How luxury brands can supercharge growth with ‘4E’ framework

The latest Bain & Company in partnership with Altagamma luxury study offers an alarming yet crucial insight: luxury brands are facing a loyalty crisis, especially among millennials and Gen Z. The Net Promoter Score (NPS) across the luxury sector has plummeted, falling below pre-pandemic levels, driven by a sense of dissatisfaction that is deeply unsettling in an industry that depends on loyalty and desirability. The significant drop in loyalty among the largest and youngest client group —millennials and Gen Z combined — serves as a clear warning: brands cannot expect a market turnaround without decisive change. While some may attempt to ride out this wave, the issues are deeper and brand-specific. It’s time for luxury brands to reconsider their approach, rebuild trust, and deliver the value clients expect. Why the disillusionment? Four key factors are eroding the trust and passion that luxury brands once easily inspired: perceived high prices, lack of authenticity, limited personalization, and an overemphasis on products rather than experiences. Four key factors are eroding the trust and passion that luxury brands once easily inspired: perceived high prices, lack of authenticity, limited personalization, and an overemphasis on products rather than experiences. For the past two years, I’ve observed these cracks widening and have issued stark warnings in my articles and keynotes about the need to radically rethink brand storytelling and the client experience. The Bain study now quantifies it: more than half of luxury clients feel brands are simply overpriced. The result? A generation of luxury consumers who feel unvalued and uninspired. This crisis calls for a transformative strategy. I have published and presented extensively around the world on the “4E” framework for managing luxury brands successfully in times of rapid change: Emotion, Experience, Exclusivity, and Engagement. Here’s how brands can prepare them to meet the higher expectations of today’s luxury clients. Emotion: Reigniting value beyond price Luxury is pure emotion. Consequently, the brand story and client experience must evoke strong emotional responses. When clients see price tags that feel disproportionate to the emotional appeal of the brand, they disconnect. It’s not the price itself — it’s the lack of emotional value. Millennial and Gen Z clients, in particular, are seeking brands that feel personal and meaningful. To win them back, brands must evoke emotion at every touchpoint. Extensive research into the psychology of luxury purchases consistently shows that the anticipation of a significant shift in emotion and perception is what drives people to buy luxury. Emotion elevates a beautiful object into a beloved artifact of personal significance. Luxury brands that inspire through their brand story — and integrate that story into everything they do — are the ones that earn loyalty. A Hermès Birkin bag or Patek Philippe watch are investments not just because of their craftsmanship but because of the emotional worlds they open. Experience: Beyond product, and into the lifestyle Today’s luxury buyers aren’t satisfied with a beautiful object alone; they want to be immersed in a brand’s world. Experience isn’t a buzzword. It is the difference between a transactional purchase and a meaningful interaction. Clients today want to feel like insiders — part of a special community, something that feels exclusive and elevated. Imagine the sense of exclusivity in a private Chanel show or the invitation-only preview of a new Rolls-Royce. These experiences give depth to the luxury brand, making clients feel that they belong to an elite circle. This shift from product-focused to experience-rich strategies is at the heart of my 4E framework. The brands that thrive will be those that move beyond transactions, creating spaces and moments where clients don’t just see the product — they live it. The challenge is to consistently create exceptional experiences at scale, ensuring that clients feel valued every time. If brands aren’t creating this feeling, they risk falling behind. Exclusivity: The essence of luxury Luxury was born from exclusivity, but for today’s clients, exclusivity means more than scarcity. It’s not just about owning what others cannot; it’s about connecting deeply with a brand that feels as unique as their personal identity. However, according to Bain, many clients feel disconnected from the brand’s DNA, unable to find meaning in its story. For luxury brands, this is a sign to re-evaluate what exclusivity means in the digital age. True exclusivity lies in a unique, client-centric brand story that clients can’t find anywhere else. Brands must look back at their core values, find what makes them truly special, and bring it forward in a way that resonates with modern clients. For a client to feel that a brand “gets them,” it must speak authentically and passionately. This is not a return to elitism, but rather the creation of a sense of belonging for those in the know. Exclusivity doesn’t mean untouchable; it means personal. Engagement: Personalization as the standard The Bain study makes it clear: personalization is no longer optional. Today’s luxury clients expect to feel like the brand knows them personally. This is where the 4E framework’s focus on engagement becomes essential. True engagement means connecting with clients on their terms. It’s a two-way street, where the brand listens as much as it speaks. If brands want loyalty, they must know their clients inside out — their preferences, their dreams, and even their quirks. Think about a high-end restaurant that remembers your favorite wine or a tailor who knows your unique taste and measurements, inspiring you with something new that complements your wardrobe at every visit. Luxury clients crave that level of connection in every interaction. When brands master engagement, they are creating deep relationships — connections that become the foundation for loyalty and turn clients into lifelong advocates. A new era in luxury The Bain study is not only a wake-up call for luxury brands but a roadmap. The decline in loyalty is not just a blip that will solve itself; it’s a message from the very clients luxury brands claim to serve. The 4E luxury framework offers a powerful way forward. Importantly, a quick fix or surface-level change won’t be enough. It’s about building lasting relationships, inspiring clients, and creating experiences that feel truly luxurious. Ultimately, luxury is not about price. It’s about delivering extreme value that feels worthy of the price. Brands that understand this — that integrate emotion, experience, exclusivity, and engagement into every aspect of their business — will lead the industry into a new era of loyalty, relevance, and success. This is an opinion piece by Daniel Langer, CEO of Équité, recognized as one of the “Global Top Five Luxury Key Opinion Leaders to Watch.” 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 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 masterclasses at the Jing Academy. Follow him: LinkedIn and Instagram. All opinions expressed in the column are his own and do not reflect the official position of Jing Daily.

How luxury brands can supercharge growth with ‘4E’ framework

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Published November 18, 2024

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How luxury brands can supercharge growth with ‘4E’ framework