As inflation and cost-of-living pressures bite, Australia’s luxury sector is undergoing a notable transformation.
According to The Growth Distillery’s recent report, The Forces Shaping Luxury, consumer expectations are evolving, with emotional and practical motivations driving spending more than ever before.
This evolving landscape poses both challenges and fresh opportunities for brands looking to connect with the luxury shopper of tomorrow.
The new luxury consumer
The study outlines six distinct consumer profiles emerging within Australia’s luxury market, each with their own priorities and values:
Young, Free and Earning: Young adults with high incomes who pursue luxury as a marker of status, valuing quality and social recognition.
Freed Up and Returning: Older Australians rekindling their interest in luxury purchases, often motivated by emotional rewards.
Property Wealth Builders: Ambitious younger buyers focused on quality goods that reflect their personal values.
Driven, Diverse and Rising: Culturally diverse, goal-oriented men who associate luxury with achievement.
Wealth Transfer Recipients: Individuals who have recently inherited wealth and seek status symbols and exclusive experiences.
Non-Traditional Wealth Creators: Young entrepreneurs prioritising innovation and personalised luxury products.
The segmentation underlines how generational shifts and economic factors intersect to redefine what luxury means across different demographics.
Bethan Hockey, Research Director at The Growth Distillery
Strategies for brands to capitalise on shifting demands
The report highlights three critical areas brands should focus on to secure growth in this evolving marketplace:
Forge emotional and cultural connections: Nearly half of luxury consumers now place experiences above tangible goods, signalling a move toward deeper emotional engagement rather than purely transactional exchanges. Luxury brands must tap into cultural narratives and personal stories to resonate meaningfully.
Tailor messaging for diverse consumer segments: Different luxury profiles require bespoke communication strategies. For example, appealing to the “Returning” segment involves framing luxury as an emotional reward, while messaging targeting “Non-Traditional Wealth Creators” should emphasiSe innovation and novelty.
Utilise gateway categories for expansion: Beauty, jewellery, and watches demonstrate significant cross-category appeal, up to 70% intent crossover, making them effective entry points for brand loyalty and growth within the luxury space.
The future of luxury marketing in Australia
Bethan Hockey, Research Director at The Growth Distillery, said: “Luxury’s future depends on emotional and cultural relevance, not just exclusivity or price tags. Brands that successfully integrate immediate commercial goals with longer-term legacy-building will be best positioned to lead this transformation.”
With consumers increasingly demanding authenticity and personal relevance, luxury brands must rethink traditional approaches, embracing diverse consumer narratives and prioritising meaningful experiences.
The Growth Distillery’s insights offer a roadmap for brands ready to engage a more nuanced and discerning luxury audience.
As luxury evolves, so too must the stories brands tell, stories that go beyond product to speak to identity, aspiration, and experience.