How luxury brands can rebuild client trust in 2025

Each year, I take time to reflect on the state of the luxury industry and offer recommendations for the year ahead. At the end of 2023, I predicted that 2024 would be a battle for survival for many luxury brands — and that forecast has proven to be spot on. The luxury industry finds itself at a critical juncture as we approach 2025. The recent Bain study reveals a stark reality: a fundamental erosion of trust between luxury clients and brands. And trust is the most important currency for luxury brands, serving as the foundation for desirability. The trust deficit has manifested in alarming ways across nearly all dimensions. As a result, the luxury sector is facing a significant loss of clients — the first time this has happened in a non-crisis year — along with an all-time-low net promoter score and a widespread perception that prices are simply too high. When luxury consumers feel this way, it’s a clear indication that brands are failing to communicate their value proposition effectively. This should come as no surprise. Our studies show that more than 90% of luxury brands have significant brand storytelling deficits. Their brand positioning is often too vague, relying heavily on product features rather than expressing client-centric values. Consequently, most brand positionings I encounter are drowning in the “sea of sameness,” lacking distinction and, therefore, unable to unlock the true power of luxury. The consequence? Billions of dollars lost in revenue and profits. This crisis of trust calls for a radical rethinking of how luxury brands connect with their audience. The solution lies not in superficial changes or mere product innovations but in a profound reimagining of brand storytelling. Luxury brands must break free from the sea of sameness that has homogenized the industry and dare to be bold and distinctive. This issue cannot be solved simply by changing the creative director. The all-time-high revolving door of creative directors we witnessed in 2024 — across fashion, automotive, and other luxury sectors — is symptomatic of brands in crisis mode. However, simply replacing talent will not suffice if the underlying brand story remains stagnant or unclear. There is basically no correlation between appointing a new creative director and brand success. Success only comes when the brand DNA is clear and client-centric and when the creative director innovates and inspires in alignment with the brand story. Sadly, this is the exception, not the rule. Steps to rebuild trust To rebuild trust, luxury brands must make their DNA tangible and relevant to today’s discerning consumers. This requires a deep dive into the psychology and values of luxury clients, followed by the identification of unique emotional selling propositions. The mistake brands often make is treating this as an advertising campaign rather than a holistic task that requires engagement at all levels of the organization. I’ve seen countless examples of brands delegating this responsibility to advertising agencies, which may excel at building campaigns but rarely have the expertise to translate a brand vision into a client-centric story. This misstep could cost brands years of potential success. A brand story should not be confined to an advertising campaign; it must be integrated into every aspect of the brand experience, from product design and customer service to digital presence and in-store delivery. It also needs to be emotional — relying on legacy or craftsmanship alone is no longer enough. Brands must craft a compelling narrative that explains why they matter in today’s world and what role they play in the lives of their clients. Ultimately, it’s about creating a value proposition that goes beyond the product, speaking to the lifestyle and values of the consumer. Brands must craft a compelling narrative that explains why they matter in today’s world and what role they play in the lives of their clients. Moreover, luxury brands need to embrace authenticity and transparency. In an age where consumers are more informed and skeptical than ever, brands can no longer hide behind a veil of mystique. They need to be open about their processes, sourcing, and pricing strategies, clearly demonstrating the value they create. This transparency, combined with a strong brand story, can justify premium pricing and help rebuild the trust that has been lost. As we look toward 2025, luxury brands must also reconsider their approach to innovation. True innovation goes far beyond creating new products or technologies; rather, it’s about transforming the entire brand experience. This could mean reimagining retail spaces to offer more immersive and personalized experiences, leveraging digital technologies to enhance human interactions, or finding new ways to engage with customers beyond the point of sale. The brands that will win in 2025 and beyond will be those that dare to be different, those with the courage to reinvent themselves while staying true to their core values. They will be the brands that understand that luxury is not just about exclusivity or high prices but about creating meaningful connections and unforgettable experiences. The imperative for luxury brands is clear: rebuild trust through authentic storytelling, innovative experiences, and a clear, compelling value proposition. It’s time for luxury brands to rediscover their voice, stand for something beyond their products, and create stories that inspire and engage. Make your clients care! Get ready for 2025! This is an opinion piece by Daniel Langer, CEO of Équité, recognized as one of the “Global Top Five Luxury Key Opinion Leaders,” and advisor to some of the most iconic luxury brands in the world. He serves as an executive professor of luxury strategy and pricing at Pepperdine University in Malibu and as a professor of luxury at NYU, New York. Daniel has authored best-selling books on luxury management in English and Chinese, and is a respected global keynote speaker. Daniel conducts in-person masterclasses on various luxury topics across the world. As a luxury expert featured on Bloomberg TV, Forbes, The Economist, and others; Daniel holds an MBA and a Ph.D. in luxury management, and has received education from Harvard Business School. Sign up for his online luxury masterclasses at the Jing Academy. Follow him: LinkedIn and Instagram. Listen to his Future of Luxury podcast.

How luxury brands can rebuild client trust in 2025

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Published December 23, 2024

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How luxury brands can rebuild client trust in 2025