5 Strategies To Beat the Luxury Slowdown
These cultural vectors are commercial lifelines as interest narrows from the 1% and inflation suppresses aspirational consumption.
The 2025 outlook for luxury is worsening. Previous forecasts of lean 1-2% growth are increasingly optimistic. Now, the most business-critical shift for the industry to appreciate is that the rich are no longer spending widely enough across multiple brands to sustain growth rates – and inflation is not going away.
But some opportunity remains. The global convening power of sport, especially in a divided and insecure U.S. market. A newly individualistic and expressive youth in China. An under-served fashion-literate global male consumer. The expanding middle income and female consumers in the GCC. And — reports of its potential are greatly unexaggerated — gaming.
For brands agile enough to capitalise on them, these cultural vectors are a lifeline in the context of narrowing interest from the 1% and inflation-suppressed aspirational consumption. Now, Donald Trump’s second term has launched trade chaos in the Americas as well as China. His pugnacious nature is unleashing instability worldwide, with reviews of fiscal policy to pay for increases in defence spending in Europe and elsewhere – making the buoyancy of the 5 Focus Points yet more critical.
1. Enter the U.S. Sportsverse
New leagues like Unrivaled and League One Volleyball (LOVB) are already transforming fan/athlete dynamics and minting new sports-stars. In 2024, WNBA games averaged 1.2 million viewers, up 155% from 2023.
2. China’s Youth Is Changing
Guócháo, ‘the national wave’, drove demand for Chinese brands, alongside a movement encouraging youth from the indifference of tang ping or ‘lying flat’ to lüju, a ‘fulfilled journeying state’.
3. Post-Streetwear, Men Are Under-served
“There’s a suit section. And then everything else is either explicitly sportswear or really basic shirts and knitwear”, Felicity Kay, stylist to Paul Mescal, Kit Connor, and Ncuti Gatwa, tells Matter.
4. Courting the Growing Saudi Consumer Cohorts
The goal of 30% female participation in the labour force by 2030 has been achieved. Newly financially independent women join a growing middle-class keen for international brand acknowledgement.
5. Getting Real With Gaming
In six weeks, Michael Kors’ smartphone game amassed 1 million+ downloads, stimulating the creation of nearly 5 million unique scenes by players, styling a diverse array of characters using click-and-drag graphics.
Informed by proprietary data and unique insight from our community of global experts, Matter’s Five Focus Points, summarised and listed below, are extracted from the Intelligence Opinion: How Should the $350 Billion Luxury Goods Industry Regain its Relevance?
1. Enter the U.S. Sportsverse
Sport is one of the last effective mono-cultures globally. Luxury should work with athletes with more nuance and explore new leagues and niche sports to drive connections to communities.
In an extremely divided U.S. market, which remains luxury’s primary driver for growth in 2025, professional sport is uniquely apolitical. In 2025, the opportunity exists for brands to engage with sports in a more nuanced way, increasing emotional impact whilst achieving impressive reach.
Growing sports like F1, as well as new leagues like Unrivaled Basketball League, Ultimate Tennis Showdown, and League One Volleyball (LOVB), are being identified by sector experts as high-potential opportunities.
“These new sports are where we're going to find the new sports stars and new stories,” says Daniel-Yaw Miller, author of the Sportverse newsletter on Substack. “I think brands still haven't really cottoned on to those leagues.” Young athletes are moving away from “plugs” and personal shoppers to focus on working with stylists. “It's not just the top 0.1% of athletes who need full time stylists, it's the majority of them now,” explains Miller.
Sports-sponsorship will grow from $63.1 billion to $109 billion by 2030, forecasts PwC.
“It's not just the top 0.1% of athletes who need full time stylists, it's the majority of them,” Daniel-Yaw Miller
New leagues like Unrivaled Basketball League, Ultimate Tennis Showdown and League One Volleyball are high-potential opportunities for brands
Sports-sponsorship will grow from $63.1 billion in 2021 to $109 billion by 2030, forecasts PwC. The still-criminally-underinvested in women’s sports leagues represent the greatest opportunity. Women also consistently watch male-dominated sports. Currently, over 40% of F1 fans are female. College sports provide another untapped opportunity – as the space where future major athletes’ reputations are minted – and new professional leagues the other.
“Sport is now the only by-appointment thing to tune into live – everything else is on demand. This makes it the only thing left in society that really drives a huge volume of people at specific moments,” Clive Reeves, then head of PwC’s UK sports division, told Daniel-Yaw Miller.
Download Matter Intelligence Opinion, How Should the $350 Billion Luxury Goods Industry Regain its Relevance?
2. China’s Youth is Changing
Miu Miu became synonymous with shifting social attitudes towards age and style in China. The awakening of the country’s young Romantic movement could become a similarly pervasive moment for brands to tap into.
Ultimately, executives need to come to terms with the cultural shift that is taking place. Where China used to receive, rather than incubate, trends, and a designer’s success was determined by reception elsewhere, Western markets now hold less sway over Chinese tastes – partly as a response to growing tensions between global powers. Anti-China geopolitics and an unevenly challenging macro-economic context defined the cultural awakening of young Chinese people and informs the narratives they engage with today.
