European luxury: A new report reveals the challenges and growth prospects
In 2024, the value of the premium and luxury sector is down 1 percent compared to the previous year and now stands at 1,417 billion euros. These figures reflect the sector's sensitivity to recent economic fluctuations.
'In a baseline scenario where current turbulence gradually subsides, the luxury sector should reach a market size of between two trillion and 2.5 trillion euros by 2030,' the ECCIA study states. The experts confirm: 'The macroeconomic uncertainty following recent tariff announcements makes it difficult to define a single, clear evolutionary scenario.'
The personal luxury goods market, which includes fashion, currently represents about a quarter of the entire luxury goods sector. It has experienced robust growth over the past five years, with a CAGR (Compound Annual Growth Rate) of 5 percent from 2019 to 2024 (estimate). In 2024, the market is expected to experience its first slowdown since the Great Recession (2008-2009), excluding the impact of Covid-19, with a projected contraction of two percent at current exchange rates compared to the previous year.
In this context, ECCIA is sounding the alarm: 'Retaliatory measures, including tariffs and non-tariff barriers, threaten the industry's ability to maintain competitive access to these essential export markets,' the organisation stated in a press release. The rise of protectionist discourse could heighten tensions for a sector that relies heavily on open markets. ECCIA concluded: 'Moreover, our production cannot be relocated, as our business model and attractiveness are based on European cultural heritage and expertise.' Key pillars of luxury
To maintain positive momentum, luxury and premium players must keep in mind the maintenance of key pillars: aura; craftsmanship and technical excellence; creativity and innovation; sustainability and social responsibility; customer experience; selection of their distribution network; and their global appeal. Focus on six of them. Aura
Aura is an essential value lever in the luxury sector. It encompasses a brand's heritage, creativity, emotion and exclusivity to create a strong emotional bond with the consumer. In the age of digital technology and AI, where luxury codes are increasingly imitated, brands must preserve the authenticity of their creativity by combining innovation and heritage. Tomorrow's aura will no longer be limited to rare objects and materials. It will be expressed through strong emotional experiences, consistent storytelling and sincere engagement with contemporary issues such as inclusion, identity and social responsibility. Aura will thus become a marker of meaning as much as distinction. Craftsmanship and technical excellence
The future of European luxury depends on brands' ability to preserve and transmit their craftsmanship in the face of two major challenges: the rise of local competition in emerging markets and the scarcity of skilled craftspeople in Europe. To address this, brands are investing in training, academies and actions to promote crafts, in order to guarantee succession and strengthen the attractiveness of these professions. By anchoring this expertise in the future, they are securing their value chains while reaffirming their uniqueness in an increasingly competitive global market. Sustainability and social responsibility
The future of European luxury relies on ever-deeper integration of sustainability and social responsibility at the heart of business models. Rooted in craftsmanship and respect for nature, luxury brands must continue to innovate to protect their resources, while strengthening transparency, traceability and ethics throughout their value chain. In a context of increasing regulation, it will be essential for them to be able to make their sector-specific characteristics heard, in order to build ambitious, coherent and consumer-understandable sustainable strategies. Customer experience
The future of luxury lies in deepening the relationship between brands and customers, far beyond the act of purchase. To remain relevant, brands must offer immersive, cultural and emotional experiences that fully integrate into their customers' lifestyles and values. By cultivating these authentic connections through exclusive events and personalised interactions, they will strengthen their place in each consumer's personal world, transforming loyalty into lasting attachment. Selective distribution
The future of luxury relies on increasingly selective, controlled and omnichannel distribution, in order to preserve exclusivity while meeting the expectations of a demanding global clientele. Brands will need to continue to closely integrate physical and digital channels to offer personalised, consistent and emotionally engaging experiences. This strategy will not only strengthen loyalty and perceived value, but also protect product integrity in the face of growing grey market risks, while guaranteeing a direct and controlled relationship with each customer. Global recognition and appeal
To stay ahead, brands will need to step up their global marketing investments, adapting to the specific expectations of key markets such as Asia, the Middle East and the US, while preserving their European identity based on excellence, creativity and expertise. This strategy will enhance their attractiveness to an increasingly diverse and demanding international clientele. This article was translated to English using an AI tool.
FashionUnited uses AI language tools to speed up translating (news) articles and proofread the translations to improve the end result. This saves our human journalists time they can spend doing research and writing original articles. Articles translated with the help of AI are checked and edited by a human desk editor prior to going online. If you have questions or comments about this process email us at info@fashionunited.com
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