As luxury executives become cautiously optimistic about industry growth, experiential luxury emerges as the most promising way forward for brands adapting to shifting consumer values.
Recently, Global Blue, Switzerland base tax-free shopping and payments company, held its Luxury Insights 2025 event in Singapore. At this event, 150 senior executives in the fashion, luxury goods, luxury retail and travel industries discussed the future of luxury retail and the Tax-Free Shopping sphere. These, as well as perspectives from 50 C-level and senior executives were compiled into a High Net Worth Individuals (HNWIs) Travel Sentiment and Travel Retail insights, to look at key trends in luxury this year.
Cautiously optimistic
Most notable of all is that while executives expect growth, their confidence levels have mellowed out, especially as compared to previous years. Less than half of leaders (41%) expect business performance in 2025 to improve, as compared to 2024 and 2023, where 50% and 81% of leaders respectively expected growth. Of all respondents, an average of 20% anticipate a slowdown, particularly in China.
The reason for this cautious optimism is that executives are concerned that consumers are trading down, purchasing less expensive alternatives to their usual purchases. As the expectations and values of affluent consumers shift, luxury brands may have to recontextualise their presence, role, and approach to such customers.
Tax-free remains strong
However, even as larger luxury sales slowed in 2023 and 2024, and are projected to slow in 2025, the tax-free market has been resilient. This likely stems from the continually soaring demand for overseas travel and shopping; and the price advantages, varied product assortment, and better service abroad.
In particular, Singapore’s Tax-Free market grew by 7% in 2024, reaching a total of €1.6 billion (SG$2.6 billion). However, this impressive amount is still 10% less than 2019, pre-pandemic, levels. While international shopper arrivals within our borders increased by 17%, the average spent per shopper declined by 8%, sitting at €2015 (SG$2973).
To explain this discrepancy, Jacques Stern, CEO of Global Blue, cites two key forces: firstly, Japan becoming more popular as a preferred shopping destination, and the shifting interest in experiences. The former, he attributes to Japan’s weaker yen, while the latter, he attributes to fluctuations in foreign exchange and price sensitivity.
An experience economy
Experiences as a whole are becoming popular with consumers. 74% of Luxury executives are looking at experiential luxury as a key growth area. Experiential luxury is high-end, exclusive occurrences, such as fine dining, travelling, and private events. These emphasise spending money on creating memories, as opposed to physical possessions.
Singapore’s Food Festival last year is an example of such experiential luxury. Forgoing the usual bazaar style of the food festival, SFF’s three flagship events involved large scale unique immersive events. Another case linked more clearly with a luxury brand is the Prada cafe at Ion Orchard.
This move toward immersive experiences aligns with deeper generational shifts, particularly to millennials and Gen Z. With advancements in technology, these generations have grown up with digital content and social media that has exposed them to the wide array of lifestyles, cultures, and experiences present all around the world—even in their own cities. At the same time, economic and social factors have reshaped younger generation’s relationship with ownership. Rising costs of living, sustainability concerns, and the fleeting nature of trends in the digital age mean that permanence holds less appeal than it once did.
“As we enter 2025, luxury brands must balance confidence with caution. Affluent and high-net-worth consumers are evolving—seeking not just products, but purpose, meaning, andmemorable experiences,” said Amirta Banta, managing director for Agility Research and Strategy.
“Those brands that can truly listen, adapt, and engage with this new mindset will not only weather the uncertainty ahead, but lead the next chapter of growth.”
“The future of luxury is experiences, Global Blue reports” courtesy of Jamie Wong from thepeakmagazine.com.sg (April 2025). © 2025 The Peak Magazine. All rights reserved.