Why it matters

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, as AI systems increasingly influence discovery, filtering, and purchase. A new momentum is revolutionizing luxury offerings, with three times as many changes of creative directors than previous years, signaling that luxury houses are ready to reinvigorate their brands and offerings.

The details

Together, the United States, Europe, and China 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, with many consumers reallocating spend toward fewer, higher-conviction purchases. Brand loyalty is weakening outside core clients, with switching and reallocation becoming default responses to price pressure. In China, fragmentation, domestic confidence, and experience prioritization point to a normalized growth trajectory rather than a rebound. Competitive advantage will shift toward brands that industrialize AI behind the scenes while preserving human-led creativity.

  • Kearney released the 2026 Global Luxury Industry Outlook report on March 17, 2026.

The players

Kearney

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.

Nora Kleinewillinghoefer

A Kearney partner who is the firm's global lead for fashion and luxury.

Katie Thomas

The lead of the Kearney Consumer Institute, which enhances Kearney's reports with original consumer research.

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What they’re saying

“Luxury isn't entering a downturn. It's entering a normalization phase. 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.”

— Nora Kleinewillinghoefer, Kearney partner and global lead for fashion and luxury (Kearney)

“There isn't just one stereotypical luxury consumer. 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.”

— Katie Thomas, Lead of the Kearney Consumer Institute (Kearney)

What’s next

The report predicts that global economic volatility will persist, keeping margin pressures elevated. However, continued price increases will raise the bar for perceived value, and luxury growth will stay concentrated in top clients and experiences, while aspirational consumers will continue to redefine how—and when—to engage with them.

The takeaway

The global luxury industry is entering a normalization phase, where brands will need to earn relevance through creativity, clearer value, and deeper consumer engagement, rather than relying on scale or price increases alone. The industry is also seeing a shift in consumer behavior, with more selective splurging and weakening brand loyalty outside of core clients.