Aspirational shoppers are cutting back. What next?

The consensus across the latest round of earnings calls is that the aspirational luxury consumer is taking a step back. How are brands and retailers adapting —?and what will this mean for the US market? Discover the latest report from #VogueBusiness for exclusive insights and analysis.

Brands are seeking to compensate for the decline in spending by the aspirational consumer by raising prices and targeting wealthier shoppers with discretionary funds to spend.?

The drop in spending by aspirational consumers was highlighted in earnings calls in the first half of this year. LVMH CFO Jean-Jacques Guiony emphasised the impact during Tuesday’s second-quarter earnings call.?

Analysts initially expected the second half of the year to improve, given that year-on-year comparisons tend to be easier at this point, according to Jessica Ramírez, senior research analyst at research firm Jane Hali & Associates. However, it isn’t panning out, given ongoing inflation and associated volatility in the US.?

The changing market is reflected in a move away from lower-priced products. Sneakers showed the most significant decline within luxury assortments, with new offerings down 34 per cent year-on-year.

Brands with lines at the more affordable end of luxury, including Coach, Diesel and Ralph Lauren, have sought to elevate their labels in recent years. The goal is to appeal to high spenders, reducing reliance on the fickleness of aspirational luxury consumer spend, while offshooting Gen Z lines to attract younger consumers that might one day become the brands’ high-spending customers.

The aspirational segment of consumers still merits attention — more than 30 per cent of them still plan to splurge.

From higher-end luxury price increases to more accessible luxury brand elevation strategies, retailers and brands are targeting high-net-worth individuals (HNWIs) in order to ensure financial success amid an unstable US economy.?

Discover the full report, featuring in-depth data and analysis from industry leaders here. Become a #VogueBusiness Member for a truly global perspective on the fashion industry, exploring how cultural trends and global patterns will impact fashion businesses.