Bernstein analyst Luca Solca emphasizes that the luxury market faces a downturn, yet predicts a tailwind due to societal trends where young people resort to luxury goods to combat feelings of inadequacy fueled by social media.
In the report, it states, "The kids aren't alright, and luxury goods can help them feel better... For some, luxury brands can help with a rising feeling of inadequacy associated with higher public exposure by promising to morph you into your ideal self."
Solca explains that increased online engagement is degrading self-esteem among users, suggesting that these conditions, albeit not solely attributed to social media, bolster the demand for luxury goods as coping mechanisms.
The Bernstein team views societal trends, particularly the emotional impacts of social media, as beneficial for the luxury industry in the long run, despite the industry's current stagnation.
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