• by Sarah Mahoney , 3 hours ago

Bain & Company's new luxury report is out, and while the research confirms the market is stabilizing after a downturn, it also points to a new definition: Led by American consumer spending, meaning and experience are the real status symbols, not the luxury itself.

"This is not a return to the old rhythm, it is the emergence of a new one," writes Claudia D'Arpizio, senior partner and lead author of the study. "Consumers are not stepping back from luxury. They are stepping forward into a new relationship with it — one defined by meaning, not just by product. The brands that will win are those that can continuously reinvent their relevance and resonate with both consumers and AI-led ecosystems."

Two big changes: Consumers are now consulting AI, in some form, as they shop. And half look for pre-owned items before buying anything new.

Luxury sales are strongly divided by region. Despite macroeconomic volatility, affluent Americans — especially younger ones — are leading the charge, driven by U.S.-native brands. Europe and the Middle East remain a drag on overall performance.

The personal luxury goods market slipped to roughly $387 billion in 2025 at current exchange rates, down from about $393 billion the prior year, and Bain expects it to recover to somewhere between $394 billion and $403 billion in 2026. The first quarter of this year was rough globally, with the market off 3% to 5%, but the second quarter is showing improvement.

In the Americas, U.S.-native brands are up 10% to 15% compared to the first quarter of 2025.

The data finds two clear breaks. First, the young are outspending the old, with consumers under 35 spending about 4 percentage points more than older cohorts. And second, the somewhat affluent are outpacing the truly wealthy. They are choosing luxury-casual and everyday wear over special-occasion purchases, and happily buying masstige beauty products rather than true luxury items.

But Bain says the data points to something much deeper than handbag-flashing or logo-flaunting. These younger shoppers are bent on acquiring signals of their identity and belonging. Experiences and travel still matter more than bling or apparel. It's all about meaning.

That's a complex concept, which Bain explains as luxury's "amplification era." In these new relationships, luxury no longer defines what people own, but how they live — moving beyond elitism, aspiration and self-expression to something bigger.

It's more of a psychological pivot than a fashion trend. It means a shift from social validation to self-actualization, from possessions to lived moments, and — this is an important one — from being admired to feeling fulfilled.

One pronounced example is showing up in travel, giving rise to a trend called "Elsewhereism" — the yearning to get off the beaten path. People are spending heavily, with a 20% increase in trips beyond traditional hotspots, an investment in immersive, slow-travel experiences once they arrive, and a rise in multigenerational trips that foster early brand affinity across generations.

The report also points to a reshuffled purchase funnel. Half of luxury consumers currently use AI, and nearly all of them plan to continue. One in four use it to discover products, but when the search intensifies, two out of three turn to AI for product comparisons before buying.

That all comes down to three imperatives, Bain notes: delivering wonder through immersive experiences; creating cultural relevance for diverse communities; and harnessing AI-driven personalization to make every customer feel like the collection was made for them.

"The appetite for luxury remains strong. The tolerance for disappointing experiences or products does not," writes Federica Levato, senior partner and co-author of the study. "Over 70% of customers who have left luxury intend to return — but not necessarily to the same brands. The question is whether brands are building the meaning and AI-native relevance, to be surfaced and chosen when that moment arrives."