Luxury Unfiltered: The luxury market will lose the middle ground in 2026

December 10, 2025

Daniel Langer is the founder and CEO of consulting firm Équité

The luxury industry is currently holding its breath.

After a year of normalization in 2024 and a struggle for direction in 2025 many executives I speak with are hoping for a return to the easy growth of the post-pandemic boom. They are waiting for the tide to turn.

I have a difficult message for them.

The value deficit is the new crisis
The tide is not coming back.

We are entering a new era I call the Great Separation. In 2026 we will see a brutal bifurcation in the market.

The middle ground is collapsing. Brands that continue to rely on heritage alone or play it safe will find themselves irrelevant.

The winners will be those who understand that the rules of the game have fundamentally changed. Survival now requires a shift from managing excellence to creating extreme value.

We must address the elephant in the room.

Over the last three years luxury brands have increased prices aggressively. In many sectors prices are up 30 or 40 percent.

I observe the consequences of this continuously in my strategy projects and masterclasses around the world. When I audit brands across categories from hospitality to fashion I rarely see a corresponding increase in the experience.

The product is the same, the service is often worse and the store environment is identical. Clients are starting to feel the disconnect.

They are not unwilling to spend but they are unwilling to be taken for granted. Importantly, this is not a pricing problem.

It is a value creation problem. When the price goes up the perceived value must go up disproportionately.

If you charge a premium you must deliver an extreme difference. In 2026 the brands that will win are those that obsess over the intangible value they provide.

They will stop selling products and start selling transformation. If your client does not feel a significant shift in their emotional state after interacting with your brand you have failed.

The price-value equation has to be recalibrated immediately.

The human touch as the ultimate luxury
This leads to the most critical operational shift we need to see next year. For decades the industry has trained staff to follow a script.

We created processes to ensure consistency. But in an age where artificial intelligence can handle almost any transactional task the role of the human has changed.

The era of the order taker is over. The new luxury requires a different caliber of professional.

We are asking our teams to perform at a level that goes far beyond service. They need the empathy to read a room instantly.

They need the cultural intelligence to navigate complex nuances with a global clientele. They need to be masters of improvisation.

Crucially, this requires stamina and focus. Emotional labor is exhausting.

You cannot deliver exceptional experiences if you are burnt out or unprepared. We need to treat our client-facing teams with the same seriousness as elite performers.

They cannot afford to have an off day. They must be "on" from the moment they step onto the floor.

This requires a complete overhaul of how we hire and train. Most luxury training today is technical.

It teaches scripts. That is obsolete. In 2026 training must be transformational.

We need to teach staff the psychology of luxury and equip them with the resilience to deliver pure emotion. I have witnessed the dramatic economic impact when teams unlock their personal potential through this depth of preparation.

In a recent global project, we shifted from a standard workshop model to a multi-month journey of coaching and real-life implementation. The results were transformative.

The brands that invest here will see a direct impact on their bottom line.

The end of the sea of sameness
Finally, we must talk about the aesthetic of luxury. For too long we have been drowning in a sea of sameness.

The trend of quiet luxury was often just an excuse for boring product and safe marketing. Stores look the same.

Instagram feeds look the same. Campaigns look the same.

Safety is the riskiest strategy of all. In a noisy world blending in is a death sentence.

Hence, 2026 will reward the bold. We need to see a return to creativity and radical differentiation.

A brand must have a distinct story that is told with conviction. If you remove your logo and the client cannot identify the content as yours you have a problem.

The luxury clients of tomorrow are Gen Z and eventually Gen Alpha: they do not buy safety. They buy identity.

The verdict
The year ahead will be unforgiving to those who stand still. The rising tide that lifted all boats is gone.

Now we are in a zero-sum game. Every dollar of growth you achieve in 2026 must be taken from a competitor who is less prepared, less agile and less emotionally connected.

This is a wake-up call. The strategies that got us here are insufficient for where we are going.

It is time to stop managing the past and start leading the future. The separation has already begun.

Which side of the divide will you be on?

Luxury Unfiltered is a weekly column by Daniel Langer. He is the CEO of Équité, a global luxury strategy and creative brand activation firm, where he is the advisor to some of the most iconic luxury brands. He is recognized as a global top-five luxury key opinion leader. He serves as the executive professor of luxury strategy and pricing at Pepperdine University in Malibu and as a professor of luxury at New York University, New York. Dr. Langer has authored best-selling books on luxury management in English and Chinese and is a respected global keynote speaker.

Dr. Langer conducts masterclass management training on various luxury topics around the world. As a luxury expert featured on Bloomberg TV, Financial Times, The New York Times, Forbes, The Economist and others, Mr. Langer holds an MBA and a Ph.D. in luxury management and has received education from Harvard Business School. Follow him on LinkedIn and Instagram, and listen to his Future of Luxury Podcast.

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Luxury Unfiltered: The luxury market will lose the middle ground in 2026

Luxury Unfiltered: The luxury market will lose the middle ground in 2026

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