Luxury is about to have its McDonald’s moment

June 16, 2025

Jason Knight is CSO and cofounder of Luckybeard

Warren Buffett once said, “Only when the tide goes out do you discover who’s been swimming naked.”

And there’s a sense that luxury is about to head into dangerous waters.

For half a century, luxury brands have relied on three quiet assumptions: a price tag was, in a way, its own justification, limited supply was directly correlated to status, and a well-crafted story could mask any awkward facts about cost or sourcing.

Those days are ending. Tariffs are forcing some significant price hikes, AI is arming consumers with forensic insight, and social platforms are broadcasting every factory gate and margin line.

Of course, the industry has been here before, but there is a sense that this is its McDonald’s moment. Like the fast food giant did over a decade ago, luxury needs to rebuild trust, be truthful and hold itself accountable.

It’s time to get honest.

It sounds painful, and against the “model” of mystique that has been central to the appeal of luxury. But it is difficult to be mysterious when people are not just having a peek behind the curtain, but getting hold of a backstage pass.

The worry? What’s behind the curtain might not hold up to scrutiny.

The Unseen Cost of Scarcity
Luxury used to mean expensive, and scarcity was part of the appeal. You paid more because others couldn’t. And behind the price tag was the promise of craftsmanship, of heritage, of something timeless.

But now, the mechanics behind the markup are being exposed. Tariffs have forced prices even higher, pushing items past a psychological point of no return. When a £3,000 handbag becomes a 4,500-euro one overnight, customers are going to be asking the question: What is the actual value?

Where money is no object, the expense just adds to the appeal. But aside from the insulated few, people still want a sense of value from their purchases. For those whose luxury purchases are infrequent, more of a treat, then price spikes are going to cause them to pause, and in many cases, lead them to shop elsewhere.

But it isn’t just the increase in cost that is causing this hesitation, but rather the awareness. The price has nudged them into thinking more about the transaction. They start doing the maths, they start questioning it, they start to see through the mystique.

That’s concerning for luxury. Because that means the old model isn’t working like it used to. Eyes have been opened, and it’s happening in real time thanks to technology that is at the consumers’ fingertips.

Proof Over Prestige
AI shopping assistants, TikTok teardown videos, Reddit exposés. Consumers are decoding value faster than luxury brands can keep up.

Research is also leaving no stone unturned. Luxury could once hide behind the mystery, the style, the brand story and the price. Now, thanks to better search and the rise of AI, there is nowhere to hide.

Customers know where things are made. They can compare materials. They can find near-identical items for a fraction of the price, often from the very same factories.

That means luxury brands cannot afford to be opaque. Because they will be caught out. If it looks like brands are hiding something, then for a savvy buyer, they definitely are.

Brands must put their best foot forward while being entirely truthful. No spin, no vagueness, and no lies. Be ready to be held to account, and be prepared not to fall back into old habits of ducking and diving. It’s about treating the supply chain like a résumé, ensuring that every line is tight and won’t buckle under scrutiny.

Younger consumers, especially, are also becoming fluent in branding. They understand storytelling, and they’re tired of paying premiums for ideas that don’t hold up under pressure.

They want proof. They want to know who made it, how it was made, and what justifies the price beyond a logo or a legacy. It’s all about substance over status.

Radical transparency has become an expectation. And if entry-level brands, such as Everlane, can open up about cost and sourcing, then what excuse does a house charging five figures have?

Experience Is the New Craft
So, where does that leave the idea of luxury?

The product alone can’t do it anymore. Instead, it lives in the experience. And already, some of the biggest names are seeing this as the future.

Gucci’s immersive retail experiences transform storefronts into cultural showcases, tapping into the brand's heritage alongside contemporary art, literature, and culture. This creates a more meaningful shopping experience while still being obviously Gucci.

This doesn’t mean that brands can hide behind experience. Instead, brands can embed truth and transparency within these unforgettable brand experiences.

Take Hermes. The heritage brand is travelling the world, showcasing its craftsmanship, going deep into the materials it uses, its artisanal heritage and its sustainability commitments. It’s an all-revealing tour which opens the doors to the secrets of the trade while giving its customers and fans a true Hermes experience.

Quiet Luxury, Loud Signals
“Flash” no longer signals wealth. Instead, sophistication is about the details: ethical production, traceability, sustainability, scarcity with purpose. Consumers are curating their identity through brands that reflect their values, not just their wallets.

The concept of prestige is also being moulded by recommendation engines powered by AI, peer-driven discovery, rental models, and resale platforms. Brands will need to earn their place in these systems. They need to be designing for the algorithm - feeding the data ecosystems that now referee taste with the ethics, durability and cultural context they reward.

Price tags and legacy alone won’t cut it anymore. Instead, brands must focus on once again building trust through clarity and experience.

Luxury can still command longing, but the currency of belief has changed. Story-telling must become story-proving. Brands that step into that light will define desire for the next decade. Those who cling to secrecy may soon learn, as Buffett hinted, how little they were wearing when the tide finally turns to rip.

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