Sensormatic Solutions, global specialist in retail solutions from the Johnson Controls group, has published its “2025 Luxury Retail Report.” The report offers a clear assessment: the luxury sector is experiencing a silent crisis marked by declining foot traffic, evolving consumer expectations, and the accelerated transformation of distribution models.
In this context, and as the SIEC opens — the essential platform connecting retailers, brands, and commercial real estate players — the luxury market is undergoing a profound shift. A new generation of consumers, younger, more connected, and seeking experiences, is redefining the rules. Digitalization, the rise of second-hand markets, and sustainability are strategic challenges for brands.
The SIEC will provide an opportunity to explore far beyond luxury: all the retail trends of tomorrow will be showcased through practical and operational exchanges among all sector stakeholders.
The luxury sector faces a silent crisis
Tense economic context and decline in in-store traffic
Once considered resilient, the luxury sector is now experiencing an unprecedented global crisis, marked by a sharp decline in foot traffic across major world markets. In China, foot traffic dropped by 10% in 2024, while in France it fell by 6.4%, reaching as much as -30% in outlets during the Paris Olympics. The trend is similar in the United States, Spain, Italy, the United Kingdom, and Germany, where most weeks observed show a continuous decline in traffic. Neither major international events nor key sales periods have managed to reverse this trend.
In a tense economic environment, characterized by inflation, geopolitical uncertainty, and declining consumer confidence, even the most iconic brands struggle to maintain their activity. The result: a contraction of the global luxury market estimated at -2% in 2024, and a significant slowdown in store openings, with a 22.5% decrease in Europe according to Cushman & Wakefield.
For Hervé Vervoort, France Director of Sensormatic Solutions: “Economic uncertainties and changing consumer priorities have led to a significant decline in luxury store foot traffic in France, especially during key periods such as the year-end holidays.”
Events with no lasting impact
The study reveals that neither festive periods (Black Friday, Christmas) nor major events like the Paris Olympics or the UEFA Men’s Euros have been able to sustainably reverse this trend. Even traditional boutiques—historically more stable than outlet stores—struggle to stop the decline in foot traffic.
In France in particular, outlet stores prove to be significantly more volatile than in other European countries, with extreme fluctuations during major events.
Widespread decline in consumption
The economic situation, marked by geopolitical uncertainty, declining consumer confidence, and rising living costs, is affecting one of the historically strongest sectors. According to the Bain study, the luxury goods market for individuals reached €363 billion in 2024, a 2% decrease compared to 2023.
The Cushman & Wakefield report confirms this trend: the number of luxury store openings fell by 22.5% in Europe, with only 83 stores opened in 20 key luxury streets, compared to 107 in 2023.
Shopping malls, data, and digital: the new pillars of a luxury sector in transition
Customer experience: luxury becomes immersion
The demographics of the luxury market have radically shifted. According to the study, 45% of luxury product buyers are now Millennials, while Baby Boomers account for only 11% of the market. This new generation is seeking more than just products—they crave emotions, well-being, and authenticity.
At the same time, the global population of ultra-high-net-worth individuals (UHNWI, wealth > $30 million) is expected to grow by 38% by 2029, reaching nearly 587,650 people. As of 2024, 2.3 million people worldwide have a net worth exceeding $10 million (source: Knight Frank Wealth Report 2025).
The Kantar study reveals that 84% of respondents believe that “luxury is above all an exceptional in-store experience.” As a result, brands are investing heavily in immersive and multi-sensory experiences. The store is becoming a storytelling space—through pop-ups, connected fitting rooms, and VIP services.
This trend is reflected in strategic investments: Versace has opened its first luxury hotel in Asia at the Grand Lisboa Palace Resort in Macau, Dior Spa has launched at The Lana in Dubai, and LVMH has acquired the iconic restaurant Chez L’Ami Louis while opening the first “Café Louis Vuitton” in the United States.
Digital: toward a phygital and seamless luxury
New generations—particularly HENRYs (High Earners, Not Rich Yet), who earn between $100,000 and $250,000 annually with an average age of 40—expect seamless, omnichannel, and personalized shopping journeys. Digital technology and data have become essential allies for physical retail, enabling:
● Real-time foot traffic analysis
● Optimization of customer flow
● Enhanced in-store customer experience
● Deep personalization of services
Brands must move beyond the traditional divide between e-commerce and brick-and-mortar stores to create a phygital luxury experience aligned with modern expectations. The United Arab Emirates stands out in the study for showing significant increases in luxury traffic, highlighting the success of integrated digital strategies.
Sustainability: toward a more responsible and local luxury
The rise of second-hand luxury is reshaping the industry in a profound way:
● The market is valued at $37.2 billion in 2024, growing at +8.5% annually (IMARC Group)
● 28% of global luxury buyers purchase pre-owned items (up to 41% in China, per Kantar)
● 40% of consumers planned to buy a pre-owned watch in 2024—double the figure from 2020 (Deloitte)
Major brands are quickly adapting to this shift: Chanel and Hermès are limiting the production of certain models to enhance resale exclusivity, while Gucci, Valentino, Burberry, and Stella McCartney are launching their own resale programs or partnering with platforms like Vestiaire Collective.
At the same time, luxury leaders are securing their supply chains: LVMH acquired the Spanish tannery Grupo Verdeveleno, and Chanel, Prada, and Zegna are investing in Italian wool producers—further integrating responsible and high-quality production practices.
The emergence of new consumption models
The study reveals emerging trends among young HNWIs (High Net Worth Individuals) under the age of 35:
· 20% rent luxury items
· 17% engage in co-luxing (shared purchases among friends)
· 55% place greater importance on their well-being, with planned investments in spas (43%), hospitality (40%), and fine dining (37%)
Market consolidation and strategic acquisitions
The industry is experiencing increasing consolidation, with LVMH, Kering, and Richemont now accounting for 31% of global personalized luxury goods sales, up from 19% in 2014. The recent acquisition of Versace by the Prada Group for €1.25 billion illustrates this consolidation trend.
However, the McKinsey report reveals that more than 80% of the sector’s growth is driven by price increases rather than a true expansion in volume, with costs having risen nearly twice as fast as general inflation since 2022.
In the face of an unstable environment and a younger generation of buyers—more demanding and purpose-driven—luxury brands are being forced to fundamentally rethink their model. No longer just a status symbol, luxury is becoming about experience, engagement, and innovation.
As the researchers highlight in the study: “Luxury today is something you live, not just something you own.”
According to Arnaud Gallet, Director of Siec 2025: “The luxury sector is undergoing a profound transformation, one that is not merely cyclical but truly structural. In response to declining footfall and the expectations of a new generation of connected and discerning buyers, brands must rely on strong pillars such as omnichannel strategies, immersive experiences, and data to remain desirable and innovative. At Siec 2025, we will showcase these major developments that are redefining luxury retail real estate.”