When it comes to spending, one might point to the rise of niche brands (xiǎozhòng pǐnpái), and a broader desire to define one’s personal style, as outlets for younger consumers looking to express themselves and control a part of their lives that remains uniquely their own. Previous generations were taught to spend practically, and work towards success by pulling themselves up by their bootstraps; now younger shoppers are more inclined to spend for emotional and experiential value. Pop Mart, the designer collectible sensation behind the viral blind-box toy (and bag-charm) ‘Labubu’ is just one example.
Chinese Communist Party-favourite lifestyle vlogger Li Ziqi upped the appeal of travelling and living outside dense megacities. Her triumphant return to her 25 million subscribers (after a 3 year hiatus) proving her popularity
Influential youth evolve from ‘tang ping’, lying flat, to ‘lüju’, a fulfilled journeying state, as per the Financial Times
国潮 (guócháo) the ‘national wave’, has driven greater demand for homegrown brands
A so-called national wave (guócháo) has driven greater demand for homegrown brands and new interpretations of traditional Chinese design (xīn zhōngshì). What’s more, niche brands (xiǎozhòng pǐnpái) are rising in popularity amongst Chinese youth, alongside a broader desire to define one’s personal style. This renewal of national pride comes alongside a homegrown movement encouraging Chinese youth to move from indifferent “tang ping” (lying flat) to “lü ju”, a fulfilled journeying state.
“Disenchantment with desk jobs and growing discourse around work-life balance have driven young Chinese to immerse themselves in nature and seek fulfilment in less material things,” Zoe Suen writes in the Matter Memo: China’s Youth is Changing. Online, content centred around rural living, such as those by lifestyle vlogger Li Ziqi (25 million subscribers on YouTube alone), has helped up the appeal of travelling and living outside dense megacities.
This kind of genuinely emergent access-point into authentic culture is rare in China, and believed to be far stickier than female empowerment narratives, according to our experts on the ground. If Miu Miu’s dominant success in China was the consequence of the brand becoming synonymous with shifting social attitudes towards age and style, the awakening of China’s young Romantic movement could become a similarly pervasive social moment for brands to tap into.
Contact us to request access to the Matter Memo: China’s Youth is Changing
3. Post-Streetwear, Men are Under-served
Culturally as well as commercially, the middle-ground between formalisation and casualisation represents mainstream male fashion today – it remains under-served.
Chris Black, co-host of the How Long Gone podcast, tells Matter: “The biggest shift [in men’s culture] is that it's cool to be into clothes as a man… Guys want to buy them, just to buy them and to be a part of something. It used to be, not even weird, it just wasn't popular culture.”
In the wake of streetwear’s rise and fall, a much more engaged and still-growing male fashion consumer cohort has been established – whose needs are still misunderstood. Post-streetwear, “formalisation has happened,” says Daniel-Yaw Miller, but streetwear’s legacy is still felt: “There's been an inherent casualisation that has meant that everyone is in that middle zone.”
The new fashion-aware male consumer is still under-served by the menswear market. Felicity Kay, stylist to Paul Mescal, Kit Connor, and Ncuti Gatwa tells Matter, “There’s a suit section. And then everything else is either explicitly sportswear or really basic shirts and knitwear”. As Daniel-Yaw Miller says, “How many of the most influential groups dress now is in a homogenized middle-ground, where you want to be able to move in various circles and settings and environments whilst looking good, whilst looking sophisticated, but without looking overly formal or overly casual.”
“Boys that are interested in fashion will wear more directional things, but won't be pushed to a point of a Miu Miu ballet flat, for example” — Felicity Kay, stylist to Paul Mescal, Kit Connor, and Ncuti Gatwa
“The ‘I'm in my blank era’ style speaks to certain consumer behaviours,” — Jian DeLeon, men's fashion and editorial director at Nordstrom
WGSN predicts “Soft Masculinity” as a key trend for 2025
By serving the male consumer the same old handful of silhouettes, use-cases, and aesthetics, too many brands are alienating an increasingly engaged, enriched, and excited cohort. The lions’ share of strategies should aim to bridge this gap.
Successful brands straddle formal and casual, whilst also leaning into newer masculine aesthetics: as Felicity Kay tells Matter, there are “boys that are interested in fashion will wear more directional things, but won't be pushed to a point of a Miu Miu ballet flat, for example, within their day to day wardrobe. It's that middle-ground, it's something softer.”
WGSN predicts “Soft Masculinity” trends in 2025, with accessories like Alice bands and headbands set to make their way into men’s wardrobes, rising by 25% in the US.
Jian DeLeon, men's fashion and editorial director at Nordstrom, describes to Matter what he calls: “the ‘Nomad’ – it’s a good descriptor of where the majority of young customers are. They don’t say, ‘who am I going to be?’, they say, ‘who am I going to be today?’. The ‘I'm in my blank era’ style speaks to certain consumer behaviours.” The new everyman is looking for middle-ground, adaptable products that barely exist yet: successfully executing this are brands like Our Legacy (with $40 million in annual revenue according to the New York Times, the brand recently sold a minority stake to LVMH), Auralee, Lemaire, Saman Amel, and Evan Kinori.
