The recent uncertainty in the market is leading to much soul searching. Brands are refocusing on the foundational pillars of creativity and craftsmanship, their point of difference and how best to communicate that to their existing and future customers – as well as keeping an eye on the disrupters, whether they be competing brands and/or evolving consumption trends.

When it comes to real estate strategy, the foundational pillar has always been the customer; at a basic level delivering spaces in markets where customers concentrate. Over the last 15 years, the democratisation of luxury has shaped this customer pillar, reflected in the larger brand ‘temples’ the bigger brands have and are creating in a select number of markets.

These are spaces that incorporate food, heritage and cultural experiences to engage with a wider cohort of current and potential future customers. While this strategy has democratisation at its core, it’s also about deepening the relationship with highspending VICs through the creation of dedicated areas and experiences. Dior’s Paris flagship at 30 Montaigne has private spaces for their key clients alongside La Dior Suite – where clients can stay overnight, with unique curated experiences on offer.

Looking to 2025 and beyond, VICs will form a more important pillar in real estate strategies. Democratisation of the luxury store experience will continue and be an important tool for engaging with the customers of the future. But as the recent slowdown has highlighted, high-spending clientele provide an important and solid base for brand performance. BoF and McKinsey forecast that VICs will be central to future performance forecasting and that this customer segment will drive 65 – 80 % of projected growth through to 2027. These considerations will increasingly shape market selection, including hyper-local considerations, and the brand experience within market. These brand engagements will be more localised and not necessarily all in-store, helping to foster deeper and more lasting connections with their VICs.

From a market selection perspective, this evolving strategy will mean a greater spotlight on those markets where wealthy customers concentrate, whether it is where they reside or visit. “These wealth centres never went out of focus, although there are new markets in Asia and the Middle East moving up the agenda” adds Anthony Selwyn, co-head of Savills prime global retail team.