Aspirational buyers could save luxury brands from losing more ground | CNN Business

CNN - Feb 22nd, 2025

The luxury goods market is grappling with the consequences of significant price hikes over recent years, which have driven away approximately 50 million consumers by 2024. These 'aspirational' luxury buyers, who typically spend between $3,000 and $10,000 annually on high-end fashion, were priced out as brands raised prices by about 20% since 2021. In response, some companies, like British luxury group Burberry, are revisiting their pricing strategies to accommodate these consumers. Burberry's CEO, Joshua Schulman, announced a return to a more accessible 'good, better, best price' architecture across product categories, resulting in global new customer growth and a 4% increase in store sales in the Americas during the third quarter of 2024.

Luxury brands now face the challenge of balancing exclusivity with accessibility. While some brands, such as Moët Hennessy Louis Vuitton, maintain that current consumer demand is more influential than pricing, others are adapting to cater to aspirational shoppers. These consumers are critical to the luxury market, contributing nearly $274 billion annually, and often opt for lower-priced luxury items such as accessories and fragrances. Companies are also enhancing the in-store experience, focusing on customer service to retain and attract these consumers. This shift reflects a strategic pivot to ensure luxury brands remain appealing to a broader audience while preserving their exclusive allure.

E Commerce Economic Impact Consumer Behavior Luxury Goods Price Hikes Burberry Aspirational Consumers Joshua Schulman Moët Hennessy Louis Vuitton Aaron Cheris Mc Kinsey & Co.

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RATING

7.2

Fair Story

Consider it well-founded

The story provides a detailed examination of how luxury brands are navigating the challenges posed by economic pressures and changing consumer dynamics. It effectively uses expert insights and brand strategies to illustrate the current state of the luxury market. However, the article could benefit from a more balanced representation of consumer perspectives and greater transparency in the data sources. While it is timely and relevant, its focus on luxury goods may limit its broader public interest appeal. Overall, the article is well-written and informative, offering valuable insights into the evolving strategies of luxury brands.

Accuracy

The story presents several factual claims that are generally supported by sources, such as the price increase of luxury goods by 20% since 2021 and the exclusion of 50 million customers by 2024, attributed to Aaron Cheris from Bain & Co. However, the story could benefit from more precise verification of these figures. For instance, the claim about aspirational luxury consumers spending between $3,000 and $10,000 annually is attributed to McKinsey & Co., but the article doesn't provide direct access to McKinsey's data. Additionally, the story's accuracy hinges on the interpretation of market strategies and consumer behavior, which are complex and may not be entirely captured by the cited sources. The figures related to Gucci's revenue decline and Kering Eyewear's growth are specific, yet the story lacks direct citations of financial reports to substantiate these claims.

Balance

The article primarily focuses on the perspectives of luxury brands and industry experts, which may introduce a degree of bias towards the business side of the issue. It provides insights from Burberry, McKinsey, and Bain & Co., but does not include viewpoints from consumers who are directly affected by the price changes. This omission can lead to an imbalanced representation of the issue, as the consumer perspective is crucial to understanding the impact of luxury goods pricing. Furthermore, the story does not explore alternative viewpoints, such as those from economic analysts or consumer advocacy groups, which could provide a more comprehensive understanding of the market dynamics.

Clarity

The article is written in clear and accessible language, making it easy for readers to follow the narrative and understand the key points. It logically progresses from discussing the impact of price hikes on luxury consumers to exploring the strategies brands are adopting to address these challenges. The use of quotes from industry experts and executives adds depth to the discussion, although some sections could benefit from more detailed explanations. Overall, the article maintains a neutral tone and avoids overly technical jargon, ensuring that the information is comprehensible to a general audience.

Source quality

The article references credible sources such as Bain & Co., McKinsey & Co., and executives from luxury brands like Burberry and LVMH. These sources are authoritative in the fields of market analysis and luxury retail, lending reliability to the claims made. However, the story could improve by including a wider range of sources, such as independent analysts or academic experts, to provide a more diverse perspective. The reliance on industry insiders may introduce a potential conflict of interest, as their insights are likely aligned with business objectives. Despite this, the use of recognized experts and companies adds to the overall credibility of the information presented.

Transparency

The article provides a reasonable level of transparency by attributing specific claims to named experts and companies, such as Aaron Cheris and Joshua Schulman. However, it lacks detailed explanations of the methodologies behind the data and projections cited, such as how the 50 million customer loss figure was calculated. Greater transparency could be achieved by clarifying the basis of these figures and any potential conflicts of interest that might influence the perspectives of the quoted sources. Additionally, the article does not disclose any potential biases that might arise from the affiliations of the experts cited, which could impact the impartiality of the information.

Sources

https://ktvz.com/category/money/cnn-business-consumer/