The agility gap: Why some luxury brands will fall behind

In today’s hyper-dynamic world, the luxury industry faces an unprecedented challenge: the speed of change. Over the past decade, seismic shifts in consumer behavior — fueled by technology, globalization, and generational evolution — have redefined what it means to be a luxury brand. Yet, many brands remain tethered to outdated models, clinging to tradition as if it alone can shield them from the forces of disruption. At Équité, we analyze more than 500 luxury brands across various industries every year, including private banks, family offices, fashion, jewelry, private and commercial aviation, watches, travel, and hospitality. Across these categories, most brands exhibit significant gaps, making them vulnerable to losing relevance as the speed of change increases. In a world where consumer expectations evolve at warp speed, adaptability has shifted from a competitive advantage to a fundamental necessity for survival. The agility divide: How China sets the standard for speed China provides one of the clearest examples of how rapidly the luxury landscape is transforming. Platforms like Douyin have revolutionized e-commerce, giving rise to social commerce by seamlessly integrating entertainment with shopping and creating a new paradigm for consumer engagement. Social commerce now accounts for 20% of China’s e-commerce market, underscoring how quickly consumer habits can shift when driven by technological innovation. Western markets are only beginning to grasp the potential of such platforms, but the lesson is clear: agility and technological fluency are indispensable in today’s luxury market. However, speed isn’t just about technology; it’s also about mindset. Chinese companies have mastered the art of client centricity, adapting to trends with remarkable agility while maintaining a laser focus on client needs. In contrast, many Western luxury brands remain mired in slow decision-making processes and rigid hierarchies that hinder their ability to quickly respond to market changes. This disparity in agility is particularly glaring when it comes to placing the client at the center of all activities. While Chinese brands operate in what could be termed “Marketing 5.0” — a digital-first, fail-fast-and-learn-faster model — many Western brands remain entrenched in “Marketing 1.0,” where product takes precedence over experience and customer engagement. Consider the many German luxury car brands that are losing relevance in the Chinese market at a record pace and experiencing a decline in global market share. While Chinese brands operate in what could be termed “Marketing 5.0” — a digital-first, fail-fast-and-learn-faster model — many Western brands remain entrenched in “Marketing 1.0,” where product takes precedence over experience and customer engagement. Shifting client expectations reshape the industry This lack of adaptability is not just a tactical oversight; it’s a strategic vulnerability that will cost brands dearly. Today’s luxury consumers, particularly millennials and Gen Z, demand more than exceptional products. They seek experiences that resonate emotionally and culturally. They expect brands to align with their values through authentic storytelling that transcends empty marketing slogans. In this context, heritage can no longer serve as a default; it must be reimagined as a foundation for innovation and relevance in the modern era. The evolution of aspiration itself further complicates matters for luxury brands. For decades, luxury was synonymous with exclusivity and ownership. A beautiful handbag or watch symbolized success and status. But aspiration today is far more fluid and multifaceted. It’s about self-expression, cultural connection, and experiences that elevate one’s sense of identity and purpose. Whether it’s bespoke travel adventures or immersive digital experiences supported by AI, consumers now prioritize intangible value as much as tangible goods. This shift demands that luxury brands expand their focus beyond products to create holistic ecosystems that integrate goods with meaningful experiences. Cultural nuance adds another layer of complexity to this transformation. What resonates with consumers in Europe may fall flat in Asia or North America, and vice versa. In China, for example, younger consumers expect seamless digital experiences paired with localized storytelling that reflects their cultural sensibilities. Western brands often falter by assuming that their global prestige will carry them through without adapting to local contexts. This miscalculation not only alienates potential customers but also erodes brand equity in one of the most lucrative markets worldwide. How to build client-focused brands for tomorrow To lead change in this rapidly evolving environment, luxury brands must embrace transformation not as a threat but as an opportunity for reinvention. This begins with rethinking organizational structures to foster agility and innovation at every level, from product development to marketing strategies and customer engagement models. Over the past 18-24 months, many of my luxury masterclasses have focused on this topic, underscoring the critical importance of preparing for the new normal. It also requires significant investment in client insights and training across the entire organization. In sales training, I have repeatedly observed the need for a transformational shift in knowledge — one that incorporates the psychology of luxury clients and data on why loyalty often breaks down. Without such transformational training, luxury brands will fail to inspire the next generation of clients. Moreover, brands must adopt a client-centric approach that places the consumer at the heart of every decision. This means leveraging data analytics to understand evolving preferences, crafting personalized experiences that speak directly to individual desires, and building emotional connections through authentic storytelling. It also means recognizing that loyalty is no longer guaranteed; it must be earned through consistent excellence across every touchpoint. The stakes have never been higher for luxury brands navigating this new reality. Those that fail to adapt risk becoming irrelevant in an increasingly competitive market where the pace of change is accelerating. However, for those willing to embrace change with courage and creativity, the opportunities are boundless. To dive deeper into these insights and hear firsthand from experts on the ground in Shanghai, tune into the latest episode of the Future of Luxury Podcast with Dr. Daniel Langer. I explore with my guests how brands can navigate these seismic shifts and emerge stronger than ever. 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.

The agility gap: Why some luxury brands will fall behind

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Published March 17, 2025

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The agility gap: Why some luxury brands will fall behind