4. Courting the Growing Saudi Consumer Cohorts: Women and Middle Income
The race to connect in the GCC is on. Businesses that augment and platform GCC culture at the scale it deserves will not only unlock growth, they will be celebrated for it.
The Kingdom of Saudi Arabia’s (KSA) Vision 2030 goal to achieve 30% female participation in the labour force by 2030 has already been achieved. This consumer cohort of women recently empowered to work are newly financially independent consumers.
In the KSA, an upward trend on retail spend-per-capita was already evident. Euromonitor found that retail spend sits at an average of $800 annually, increasing by 15% between 2022 and 2024. However, 60% of the luxury spending by HNWI is abroad in London, Paris, and Dubai etc. KSA’s 15% sales tax and limited product ranges are significant barriers — international luxury brands’ product assortments are 10-40% greater in the US than in the UAE.
“These consumers expect international brands to provide exclusive, region-specific merchandise, personalized VIP services, and exclusive in-store events and experiences that match international standards,” said an anonymous member of the Matter Intelligence Community.
The proportion of KSA women in managerial positions grew from 8% to almost 20%
“For people that have the purchasing power, the Emirati and the locals, the Saudis, for them it's all about word of mouth”
International luxury brands’ product assortments are 10 to 40% greater in the US than UAE
Cultural mores around privacy and modesty make influence more genuine, but harder to engage. In the GCC, influence starts in the inner circle: friends, family and local figures. Social media is the main source of information for luxury purchases at around 50%, followed by brand websites at roughly 20%. “In terms of high net worth individuals and people that have the purchasing power, the Emirati and the locals, the Saudis, for them it's all about word of mouth,” our anonymous member adds.
70% of the top 50 luxury brands have released Eid or Ramadan collections. Launching a range of abayas to coincide with Eid, or a jewellery collection channeling the colours of a national flag to coincide with national and founding days are positive steps forward — but there remains a lack of nuance or a broader increase in investment in activations and engagement strategies that are fitting given the financial significance of the region.
The race to connect in the GCC is on. Businesses that augment and platform GCC culture at the scale it deserves will not only unlock growth, they will be celebrated for it. 73% of luxury consumers believe brands should reflect the society they live in, however, less than 15% of local luxury customers feel represented in current advertising. Ermenegildo Zegna is showing its SS26 season in June in Dubai this year.
5. Getting Real with Gaming
A recent attention study by Dentsu found that gaming commands 100% ad-viewing rates, outperforming other media such as social, which stands at 79%.
Today, 76% of adults in the U.S. are gamers, and the industry is now larger than the global box office and music industries combined. Overall, there are estimated to be more than 3 billion gamers worldwide, as per Priori Data.
And unsurprisingly, these hyper-engaged gamers make very attentive consumers: Bain & Company found that immersive gamers are even more engaged than non-immersive gamers. The VR gaming market is projected to grow to $24.51 billion in 2025. A recent attention study by Dentsu found that gaming commands 100% ad-viewing rates, outperforming other media such as social media, which stands at 79%. Moreover, Activision Blizzard Media found that immersive experiences drive greater ad recall, purchase intent, and brand favorability.
A study by Dentsu found that gaming commands 100% ad-viewing rates
Immersive gamers are even more engaged than non-immersive gamers, as per Bain & Company
The VR gaming market is projected to grow to $24.51 billion in 2025
There is a cultural bifurcation occurring in videographic entertainment. XR stages and high budget film making are pushing the boundaries of fully-realised digital worlds which will likely create a novel integration of movie and gaming experiences in the next decade. Instead of green screens, entire universes are rendered and displayed in perfect detail behind live actors, removing reliance on the natural worlds for sets entirely.
However, in gaming, the best, richest graphics are not necessarily defining success – just picture Roblox’s block-head style avatars, or the pandemic popularity of the simple mobile game Among Us. Minecraft, whose aesthetics are stubbornly anti-realistic, remains one of the most popular games of all time and vies for number-one-best-seller status with the even simpler Tetris. As The New York Times reports, “video game graphics have become hyperrealistic over the past four decades, with companies pouring money into the technology, but in recent years the visual upgrades have had diminishing returns." Nintendo has told its customers that graphics are not a priority for the company.
In February 2024, Michael Kors launched a limited-time collaboration with Fashionverse, a gaming solution for fashion backed by Hilfiger Ventures, in collaboration with game publisher Tilting Point. Inspired by Michael Kors’ spring collection, players partook in daily scenes: airport travel, the office, and photoshoots, while styling a diverse array of characters using simple click-and-drag graphics. Very much in the vein of the Kim Kardashian Hollywood game. In just six weeks it amassed over a million downloads and saw the creation of nearly 5 million unique scenes by players.
As a result, there are two plays for the industry in gaming. Collaborate in building intricate, stunningly-realised digital worlds and gain the skills and refine the processes that will unlock metaversal digital products. Or, use high levels of engagement and cheaper-to-produce interfaces to capitalise on the widest-spread global digital behaviour.
Look out for the Matter Memo: ‘Digital Immersion’ in H2 of 2025.