For years, luxury brands like Chanel and Louis Vuitton consistently increased the prices of their handbags and accessories by a few percent annually. This strategy seemed logical as demand remained high and inflation contributed to rising costs. However, it appears that this method is beginning to falter, forcing brands to rethink their pricing strategies to sustain and capture consumer interest.

Luxury brands are currently experimenting with pricing strategies amid tentative signs of an economic rebound in the luxury goods market. Despite the potential recovery, major producers remain cautious, facing significant challenges, especially from decreased sales in China, a key market for the luxury sector. Furthermore, there is a notable decline in demand from aspirational customers, who are generally less affluent but contribute increasingly to luxury sales.

According to Bain & Company in their report from last year, luxury brands could lose up to 50 million customers between 2022 and 2025 due to a shrinking market. Research from the French market research institute Les Echos Études indicates an even more alarming trend: there has been a recent exodus of younger consumers from luxury brands, who are seeking more value-oriented alternatives. This shift in customer demographics could have significant implications for the luxury market, prompting brands to reconsider their market positioning and engagement strategies with middle-class consumers.