When your best clients are spending more but feeling less satisfied, you’ve got a problem money can’t fix. Welcome to luxury in 2025, where high speed does not guarantee high satisfaction and high tech is the only way to keep the human touch alive (if that oxymoron makes any sense).
After years of post-pandemic euphoria and pricing power plays, luxury prices have climbed at nearly twice the rate of general inflation since 2022. Iconic handbags? Some have doubled in price since 2019. That strategy may have pleased shareholders, but it came at a cost: 50 million customers exited the luxury category globally over the past two years, according to Kearney.
What’s left is a smaller, more concentrated consumer base—and greater pressure on brands to get it right. The market’s gravitational pull has shifted toward Millennials (45%) and Gen Xers (24%), who now account for the bulk of luxury spending, while Boomers represent just 11%. These digitally fluent, expectation-heavy clients aren’t buying into heritage but, instead, into how well you know them.
And yet, too many still feel unseen. Brand loyalty is eroding among VICs (Very Important Clients), particularly in fast-growing regions like the Middle East, where a young, connected population is raising the bar. You see, despite their loyalty and largesse, many high-net-worth customers feel underwhelmed by the experience. Translation? Personalization must be the new business model.
The personalization imperative
Personalization has long been a hallmark of luxury. However, today’s VICs expect more than just tailored products; they seek experiences that anticipate their desires and seamlessly integrate into their lifestyles. As Stefania Lazzaroni, CEO of Altagamma, emphasized at the 2025 RLC Global Forum, these clients “travel a lot and expect to be recognized in Milan, in Paris, as well as in Riyadh.” This level of expectation demands a unified approach to client recognition and engagement across all touchpoints.
To meet these demands, brands are turning to advanced technologies. Artificial intelligence (AI) and machine learning are being leveraged to analyze vast amounts of data, enabling sales teams to craft personalized outreach strategies. These digital solutions can curate product recommendations, suggest optimal engagement moments, and tailor communications, leading to higher conversion rates and deeper brand loyalty.
Bridging the data divide
While the tools are available, the challenge lies in effectively integrating them into existing infrastructures. Many luxury brands grapple with outdated data systems and internal silos that hinder the seamless delivery of personalized experiences. Kearney notes that while brands have invested in consumer-facing tech, most are still held back by fragmented systems and internal silos—issues that derail even the most ambitious personalization strategies.
Geoffroy van Raemdonck, former CEO of Neiman Marcus Group, highlighted the importance of addressing these issues at the RLC Annual Meeting in Riyadh, noting that achieving personalization at scale requires overcoming “outdated data sources” and breaking down organizational silos. He further emphasized that such initiatives must be championed at the highest levels of leadership to drive meaningful change.
Regional nuances
Understanding regional differences is crucial. In markets like Europe, clients may prefer intimate one-on-one interactions, while in regions such as China or the Middle East, there’s a stronger emphasis on community involvement and events. Brands must tailor their personalization strategies to align with these cultural preferences to foster genuine human connections.
The Middle East, in particular, presents unique opportunities and challenges. With a young, tech-savvy population (the median age is under 30, and increasingly favors brands that combine exclusivity with digital fluency), platforms like Snapchat have become integral to the luxury shopping experience. Hala Zgeib, Head of Luxury at Snap Inc., pointed out that augmented reality (AR) features allow consumers to virtually try on products, bridging the gap between digital engagement and physical retail. This technology not only enhances personalization but also caters to the region’s youthful demographic, which is highly engaged with digital platforms.
A recipe for success: Making tech personal
In luxury, algorithms may drive outreach, but empathy seals the deal. The brands that lead aren’t the ones with the fanciest tech, but the ones who use it without losing sight of the experience. In a world where everyone’s chasing personalization, true human connection is still the rarest luxury of all.
So what does success look like in a market that’s cooler and more demanding?
First, brands need a unified personalization strategy—one that blends digital intelligence with human instinct. The best clienteling platforms don’t just track purchases; they help predict needs and deepen relationships. AI should support—not replace—client advisors.
Second, clean up the back end. Legacy systems and data silos kill seamless experience. Without real-time insights, even the smartest tools will misfire.
Third, go local. What feels personal in Paris might fall flat in Riyadh. Personalization must reflect culture, not just customer profiles.
And finally, use tech with intent. AR, AI stylists, generative content—when done right—reduce friction and add moments of magic that feel made just for one.
The bottom line? Personalization isn’t a mindset. It’s what defines luxury in 2025. And the brands that make tech feel like touch will be the ones clients remember.
