Luxury’s Retreat Is Premium’s Opportunity

When every dollar matters, “better” has to matter more.

By Rob Douglas

“Killers, Meet KAWS”

Consumers can reconsider what they are willing to pay without abandoning their desire for something exceptional.

That distinction matters for every brand asking people to pay a premium. From handbags and headphones to cameras and chicken, the question is becoming harder to avoid: What makes this worth the extra money?

Luxury offers a revealing place to start.

Global management consulting firm, Bain, estimates that the active luxury consumer base fell from approximately 400 million in 2022 to 330 million in 2025. Some shoppers bought less. Others traded down, chose smaller indulgences or redirected spending toward experiences and secondhand goods.

It would be easy to call that a collapse in aspiration. I see a more useful possibility: a reassessment of what deserves the money.

Luxury has always understood the commercial power of exclusivity. Scarcity, craftsmanship, heritage and belonging can make a product extraordinarily desirable. A higher price can reinforce that distance. (Did someone say Hermès?)

I noticed that distance widening at Chanel several years ago. By June 2024, Reuters reported that its classic flap bag had more than doubled in price since the pandemic, exceeding €10,000 (US$11,400). A purchase that once required a significant stretch had become an entirely different financial proposition.

For some luxury houses, remaining out of reach is part of the appeal. Hermès demonstrates how well that model can work when desirability and disciplined production support it. In 2025, its revenue grew 9% at constant exchange rates, and its recurring operating margin reached 41%.

But every brand cannot assume the same permission. Raising the price changes what a customer must spend. The product, experience and brand still have to justify why.

That creates an opening for premium brands.

Bain identified accessible luxury as the most dynamic luxury segment in 2025, estimating that about half its brands grew, compared with roughly a quarter in aspirational luxury. Coach offers a concrete example: in its fiscal third quarter of 2026, handbag units increased more than 20% while average selling prices also rose at a low-double-digit rate.

People were buying more bags and paying more per bag. There was still room for a compelling premium proposition.

This does not prove that every customer leaving a European luxury house is walking into Coach. It does challenge the assumption that price-conscious consumers have stopped wanting quality, design or distinction.

The opportunity extends well beyond fashion.

At Left Off Madison, our work with Technics, LUMIX, Ajinomoto gyoza and Just Bare chicken has put us close to a shared marketing challenge: turning product differences into reasons people care enough to choose.

With Technics, we identified an unexpected audience for premium earbuds: a younger, affluent and diverse generation of golfers. Competing against much larger audio advertisers, we connected Technics’ sound credentials and DJ heritage to this audience’s intersection of music, fashion and sport. (Have you noticed how many rap artists, club DJs, NBA players and NFL players are hitting the links?)

That strategy extended into HypeGolf (a part of HYPEBEAST), where Technics powered DJ sets, filled the clubhouse with sound and put products directly into people’s hands. Premium quality became something this community could experience within a lifestyle it valued—giving buyers a reason to see Technics as a brand for them.

With LUMIX, the challenge was to earn consideration for premium cameras in a market squeezed by smartphones and dominated by established competitors. Our insight was simple: creating content had become easier, but creating work that stands out remained difficult. “Make Your Best Shot” put real photographers’ imagery at the center of the campaign, demonstrating the camera’s capabilities through the creative achievements it enabled.

For serious creators, we connected the investment to something personally valuable: bringing their vision to life. “Better” became visible in the work they aspired to make.

The same discipline applies in the freezer aisle.

With Ajinomoto’s Japanese-style gyoza, our launch challenged perceptions of what frozen food could bring to the table. Targeting affluent Costco shoppers, we presented the product in the context of entertaining at home—something worthy of serving at a cocktail gathering or dinner party. Premium quality became a benefit people could picture: serving something distinctive, delighting guests and feeling proud of the experience they created. We gave shoppers an occasion where “better” mattered.

With Just Bare, the challenge was to build preference in a category where intense price competition had squeezed profitability. Pilgrim’s Pride needed a premium brand that gave shoppers a reason to choose beyond price. Our approach aligned advertising with retail expansion, connecting consumer demand with the stores carrying the brand. The ambition was directly commercial: make differentiation matter enough to earn the purchase—and support healthier margins.

A shopper might pay more for a product in the grocery aisle while spending less than they would on takeout. That is a useful reminder that “trading up” and “trading down” can happen in the same decision. The comparison that matters may extend beyond the shelf.

A tighter budget does not erase taste, ambition or standards. It makes the trade-offs more consequential.

Consumers are not simply trading down. Many are becoming more deliberate about what is worth paying more for. Brands need to be equally deliberate about the answer.

We’re having this conversation with several premium brands reporting significant sales pressure, which they attribute in part to the economy. Our advice varies with our assessment of their category, competition and the cultural forces shaping consumer choices. But we’re straight shooters: we share what we believe clients need to hear, even when it’s uncomfortable. That recently meant urging a client to refresh its advertising. As we put it, they were using “$3 creative to sell $3,000 devices.”

When the presentation falls that far short of the price, it risks creating doubt before the product gets a chance to prove itself. Creative quality is part of how a premium brand earns trust and makes its price credible.

When every dollar matters, “better” has to matter more.

Quality, values and differentiation are foundations. Turning them into stronger consumer preference requires a clear connection to something people want in their lives.

Better ingredients must earn their place through taste, trust or another benefit the buyer values. Better engineering must improve an experience. Responsible practices must be credible and meaningful to the audience. Distinctive design must deliver a satisfaction someone recognizes as their own.

Advertising has a practical job here: make the difference understandable, make the benefit desirable and give people evidence they can believe. Then carry that argument consistently from the first impression to the product page, store shelf and purchase.

The question for a premium brand is straightforward: Have we made our advantages matter enough to be chosen?

Luxury’s retreat will not hand those customers to anyone. Premium brands will have to earn their attention, trust and spending.

The desire for something exceptional is still an opportunity. The responsibility is to make the case.

Make better matter more.