5 key trends shaping luxury fashion sector in 2026

After a year shaped by uncertainty, creative setbacks, pricing shifts, and operational disruption, signs indicate that the global luxury market is heading into a year of stabilization, albeit at a moderate pace. With executive leaders across the board remaining cautiously optimistic, reports from consulting firms, including Deloitte, BNP Paribas, McKinsey, Euromonitor International, and Kearney, all project that the global luxury fashion industry is set to grow in 2026 and beyond. Luxury sales grew by 3 percent in 2025, reaching 1.5 trillion US dollars, according to Euromonitor International’s ‘Luxury and Fashion 2026: Navigating Uncertainty, Embracing Change and Leading with Purpose’, and while growth for the sector is on the horizon for 2026, it is likely to remain in the single digits. 

While external sources forecast growth to fall between 3 and 5 percent, Kearney holds a more conservative projection of 2 to 4 percent in its ‘2026 Global Luxury Industry Outlook report’, with potentially stronger growth in selected regions. Findings from Deloitte support this, noting that 66.9 percent of executives surveyed in its ‘The 2026 Global Powers of Luxury’ report expect stable or growing revenues, while 70.7 percent expect to maintain or improve margins, which suggests a market focused more on disciplined profitability than on broad-based acceleration. BNP Paribas is slightly more upbeat on sales, estimating 6 percent average organic sales growth in its ‘2026 Luxury Goods Sector Outlook’, although the research firm adds that FX headwinds could reduce reported revenue growth to 4 percent.

"Luxury isn't entering a downturn. It's entering a normalization phase," pointed out Nora Kleinewillinghoefer, partner at Kearney and global lead for fashion and luxury, in a statement. "The brands that will win in 2026 won't rely on scale or price increases alone; they'll earn relevance through creativity, clearer value, and deeper consumer engagement." Next to this, what are some of the key factors that are driving this growth? FashionUnited takes a closer look at these findings and highlights five main takeaways that are shaping the global luxury fashion industry in 2026 and beyond. 

1. Spending becomes more intentional, with more selective purchasing

It seems that even the luxury fashion industry is not immune to the rise of intentional shopping (https://fashionunited.com/news/fashion/5-trends-shaping-what-us-consumers-will-shop-for-in-2026/2026022070710). While luxury demand is increasingly driven by high-net-worth and ultra-high-net-worth consumers, who remain stable and account for a disproportionate share of spending, aspirational consumers are becoming more and more selective of what they buy. "There isn't just one stereotypical luxury consumer," said Katie Thomas, lead of the Kearney Consumer Institute, in the ‘2026 Global Luxury Industry Outlook.’ "Our research identified three discrete profiles: aspirational consumers who selectively participate in the category, selective splurgers who balance restraint with continued engagement, and traditionalists who spend freely and live a full luxury lifestyle. But the market continues to fragment spend across categories, from traditional luxury houses to wellness and food and beverage."

According to Kearney, luxury spending is shifting towards emotionally resonant and “defensible” categories such as jewelry and experiences, a change that’s further reinforced by Deloitte’s findings that consumers see experiences and luxury travel among the biggest spending categories, and therefore are among the strongest growth opportunities. At the same time, continued price increases are prompting greater spend reallocation and putting more pressure on brand loyalty among non-core luxury consumers. In its report, BNP Paribas highlights that growth in the luxury fashion sector is increasingly supported by top-tier consumers, while more price-sensitive segments remain constrained, hinting at a two-speed market dynamic. Similarly, McKinsey notes a growing polarization in luxury consumption, where high-spending consumers continue to drive value, while more aspirational consumers are reducing frequency or shifting toward lower-priced categories and alternative formats like resale.

2. Technology is pushing change, going from experimentation to infrastructure 

In 2026, technological advances, like AI, are looking less and less like a potential shiny add-on and more like a must-add to cart. Deloitte notes that 41.2 percent of the luxury companies surveyed are already implementing GenAI in selected areas, while 11.9 percent have already embedded it in core operations. Kearney goes further, noting that according to Market.US, 90 percent of luxury fashion executives see AI-driven approaches like personalization as “essential for their brands.” Spending on AI solutions, services, and integration across luxury fashion brands is predicted to grow at a 16.2 percent CAGR over the next decade. Kearney also points out that AI is expanding its reach and being used across operations from forecasting, design, clienteling, and service, and notes that leading luxury players from Burberry, to Dior, Moncler, and Richemont are using AI in both operations and creative development. 

3. Luxury spend is shifting further toward experiences, wellness, and emotional value

Our definition of luxury is being stretched outside of products into experiences, time-saving, health, and status-rich lifestyle categories. Kearney’s consumer research highlights a clear shift in spending behavior. Among “value-conscious” luxury consumers surveyed, 20 percent report reallocating their spending toward experiences as a result of rising prices, compared to 10 percent across other consumer groups, which indicates that more price-sensitive luxury consumers are now opting to prioritize experiential and intangible forms of value. At the same time, Kearney identifies a “wellness-first enthusiast” segment, which places a stronger emphasis on health, longevity, and wellbeing as part of the luxury proposition. As a result, the report suggests that future growth, particularly in the US, will increasingly be driven by fashion and wellness-led collaborations and offerings, where luxury intersects with personal optimisation, lifestyle, and experience.

Data from Deloitte supports this, as its report finds that customer experience and loyalty are the strongest growth opportunities for 28.6 percent of executives surveyed. 36.2 percent identify luxury travel as the segment with the highest growth potential. Euromonitor International goes on to note that wellness is “no longer niche” and calls emerging markets “the new frontier” as luxury brands look for new sources of growth beyond traditional product-led models. 

4. Resale luxury is maturing into its own

Pre-owned, repair, and resale are no longer side quests for luxury consumers. Deloitte’s research found that 68.3 percent of luxury fashion companies now offer repair or refurbishment services, 53.8 percent run certified pre-owned or trade-in programs, and 44.5 percent partner with resale platforms. A notable shift from using circularity as a branding garnish to circularity as a controlled, margin-conscious alternative platform, Euromonitor International goes on to highlight this “sustainability reframed,” arguing that sustainability is increasingly being treated not just as a compliance burden but as a strategic lever tied to return on investment, cultural relevance, and new revenue streams.

5. Regional distinction will matter more than ever

Luxury growth in 2026 will not be evenly distributed across geographies. BNP Paribas notes that the US is the only region with positive short- and medium-term catalysts, pointing out that it accounts for 23 percent of global sector sales and remains under-penetrated. Looking at China, BNP is constructive, expecting 6 percent growth in 2026, while Kearney is more cautious and expects only low- to mid-single-digit growth, arguing China will remain crucial in scale but is unlikely to be the main engine of global acceleration. However, Kearney does state that three regions, namely the US, Europe, and China, are crucial for steadying the global luxury fashion industry, as they offer scale, infrastructure, and client concentration needed to anchor demand. 

In its report, Deloitte adds that China (19.3 percent), Japan (19 percent), the Middle East (17.9 percent), and India (11.9 percent) are the most influential growth engines for 2026. Adding to this, Kearney highlights that Japan, Southeast Asia, and the Middle East are set to outperform the rest as standout markets building momentum the fastest. 

As the global map of luxury demand is becoming more fragmented, the luxury brand strategy will likely need to become more local, more flexible, and less reliant on one giant engine to succeed.