Digital and hybrid luxury shopping grow, reflecting changing consumer behaviors and expectations for exclusivity
Luxury is changing hands. For the first time since the global financial crisis, the world's high-end shoppers have begun to show more restraint. In the first half of 2025, luxury spending declined across major cities such as London, Paris, Singapore, and New York, with Dubai as the only city maintaining luxury spending momentum. Yet beneath this global slowdown lies a deeper shift, as the market for premium goods is widening, reaching far beyond the ultra-rich.
Visa's latest Global Economic Insight report shows that while fewer people bought luxury items in the first half of 2025, the base of consumers engaging with high-end brands is now remarkably broad. Across major cities, from London and Paris to Singapore and New York, shoppers in the top 5 percent, 10 percent, and even 20 percent of spenders are indulging in high-end purchases, joined by a growing crowd of aspirational middle-class shoppers. In Dubai, one in nine residents makes a luxury purchase each quarter, an impressive share underpinned by one of the world's highest concentrations of affluent households.
This broadening of luxury's audience is redefining what exclusivity means. Luxury has long been associated with rarity and wealth. Today, it is increasingly about access and experience. Middle- and upper-income consumers see premium goods as a form of achievement and self-expression. As this group grows, luxury's momentum is being driven less by how much individuals spend and more by new buyers entering the market.
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Digital transformation is amplifying this change. While in-store shopping still dominates, online and blended ('phygital') luxury purchases have surged since 2019. Visa data show that the share of digital and hybrid shopping rose by 10 to 16 percent in London, New York and Dubai over the past five years. This reflects a profound change in consumer behavior: affluent shoppers still value the intimacy of boutiques, but they now expect the same exclusivity in the digital world.
This behavioral shift is unfolding alongside a powerful demographic transition. Over the next five years, more than 300 million new consumers are expected to enter the luxury market, supported by rising incomes and the transfer of wealth from older to younger generations. A projected 20 per cent increase in high-net-worth individuals will further expand the global pool of luxury buyers.
For businesses and financial institutions, this evolution calls for a rethink of who luxury is for and how it is delivered. Four priorities stand out.
The first is reach. Bank issuers should look beyond the ultra-wealthy and customize card products and rewards that appeal to a wider spectrum of luxury shoppers.
The second is data. As the luxury customer base expands, transaction insights can help brands identify emerging luxury buyers and deliver personalized offers to deepen engagement and loyalty. Data can also help businesses develop marketing strategies and products that appeal to aspirational middle-class consumers, such as entry-level luxury items or limited editions, while preserving the exclusivity that defines the sector.
A third priority is innovation through experience. As younger generations drive the next wave of demand, growth will come from immersive and seamless journeys that mirror the personal touch once found only in stores. The brands that invest in digital, connected experiences will be best positioned to capture the loyalty of Gen Z and Gen Alpha. And, lastly, partnerships between luxury brands and payment providers can play a key role in delivering frictionless shopping journeys this audience seeks.
Luxury is entering a new era, shaped by digital access, generational change and the broadening of affluence. The brands and businesses that will capitalize on this shift are those that treat experience as the engine of growth - removing friction, deepening loyalty, and making every interaction count.