Here’s a remarkable statistic: The top 1 percent of the richest families in the U.S. own 32 percent of the total wealth, according to the Federal Reserve. And, according to data from Moody’s Analytics, the top 10 percent of earners account for 49.2 percent of all U.S. consumer spending.
When looking at expenditures on discretionary products, the top 10 percent of households ranked by income account for about 25 percent of that total spend, according to Bank of America.
All good news for the luxury market.
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Here’s better news: The U.S. has millions of affluent households and a record number of multi-generational “mega-wealthy dynasties.” Forbes has reported a record 54 multi-generational families worth at least $10 billion each, holding a combined $1.9 trillion.
So, why is the luxury sector seeing a slowdown?
First, higher-income households can only buy so much. But more importantly, the luxury market is slowing down due to a loss of exclusivity, aggressive price hikes and a steep decline in Chinese consumer demand, as well as a shift in spending toward travel and experiences.
Regarding the price hikes, the increases have been in the double digits with European luxury brands climbing more than 50 percent between 2019 and 2024. As a result, middle-income and so-called aspirational consumers have been alienated. According to Bain & Co., more than 50 million aspirational shoppers have stepped away from the market.
In addition, over-expansion and a relentless push for volume have diluted the sense of rarity and exclusivity that defines true luxury, which is causing tens of millions of casual and younger shoppers to also walk away from luxury purchases.
That is changing, however.
According to Sourcing Journal sister publication WWD, the top-tier luxury brands have spent the past two years wooing back aspirational and younger consumers. Brands such as Ralph Lauren and Coach have expanded into the aspirational pocket of the market. And high-end brands such as Louis Vuitton have leaned into beauty, fragrances and sneakers as well as collaborations to build an accessible entry point while also preserving their high-end positioning.
But in the past two years, the aspirational shopper has also evolved. Stricken by inflationary pricing, mounting credit card debt and higher costs of living, the aspirational consumer still wants high-end brands, but they also prioritize value while expecting well-made products. They want complimentary experiences and invites to exclusive brand events. They are also turning to resale to score their favorite luxury handbag, and this could have an impact on the upcoming holiday shopping season.
According to data from Ernst & Young (EY), 62 percent of surveyed aspirational luxury clients said they are willing to buy pre-owned products directly from brands, “an 8 percent year-on-year increase, with just 6 percent saying secondhand would make them less likely to buy.”
Of those polled, 75 percent of aspirational consumers said they are likely to repurchase from a brand that offers complimentary experiences, “and 73 percent are willing to pay for access to exclusive luxury events.” However, the data also showed that 30 percent of respondents report not having received any complimentary experiences or invites to exclusive events in the past 12 months.
In EY’s recent state of the luxury consumer report, the firm noted that aspirational luxury consumers are reshaping what value means while staying anchored in traditional luxury principles. Research shows purchase decisions are driven mainly by product substance, brand legitimacy and enduring value.
The report’s authors said material quality (65 percent) and brand heritage (52 percent) rank as the top motivators. Although emerging factors like sustainability influence consumer expectations, luxury remains defined by tangible product quality, craftsmanship, and brand credibility.
The data also showed a strong affinity for established heritage houses, with 56 percent of respondents preferring well-known brands. This trend intensifies with age, EY researchers said. Niche labels serve a complementary function by offering differentiation through novel craftsmanship. They appeal most to younger and lower-spending demographics, such as Gen Z (17 percent).
“In this environment, long-term success will depend less on broad market expansion and more on how effectively brands engage, convert and retain aspirational luxury clients,” the EY report stated.
How these trends play out for the holiday shopping season remains to be seen. At the moment, aspirational shoppers are aligned with the spending expectations of other consumer cohorts. They are shopping earlier and looking for deals like most everyone else. Mary Hines Droesch, head of consumer and small business products and analytics at Bank of America, said, “Consumers are being more deliberate this year, from setting their own timelines to staying focused on their budgets.”
In Bank of America’s holiday survey, 48 percent of all shoppers polled said they expect to spend about the same this holiday season as they last year—which is up from 39 percent in 2025.
Jon Copestake, global consumer senior analyst at EY, told Sourcing Journal that while there is talk of the “K-shaped economy,” this will cascade into spending habits at a household level. “Consumers will look to economize heavily on much of their festive spending but will identify select discretionary items to splash out on and treat themselves. This may be a symptom of the current inflationary environment where economic uncertainty prevails, but selective frugality is a shopping habit that consumers have been honing since the global financial crisis almost two decades ago.”
Copestake said this is not a trend distinct to individual income groups, “but a reflection of value seeking behaviors and increased visibility of provenance and performance alongside price.”
He said this might be “expressed through buying luxury gifts through cheaper second-hand platforms or it might be expressed through cherry-picking the bulk of your Christmas dinner shopping in a hard discounter but splashing out on a locally sourced turkey and fine wine.”
“In a world where economic uncertainty has become a persistent factor, conscious consumption can confer status more than conspicuous consumption,” he added.
So, what does this shifting behavior mean?
First, the evolution of the aspirational luxury consumer clearly signals the end of careless, volume-driven price hikes and mass-market over-expansion. For luxury brands and retailers, long-term survival hinges on a delicate balancing act. They must preserve the rare heritage and tangible craftsmanship that attract consumers to high-end houses while restructuring the entry point for a financially constrained middle tier.
For retailers, they must move beyond traditional transactional models and lean into hybrid strategies such as integrating authenticated resale, offering robust experiential perks and delivering undeniable product substance.
As holiday shoppers embrace a “K-shaped” mindset of selective frugality and conscious consumption, brands that fail to validate their price points through meaningful engagement and enduring value risk losing their aspirational base for good.
