You need empathy to sell luxury

We have been repeating for some time that fashion is in crisis. The global luxury market, according to data from the Osservatorio Altagamma 2024, shows signs of a slowdown following the impressive rebound recorded during the post-Covid period. Geopolitical tensions, international conflicts, inflation, and the loss of consumer trust in brands are to blame if the demand for luxury appears frozen, especially in China. However, a clearly emerging positive trend is related to experiential luxury, which continues to grow with a 5% increase in 2024: sectors such as hospitality, fine dining, and wellness are among the main drivers of this growth, all sharing the importance of the human touch. The message is clear: empathy sells. The demand for exclusive and personalized experiences is increasingly central to the luxury sector, and in fashion, a key role is played by physical retail, which has recorded a 5% increase amidst this crisis. Brands have long recognized the importance of this channel, placing a strong emphasis on tailored services, customer entertainment with special events, and experiential sales that strengthen the bond with consumers who do not merely want to wear luxury clothes but also want to feel special. Beyond being expensive, luxury must also be something intimate, personal – only with this human contact can increasingly skeptical customers be separated from their money.

 

According to Altagamma, even the digital channel, growing by 3%, shows a close connection with physical retail, as online experiences are often supported by direct interaction in stores. But the theme of the human side of fashion permeates the entire Altagamma summary. Even when discussing future consumption growth, the report considers resumed travel—experiences in which consumption occurs—as a necessary condition: Europe is expected to grow by 2%, driven by tourism, while North America will maintain a leading role with an estimated 3.5% growth. For China, the situation remains uncertain. Beyond hot issues such as prices, young people's disillusionment with luxury, Chinese luxury shame, and the many challenges Made in Italy will face due to emerging international protectionism, Claudia D'Arpizio and Federica Levato from Bain & Company highlighted that the ability to offer excellent experiences and invest in creativity will be crucial for regaining consumer trust, particularly younger consumers. Thus, experiential luxury represents one of the main levers for the market's future: as the idea of moving massive volumes of goods through a jungle of e-commerce platforms has sunk, along with Farfetch, it has become clear that people are needed to sell things. During the conference, Prada Group CEO Andrea Guerra also stated that his vision for the future of luxury is to «make consumers fall in love» and to tell «a story and certain values», actions that presuppose a human and emotional element, primarily communicated in person.

 

The same sentiment was echoed in the latest report from BoF and McKinsey, The State of Fashion 2025, which states in its opening: «Brands that do not wish to play in these categories [resale and off-price segments, ed] must demonstrate to customers why their products are worth the premium price. One way to achieve this is by improving the shopping experience. Consumers are returning toin-store shopping at pre-pandemic levels across much of the world, but retailers need to remindshoppers what they love about the in-store experience». In short, economic scenarios may change, but the basic truths of commerce remain the same, even as the role of physical stores continues to evolve: where once people visited stores to discover new items, now they often know what to expect and thus the store is more akin to a church celebrating a wedding than a bar for a first date – if the metaphor can be forgiven. In the store, the customer is loyalized, in some ways profiled, and of course treated with every courtesy. It is no surprise that 54% of clothing consumers still prefer to shop in physical stores rather than online. This, from a business and operational standpoint, translates into a greater emphasis on customer service: according to the BoF report, 70% of store customers tend to spend more if the service is of high quality, while poor service, whether due to a lack of staff or lackluster interactions, can lead to a loss of up to 20% in sales. This is doubly true for two categories currently far from luxury: aspirational customers and young people. Aspirational consumers are twice as likely to seek staff advice compared to middle-tier or high-value customers, while young people are 1.5 times more likely to do so compared to those over 50.

This data is also highly relevant for the crucial Chinese market, which, while slowing down, remains vital for any brand. Daniel Langer, CEO of Équité, wrote this week in Jing Daily that the in-store experience is the most crucial touchpoint between luxury brands and their customers, yet many brands continue to underestimate its importance. A recent "mystery shopping" exercise conducted by Langer for a global luxury brand revealed that customer support is often inadequate, with boutique staff frequently leaving potential customers waiting for long periods – something easily observed by visiting certain Montenapoleone boutiques on a Sunday afternoon. In any case, the concept of luxury revolves around putting the customer at the center, and any failure to do so compromises the brand's entire promise: long waits, product unavailability, and lack of privacy are things the wealthy detest, and for the affluent, who may be ready to splurge in an afternoon the equivalent of a small business's annual turnover, discretion and intimacy are fundamental elements. According to Jing Daily, an average of 1.7 disappointing experiences is enough to make a customer leave a brand, and in retail, as in fishing, a fish that gets away rarely bites again. In short, for Langer (and we do not disagree), the in-store experience tangibly represents the brand’s values.
 

In this context, brands face two key challenges: the first is using technology to optimize store workflow so that staff can fully focus on customers; the second is making the sales role desirable, transforming salespeople into well-paid experts and friends rather than a kind of valet. But beyond the strictly operational data, the deeper meaning of these notions is that the moment of sale, the pivot around which the colossal luxury mechanism revolves, is increasingly elusive and fragile, the culmination of a delicate choreography where the commercial transaction must be aided by psychology and a human factor that is by definition unpredictable and difficult to categorize. For brands, therefore, delving deeper and better exploring the human side of fashion corresponds to recognizing and confronting their own vulnerability in a historical moment that, in light of the rise of economic protectionism and nationalistic fashion, could prove more delicate than ever.