Why Scotland's luxury market is still valuable during a cost-of-living crisis

As someone who has worked with luxury businesses in Scotland, this quote resonates with me on many levels.

In times of economic strain, like the cost-of-living crisis we’re currently facing, it might seem counterintuitive to suggest that the luxury market remains valuable. Yet, for those of us familiar with this industry, the value of luxury goods and services has never been about price tags. It’s about quality, heritage, and experience – the very elements that define Scotland’s unique luxury market and keep it resilient, even in challenging times.

This is a market that thrives on craftsmanship, a trait deeply woven into Scotland’s cultural fabric. From whisky distilleries in the Highlands to artisan cashmere mills in the Borders, Scottish luxury businesses aren’t just selling products; they’re preserving heritage, curating experiences, and upholding standards of excellence that stand in stark contrast to the throwaway culture prevalent in other retail sectors. Consumers understand this difference, and for many, the desire for quality and exclusivity only intensifies during economic downturns, when they seek investments that carry meaning and lasting value. Luxury goods fulfil this need by offering a sense of stability and, in a way, escape, leaving a lasting emotional impact that transcends the economic climate.

This isn’t just anecdotal. In the wake of the 2008 financial crisis, the global luxury market faced a brief dip but rebounded rapidly, mainly thanks to the Asia – Pacific region where many embraced luxury brands as markers of status, prestige and quality, helping to soften the impact of economic slowdown in the West. The phenomenon, coined “the lipstick effect,” was related to the purchases of previously considered ‘indulgences’, such as cosmetics and accessories, suggesting that even in tough times, consumers are inclined to purchase small, luxury items to maintain a sense of normalcy. In Scotland, we see similar trends across sectors. For example, luxury property and bespoke tourism continue to attract global interest, even as prices rise elsewhere. The reputation of Scotland’s bespoke experiences and premium products offers a level of prestige that withstands economic cycles.

I’ve witnessed first-hand how luxury brands that emphasise craftsmanship, story, and legacy can withstand economic pressures. When you’re representing a business with roots embedded in heritage, authenticity and purpose, there’s a rare resilience that comes into play. These businesses understand that their clientele values not only the product but also the story, history and commitment to quality, that each purchase embodies. This connection to place and tradition is a unique selling point that, in my opinion, cannot be easily replicated in other sectors – if at all.

So, why is the luxury market still valuable during a cost-of-living crisis? Because these are times when people seek comfort, quality, and connection more than ever. The discerning consumer today is cautious, yes, but not necessarily frugal – they choose to invest in fewer, higher-quality purchases that promise long-term satisfaction. For any business in the luxury sector considering its immediate and future journey, it’s important to remember what made you stand out in the first place - and what continues to set you apart. Scotland has a proud story to tell in the luxury space, and with the right narrative, that story can thrive even in challenging times.

In the end, luxury isn’t about selling what’s unnecessary; it’s about elevating what’s timeless. And Scotland’s luxury market continues to prove its worth, year after year. For me, Aldo Gucci phrased it best, when he said; ‘Quality is remembered long after the price is forgotten’.

Lally Wilks, Director, Grayling Communications