What: While the number of luxury shops around the world has remained fairly stable, the shape and size of stores has changed dramatically.

Why it is important: Luxury stores have to be transformed into unique and meaningful places, linked to the brand’s roots to make a space that is memorable and becomes a destination for customers.

Luxury retail is concentrated in 25 major cities with Tokyo, Seoul, Paris, Hong Kong, and New York City being at the top of the list.

New stores such as Dior’s flagship on Avenue Montaigne are designed to be destinations and retain customers as long as possible. The store aims to attract everyone and caters to a visitor who will only buy a coffee to a customer who will treat themselves to a suite.

While these new points of sale require a hefty investment, the megastores are proving to be highly profitable with high margins and sales reaching hundreds of millions of euros. These stores have gone beyond retail space and become attractions.

Additionally, initiatives such as pop-ups, VIP lounges, fashion shows, travelling exhibitions and more, have enabled the luxury industry to increase its sales per square meter.

As the race for gigantism continues, it becomes more difficult for smaller labels to compete with the larger luxury companies. The luxury market is increasingly oligopolistic as Louis Vuitton, Dior, Chanel, and Hermés are in a league of their own.

Luxury: ever-larger shops for ever-stronger brands