The Price of Prestige: Can Luxury Brands Afford to Ignore Emotional Bonds?

For decades, luxury has been shorthand for heritage, craftsmanship, and prestige. A Chanel bag, a Tiffany necklace, a Cartier watch: these symbols of aspiration carried cultural weight beyond their price tags. But in 2025, our 15th year of measuring brands based on emotions, the rules of engagement are shifting. Luxury brands may no longer be able to rely on legacy or exclusivity alone, and the deeper question is whether luxury can endure without intimacy.

For the first time in our study’s history, the luxury ranks seventh across all industries, a significant leap that underscores the renewed strength of consumer bonds in the category. Chanel leads the category, ranking #1 in luxury and outperforming other major heritage houses. Close behind, Celine (#2) and Yves Saint Laurent (#3) surpassed global giants like Gucci, Louis Vuitton, and Dior, signaling a reshaping of the hierarchy. 

Notable is the dominance of the identity archetype, which reflects an aspirational image or admired values and beliefs that resonate deeply with customers. Luxury is not simply purchased, but rather worn, lived, and reflected back as a mirror of one’s values. Just as telling is the rise in the number of consumers in the fusing stage, the highest level of intimacy by which the brand and consumer are co-identified and become inexorably linked. In luxury, visual signifiers of brands go beyond decoration and become declarations of values.

Affluence is reshaping the American luxury market. According to the Wall Street Journal, 49% of all consumer spending in the U.S. comes from the top 10% of earners, the highest proportion in history¹. This concentration of wealth has created a powerful cohort fueling the category’s momentum. In fact, some projections suggest Americans may soon surpass Chinese consumers as the primary drivers of luxury growth—a reversal of a decade-long trend².

However, the psychology of luxury purchases is evolving. Consumers are buying fewer luxury items and making more considered choices. Impulse has been replaced with scrutiny, as quality, heritage, and durability are no longer assumed³ but appraised. Craftsmanship still matters, but so does the perception of value. Luxury must now prove it earns its price tag.

Our head-to-head comparisons reveal nuance within the sector. Chanel thrives on the identity archetype, a quintessential expression of self through timeless elegance. In contrast, Yves Saint Laurent revels in indulgence, tapping into passion, hedonism, and the thrill of desire. Both succeed in distinctly different ways, reflecting the spectrum of emotional levers that luxury can pull. Coach, meanwhile, offers yet another approach. Ranking #9 overall, leading in the enhancement archetype, and excelling in the bonding stage, Coach outperforms icons like Hermès, Dior, Burberry, and Gucci, despite its more “accessible” positioning.

The forces fueling luxury’s rise also create new vulnerabilities. The U.S. market is bifurcating, because brands must remain relevant to ultra-high-net-worth customers who demand exclusivity and personalization while also cultivating aspirational buyers experiencing economic strain.

At the same time, experiences are eclipsing possessions. Travel, dining, immersive events, and hospitality increasingly carry more emotional weight than handbags or jewelry⁴. The younger affluent are less interested in accumulating objects than in collecting memories; they are willing to splurge, but only if they ascribe real value to a purchase⁵. A dinner at Noma can feel more “luxurious”  than the latest limited-edition timepiece.

While the gloss of prestige remains intact, substance is being questioned. Consumers may be worrying that craftsmanship isn’t what it used to be, that sharp price hikes outpace innovation, and that branding is sometimes more carefully polished than the products themselves. This reality shows in our industry rankings: Louis Vuitton (#17) and Gucci (#13) now sit below smaller or newer houses like Bottega Veneta (#4). Rolex (#25), Cartier (#27), and Tiffany (#26) all rank surprisingly low, despite their iconic status. Prestige can protect for only so long before disappointment erodes intimacy.

Luxury has traditionally mastered through the art of scarcity, subtle marketing, and aloofness, operating more like art than commerce. But in a marketplace where consumers demand not just status but connection, this playbook is incomplete. Our research shows that emotional bonds drive performance and loyalty more than practical factors like price or function. Without Brand Intimacy, prestige risks irrelevance.

The macroeconomic environment further complicates the picture. Inflation, geopolitical uncertainty, and shifting global demand are already pressuring the sector. As luxury consumers grow more price sensitive, aggressive price increases that were once tolerated as part of the game are meeting growing resistance. The veneer of exclusivity can fracture if buyers feel exploited rather than elevated.

Meanwhile, the opportunity is clear. With the wealthy controlling more of America’s spending than ever before, luxury brands are well-positioned to win disproportionate wallet share. But the winners will be those who marry scarcity with sincerity, heritage with humanity, and prestige with intimacy. Archetype leaders like Omega (fulfillment, ritual), Van Cleef & Arpels (nostalgia), and Saint Laurent (indulgence) show the diversity of emotional pathways open to luxury brands and prove that intimacy, not just prestige, is the true currency.

As we build on 15 years of Brand Intimacy research, one truth is unmistakable: the future of luxury will be defined not by legacy but by meaning. Heritage may open the door, but emotional bonds will determine who stays inside.

Can Chanel continue to embody timeless identity while deepening intimacy? Can Coach, with its surprising rise, prove that accessibility and intimacy can coexist? Can Rolex or Hermès reclaim the intimacy slipping to competitors like Bottega Veneta or Saint Laurent?

Luxury is at a crossroads. Those who continue to lean only on price and prestige may hold relevance in the short term but risk hollowing out the very bonds that sustain them. Those who embrace intimacy will not only justify and command higher prices, but will make their brands irresistible.

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Get an overview of Brand Intimacy here.

Read our detailed methodology here. Our Amazon best-selling book is available at all your favorite booksellers. To learn more about how we help clients enhance their consumer bonds, visit mblm.com/services.

¹Mitchell, J., & Rubin, G. (2025, February 2). The U.S. economy’s surprising strength has a lot to do with the rich. The Wall Street Journal. Retrieved from https://www.wsj.com/economy/consumers/us-economy-strength-rich-spending-2c34a571

²Conti, S. (2025, January 30). With China in the doldrums, U.S. will fuel luxury goods sales in 2025. Women’s Wear Daily (WWD). Retrieved from https://wwd.com/business-news/business-features/china-doldrums-us-fuel-luxury-goods-sales-1236845477/ 

³Vogue Business. (2024, October 15). Luxury no longer means quality: Consumers weigh in on the slowdown survey. Retrieved from https://www.voguebusiness.com/story/companies/luxury-no-longer-means-quality-consumers-weigh-in-on-the-slowdown-survey

⁴McKinsey & Company. (2024, December). The state of luxury 2024: A mid-year check-in on the industry. Retrieved from https://www.mckinsey.com/industries/retail/our-insights/state-of-luxury

⁵McKinsey & Company. (2024, December 17). Understanding Gen Z: Consumer behaviors and cultural shifts. McKinsey Insights. Retrieved from https://www.mckinsey.com/~/media/mckinsey/email/genz/2024/12/2024-12-17b.html