• by Sarah Mahoney , Yesterday

After years of aggressive price increases, creative upheaval, and a consumer base that has been quietly editing its spending, the global luxury market is finally finding its footing. That's the central finding of Kearney's 2026 Global Luxury Industry Outlook, released this week, which forecasts 2% to 4% growth for the year. While that forecast is a touch more conservative than other industry forecasts, including rival Bain’s prediction that luxury will gain between 3% and 5% this year, it does point to real growth in a choppy sector.

Between 2019 and 2023, the sector shone with an average growth rate of 5%. After a small decrease in 2024, it came in flat in 2025.

Katie Thomas, lead of the Kearney Consumer Institute and co-author of the report, tells Marketing Daily the research focused on three distinct luxury buyers: traditionalists who spend freely and live a full luxury lifestyle; selective splurgers who balance restraint with continued engagement; and aspirational consumers. This final group is the most tentative and closes their wallets fastest when prices or economic uncertainty rise.

But those in all three groups can view themselves as economically fragile. “Many people are considered high-net worth because of income, but they may be one job loss or one housing crisis away from having to really pull back,” Thomas says.

Even among those three subtypes, luxury customers shop due to widely varied motivations. Some will splurge based on craftsmanship, others on trendiness, and some because they sense a good deal.

Generational dynamics also add complexity. Gen Z, often cited as being cool on luxury, may simply be doing what younger consumers have always done. "They have the least amount of money," Thomas says. "It's not atypical to want more affordable things until you have the money to buy the nicer thing." What's notable, she adds, is that younger consumers aren't abandoning luxury brands entirely — they're finding them on the resale market. After all, a Chanel bag on The RealReal is still a Chanel bag.

While the report characterizes the market as normalizing, it is also contracting, with the top 2% of luxury customers accounting for half of all global spending.

The report also took a close look at the industry’s massive design shakeup, with 11 creative directors reshuffling at key brands. That’s three times the historical average. To outsiders, those moves may have looked chaotic or even desperate.

Thomas, viewing this through the lens of the recent Paris Fashion Week, thinks it might translate to better differentiation and a shift away from “quiet luxury” trends of the last few years. "You saw more personality coming back to the brands, and more identity," she says. “That's ultimately how brands are going to win consumers back — when you can look at a collection and say, 'that's Chloe’ or 'that's Bottega.’"

Which brands are most poised to regain their buzz? Thomas is keeping a sharp eye on Dior, owned by LVMH, and Chanel. She is also intrigued by Hermès, whose controversial requirement that customers demonstrate brand loyalty before being offered a Birkin is facing legal challenge — and which Thomas, somewhat against her own instincts, finds defensible. "It does encourage a relationship with the brand that isn't just, come in and buy this one bag," she says.

As for the “dupe” economy, which has so many consumers gleefully pouncing on products from copycat brands like Quince, there’s a silver lining for luxury. Since they’re explicitly built around imitation, luxury houses still reign as the inspirational source.

For now, the market is stabilizing. The question for 2026, the report concludes, is which brands have used the reset to actually learn something — and which ones just waited it out.