very retailer should be paying very close attention to what’s happening in this sector today. It’s not because luxury is struggling – every category experiences cycles – but because luxury consumers are beginning to question value in a category that has spent decades defining it. Over the past few years, the conversation has been dominated by quite familiar explanations. Luxury brands pushed prices too far, economic uncertainty has changed spending habits, younger consumers value experiences over possessions, and heritage isn’t carrying the same weight it once did. There is truth in all of those observations, but I don’t think any of them explain the bigger shift. What I think luxury is exposing is something far more relevant to every retailer. It is reminding us that emotion cannot be added to an experience; it has to, and can only, emerge from it. Recent research supports this view. McKinsey’s latest State of Luxury report found that emotional connection has become a more important driver of purchase than heritage alone, while Bain & Company has reported that years of growth driven largely by price increases are giving way to consumers who question value much more critically. At the same time, affluent consumers continue to direct more of their discretionary spending towards experiences, particularly travel and hospitality, rather than simply acquiring more products. Most commentary concludes that luxury needs to become more emotional. I think that conclusion risks missing what is actually happening, though. Emotion is not something brands manufacture. It is something customers experience when every part of an interaction feels intentional. Now, that might sound like a subtle distinction, but it fundamentally changes the way we think about retail. Just think about Hermès for a moment. People often explain the Birkin’s success through craftsmanship, scarcity, or exclusivity, and those elements certainly matter, but they are only part of the story. The anticipation, the relationship built with the boutique, and the sense that ownership has been earned rather than simply purchased all contribute to the value customers attach to the product. By the time someone finally walks out of the store with a Birkin, the emotional experience has been building for months, sometimes even years. The leather is exceptional, but the experience surrounding it is what transforms the product into something people remember. Then we see the same principle in a very different way at Apple. That first interaction with an iPhone is rarely the screen; it’s the box. Apple has spent years refining packaging, sequencing and presentation because it understands that the product experience begins long before the device is switched on. That slow release of the lid, the simplicity of the presentation, and the absence of any unnecessary clutter all communicate care and confidence. The funny thing is, customers rarely leave talking about the packaging itself. They leave with the feeling that every detail mattered, and that feeling becomes part of how they value the product. Then consider Aman, a brand that, in my opinion, has redefined luxury hospitality. Aman properties are not memorable because they overwhelm guests with attention; if anything, it’s quite the opposite. They are memorable because every interaction feels considered. Staff know when to engage and when to step back, and spaces are designed to foster calm rather than spectacle. Luxury, in this context, comes from restraint as much as it does from service. Three completely different brands. Three completely different sectors. One consistent principle. None of them is attempting to create emotion directly. They make thousands of deliberate, intentional decisions that allow the right emotion to emerge naturally. This is where I think luxury offers an important lesson for every retailer, and it is something I have focused on throughout my career. For years, the sense of “premium” was created through things that were difficult to access. Exceptional craftsmanship, prestigious locations, remarkable service and beautifully designed stores all created a genuine competitive advantage because very few brands could deliver them consistently. That is no longer the environment we operate in. Beautiful stores can be replicated, technology has made personalisation more accessible, AI is rapidly democratising creativity, content and execution, and operational excellence, while still essential, is becoming an expectation rather than a point of difference. As these capabilities become more widely available, retailers face a different challenge. How do you create value when everyone has access to similar tools? I think the answer lies less in what customers see and more in what they feel. This isn’t because emotion has suddenly become fashionable. It’s because emotion is often the evidence that thoughtful decisions have been made throughout the customer journey. Customers don’t analyse every design choice, service interaction or operational decision. They simply experience the outcome. They leave with a sense that something felt effortless, meaningful or memorable without necessarily being able to explain why. Those moments are rarely accidental and are usually the result of hundreds of small decisions made with remarkable discipline. That is why I believe judgment is becoming one of retail’s most valuable competitive advantages. Not judgment in the sense of instinct alone, but the ability to know what deserves attention, what should be removed, where anticipation should be built, and where simplicity creates greater value than complexity. The challenge, at the same time, is that we are outsourcing this judgment to AI faster than we are stopping to decide whether that was even the right decision in the first place. The brands that continue to command premium pricing are rarely those doing the most. More often, they are the brands that know exactly what not to do. Luxury is simply the first category revealing this shift because consumers there have always had the highest expectations, and when expectations change at the top end of the market, the rest of retail would be very wise to pay attention. Let’s be clear, though. The lesson isn’t that every retailer needs to become a luxury brand. It is that every retailer needs to understand where value is increasingly being created. Products still matter. Craftsmanship still matters. Heritage still matters. But they are, unfortunately, becoming the starting point rather than the finish line. The next decade won’t be won by those who think experiences are remembered only for one dramatic moment. It’s going to be won by those who remember that they happen because every decision behind them works together to create something that feels considered, intentional, distinctive and ultimately worth remembering. Luxury isn’t asking the rest of retail to become more emotional. It’s reminding us that emotion has never been the strategy. It’s the outcome of getting everything else right. Nick Gray is the Founder and CEO of IGU Global, a Sydney-based retail and brand strategy consultancy. Further reading: What is Nike really selling with its Virgil Abloh drop?