New McKinsey Study Highlights the Shift in Luxury Consumption

Many of the changes that have been emerging in the luxury market for some time are now also reflected in a recent McKinsey study. More than 2,000 luxury customers in the U.S. and China were surveyed. Among other things, the results show that price and perceived value are being weighed more critically against one another, emotional attachment is gaining importance, the search for products is shifting to new digital channels, and experiences are increasingly competing with traditional luxury goods.

These developments are not entirely new. INSIGHT-LUXURY has also described on several occasions in recent months how information-seeking behavior, purchasing decisions, and expectations regarding luxury are changing. The McKinsey data now provides additional insights into this trend from two of the world’s most important luxury markets.

Since the study covers only the U.S. and China—and these two markets already differ significantly—the question arises: How relevant is this for Germany and Europe? The results cannot be applied on a one-to-one basis. However, many of the underlying trends are also evident here. And for European brands operating in the U.S. or China, the findings apply to their own customers anyway.

The price needs an explanation again

A high price alone does not create high perceived value.

McKinsey notes that customers are scrutinizing more closely whether quality, design, innovation, and service are keeping pace with price trends. This is particularly relevant for watches and jewelry. Both categories have seen significant price increases in recent years, while at the same time comparability and transparency have improved.

With a mechanical watch, the price can be justified by factors such as a self-contained movement, elaborate finishing, technical features, or long-term service. With jewelry, it comes down to the quality of the materials, the design, the craftsmanship, and the skill of the artisan.

That doesn’t mean luxury has to become cheaper. But the price needs to be justified in a way that makes sense.

The latest INSIGHT Business Market Monitor – Global also indicated a more selective luxury market. McKinsey’s study complements this observation by adding the customer’s perspective: desirability does not automatically stem from price and brand name alone.

Status remains important—but it’s no longer enough

According to the McKinsey survey, the emotional connection to a brand is becoming more important than traditional status symbols. Products are expected to align more closely with people’s own interests, experiences, and personalities.

This is a good starting point for watches and jewelry. Both categories inherently have an emotional appeal.

A watch can take on significance through its technology, design, contemporary history, motorsports, or a specific location. Jewelry is tied to personal events, relationships, and memories.

What matters most is that this connection is made clear through the product itself. A historical archive alone does not create a sense of connection. Origin becomes relevant when it explains why a watch or piece of jewelry looks and is crafted exactly as it does today.

What’s interesting here are the differences between the markets: In the U.S., younger or disruptive brands sometimes fare particularly well when it comes to brand identification. In China, on the other hand, established brands continue to enjoy advantages in terms of brand awareness, trust, and authority.

So there is no single recipe for global success.

Experiences Compete with Possessions

McKinsey reports a strong preference for travel and other experiences in the U.S. and China. A potential watch or jewelry purchase therefore competes not only with other luxury products; the available budget may also be spent on a special trip, dining, or other personal experiences.

For brands and retailers, this doesn’t mean they have to turn every sale into an event. But the purchase itself can be more than just the simple handover of a product.

Visits to manufacturing facilities, encounters with watchmakers or designers, personalized consultations, or workshop discussions create a context that a product alone cannot always provide.

The Eppli Haus in Stuttgart, which INSIGHT-LUXURY visited, is a prime example of how retail, expertise, workshops, and pre-owned goods can be combined to create such an experience.

Especially when a large portion of the research is already done digitally, personal contact can become all the more important when it comes to making the final decision.

Exclusivity takes many forms

Exclusivity, too, can no longer be explained solely by small production runs.

McKinsey shows how differently customers interpret these concepts. In the U.S., for example, early access, limited-edition products, or special membership benefits play a greater role. In China, exclusivity is more strongly associated with personalized service, private appointments, and trusted advisors.

A limited-edition product is therefore not automatically desirable simply because there is a number on the case or certificate. What matters is whether the limited availability, access, or personalized service actually add value.

