2025 Luxury Trends: What Experts Predict

As 2025 approaches, the luxury sector is at a pivotal moment, shaped by shifting consumer behaviors, economic challenges, and a growing demand for ethically produced goods. This evolving landscape presents opportunities for luxury brands willing to adapt and innovate.

Despite cost-of-living pressures affecting many lifestyle businesses in Australia, market research reveals a robust domestic luxury market, projected to grow at 5.3% annually, reaching $6.2 billion. Prestigious international brands such as Louis Vuitton and Gucci continue to expand in cities like Sydney and Melbourne. This trend extends to hospitality and wine, with 67 Pall Mall opening a members-only wine club on Melbourne's Spring Street.

With 2025 on the horizon, luxury brands must rethink their strategies. The key question is: how can they fully embrace the evolving values of luxury consumers, especially among younger generations?

Sustainability, Inclusivity, and Ethical Indulgence

As younger consumers enter the luxury space, they bring heightened expectations for ethical consumption. Luxury is becoming more inclusive, forcing brands to balance heritage with sustainability.

Joanna Reymond, Founding Director of Reymond Communications, highlights the shift in the luxury hotel space: “The focus on sustainability and technology is positively influencing the guest experience while being good for the environment.” Hotels are incorporating natural materials, managing waste, and sourcing locally produced, organic ingredients to create eco-friendly dining and hospitality experiences.

Hyper-Personalisation and Cultural Authenticity

A shift toward experiential luxury is evident, where sustainability meets hyper-personalised experiences. Brett Phillips, Owner of 3 Deep Agency, explains the importance of creating unique experiences: “Culturally rooted, hyper-local experiences allow brands to stand out, offering guests a chance to engage with food, wellness, and rituals that connect them to a place.”

Phillips cites The Ritz-Carlton, Melbourne, as an example of a hotel creating such culturally immersive experiences. For luxury brands, tapping into local culture and offering bespoke services has become key to differentiating from mass-market competitors.

Quiet Luxury Values Discretion and Conscience

The growing affluence of younger consumers is reshaping the luxury market. According to marketing consultant Natalie Ajay, “Luxury is entering a new era, where discretion and deep customer connection take precedence over flashy tactics.”

In an era of global unrest, consumers are gravitating toward understated luxury that aligns with their values. Experiences tied to meaningful causes—such as resorts investing in forest regeneration or brands with B Corp certifications—are becoming more appealing. As Ajay puts it, “Social conscience is the new currency in the luxury sector.”

Resale Sustainability in the Luxury Market

Natalie Perkov, Director of an indie beauty startup in the US who has worked with luxury brands like Omega and L’Oréal, predicts significant changes in the luxury market by 2025. "Wealthy individuals will begin selling off some of their high-end items, which will attract those seeking luxury at a second-hand price." The resale market is expected to grow, indicating a broader shift toward thoughtful purchasing, prioritising quality, uniqueness, and sustainability over mere extravagance.

Daniella Sorace, General Manager at KateCo. PR, reflects on her experience after returning from New York Fashion Week, observing that "the evolving landscape of fashion and luxury is poised for a significant shift. Sustainability is emerging as a priority factor in consumer purchasing behaviours."

The collaboration between Netflix’s Emily in Paris and Vestiaire Collective highlights growth in this sector. Luxury brands are being held accountable and must ensure transparency in their collections as consumers focus on loyalty and alignment with trustworthy brands. Sorace also notes the flourishing vintage shopping trend within the luxury market: "I follow a bevy of talent on TikTok and have curated a list of vintage stores in major cities. Giving pre-loved timepieces or brooches a second life makes my heart flutter."

Premiumisation Drives Sustainable Luxury Choices

Pat Nourse, Creative Director at the Melbourne Food & Wine Festival, notes the trend of premiumisation in the food and beverage sector, where consumers are seeking less-but-better options, especially regarding alcohol. "In my corner of the world, the key macro trend in luxury is premiumisation. There’s an expectation that luxury brands should be on the cutting edge of sustainability. Durability and care for heritage are, after all, key parts of the idea of luxury."

Luxury brands are expected to lead in sustainability, focusing on quality, craftsmanship, and meticulous supply chain management as the market becomes crowded with cheaper alternatives. "True luxury is one of the best ways for a brand to cut through the noise," Nourse adds.

Local Chinese Consumers and Targeted Promotions

Jessica Xue, General Manager at The Gaibo Agency, highlights the growing opportunity for Australian luxury brands to engage local Chinese consumers. “Natural, eco-friendly products and high-end food items are in high demand,” she says.

Key events like Chinese New Year and Singles Day offer prime opportunities for brands to create targeted promotions. Emphasising brand heritage, exclusivity, and digital innovation—such as AI-driven customer service—will enhance personalisation and elevate the customer experience for this key market segment.

Wellness and Health: An Integral Part of Luxury

The luxury sector is increasingly integrating wellness and health into its offerings. Joanna Reymond points out that hotels are evolving into wellness facilities, emphasising bathing and sauna experiences. This trend reflects a broader consumer desire for holistic well-being during travel. "Emerging trends include linen choices for beds, now going beyond the pillow menu, where guests can opt for their preferred bed linen," Reymond explains.

Ty Bentsen, who leads business development for BMF, an experiential marketing agency in the US, states that the luxury market is moving in new and unexpected directions, showing no signs of slowing in 2025. "Sports marketing—particularly women’s sports marketing—is going to continue its rise to cultural prominence in the year ahead, offering smart luxury marketers an opportunity to connect with affluent consumers and align with their values."

A report from Deloitte forecasts that women’s sports will surpass $1 billion in revenue for the first time by the close of 2024, a 300% increase from 2021. Marketers can be among the 'first in' to reach engaged consumers in an unexpected luxury lane. Authenticity will be of utmost importance to seize this moment without appearing to pander or be opportunistic.

The Future of Luxury Marketing

As we approach 2025, the luxury sector is undergoing a transformation. Sustainability, hyper-personalisation, and wellness integration are now defining themes.

“This shift is part of a larger movement toward more thoughtful consumption,” Perkov concludes. “In 2025, it’s not about having the most expensive item—it’s about making smart, curated choices that still feel luxurious but align with how people want to spend their money.”

The future of luxury is about forging meaningful connections, prioritising the planet, and delivering personalised experiences that resonate with today’s conscientious consumers.