Smaller independent brands, in particular, can benefit from this because it is often easier to establish direct contact with designers, founders, or watchmakers. However, this does not imply a general advantage over large brands—the markets differ too greatly in this regard as well.

The first point of contact is increasingly taking place outside the brand

The McKinsey study provides particularly clear confirmation of a trend that INSIGHT-LUXURY had already examined in its article “The Watch and Jewelry Industry Caught Between New Information Channels.”

More and more often, the journey toward a product doesn’t begin on a brand’s website or in a boutique.

Customers gather information through search engines, social media, trade publications, online communities, resale platforms, and, increasingly, AI systems. Prices, technical specifications, alternatives, and other buyers’ experiences are often reviewed before direct contact with the brand is established.

In doing so, brands relinquish some control over the first impression.

This makes it all the more important that references, materials, technical specifications, origin, and services are described clearly and in a way that is easy to understand. Generic campaign copy is of little help here. Concrete information and compelling stories, on the other hand, increase the likelihood that a product will be properly understood even outside of a company’s own channels.

AI is changing preparation more than anything else

Differences between markets are also evident when it comes to the use of AI.

In the U.S., it is used more for inspiration and preliminary selection, while in China it is used more for practical matters such as specifications and quality comparisons.

For watches and jewelry, therefore, its significance is likely to lie primarily in the stage leading up to the actual purchase decision. AI can compare models, explain technical differences, or help narrow down options.

That is no substitute for the experience of wearing a watch on your wrist or a piece of jewelry against your skin—nor is it a substitute for expertise, discretion, and personal judgment.

Technology and personalized advice do not have to compete with each other. They can each play different roles in the same customer journey.

Resale has long been more than just an affordable way to get started

McKinsey also confirms a trend in the secondary market that has long been evident in the watch industry.

Resale isn’t just used by buyers looking for a more affordable way to purchase luxury items. Experienced customers, in particular, are interested in rare, historic, or discontinued items.

When it comes to watches, condition, authenticity, provenance, and service history are playing an increasingly important role.

The latest EveryWatch data, which INSIGHT-LUXURY analyzed in early August, illustrates just how significant the secondary market has become. Chrono24’s review of the pre-owned watch market in 2025 had already shown that, following several years of speculation, the market is shifting more toward stability and collector interest.

For brands, the relationship with the product does not end with the initial sale. Service, repairability, documentation, and authentication all influence its long-term value—regardless of who sells it later.

Which of these apply to Europe?

Caution is called for here.

McKinsey’s data does not come from Germany or other European markets. Differences in income, retail structures, market conditions, brand loyalty, digital behavior, and the importance of specialty retailers can be significant. The percentages in the study therefore cannot be applied to other markets.

The underlying questions, however, are worth considering: How transparent is the price? Where do customers get their information? What role do advice and service play? What creates exclusivity? And is owning a luxury product increasingly competing with other forms of luxury?

Furthermore, for European companies that sell in the U.S. or China, these findings are directly relevant. Above all, they show that expectations regarding luxury can vary significantly even between two major international markets.

McKinsey does not, therefore, provide any European insights. However, the study reinforces several trends that have also become apparent in European market data and in INSIGHT-LUXURY’s coverage to date.

The industry’s strengths remain

For the watch and jewelry industry, this shift does not mean a departure from the industry’s traditional strengths.

Craftsmanship, quality, design, origin, durability, and personalized advice are not losing their importance. Quite the contrary.

However, their value must be explained in more concrete terms, communicated earlier, and made understandable across a wider range of touchpoints.

Perhaps this is the most important finding of the McKinsey study: luxury is not losing its appeal. But desirability is becoming increasingly difficult to create based solely on price, brand recognition, or scarcity.

For watches and jewelry in particular, this is both a challenge and an opportunity.

This classification is based on McKinsey’s article “Consumers Are Evolving. Will Brands Evolve With Them?” dated July 19, 2026, as well as the report “The State of Luxury: What U.S. and Chinese Clients Reveal About the Sector’s Future.”