Why Luxury Brands are Betting Big on Experiential Marketing in 2025

“Experiential marketing, also known as engagement marketing, is a brand activation technique that involves creating real-world, interactive experiences, both online or in person, to engage a target audience.”

Over the last few years at Lighthouse Studio we have seen a huge demand in experiential activations for luxury brands, as they seek more effective marketing strategies to create hype around their campaigns, products and brand messaging.

Find out more about our experiential activations here.

With the global luxury market forecast to grow by 27.8% by 2028 to £200.7bn, marketing budgets are also expected to expand, with 60% of marketing teams for luxury brands looking to apportion a higher percentage of their budget to experiential activations in 2025.

So who are their target audience and why has experiential become so important for them? 

By 2030, Gen Z will account for 25-30% of luxury market purchases, and millennials for 50-55%. As a result of this shift in target consumer, social media engagement is set to become an even more valuable element in luxury marketing strategies moving forwards; 98% of Gen Z have an active social media account and over 75% of them rely on social media when making purchasing decisions.  

Experiential activations have been proven to increase engagement, with interactive content experiences, both online and in person, 4-5 times more likely to be shared on social media than their static equivalent. For this reason, luxury brands are embracing experiential marketing in order to boost user generated content, social media reach and brand advocacy for their new target audience.

How does experiential marketing create a feeling of exclusivity for luxury brands?

Luxury brands pride themselves on being forward thinking, leading the creative charge not just with their designs but with unique marketing campaigns. The more exciting and different a marketing experience is, the more likely it is to go viral and create the right kind of buzz online.

'85% of Luxury brands believe that experiential marketing is essential for creating a sense of exclusivity and engaging their discerning clientele.’

The more hype there is around a brand experience, the more in demand it will become, enhancing the sense of exclusivity for those that are given access. For our recent activation with PRADA , their most valued customers were invited to the launch of their 2023 Privatesphere holiday campaign in both Selfridges and Harrods stores in London.   

For the exclusive event, we developed a sleek, minimalist interactive content experience with custom AI background, using the Privatesphere imaging. The activation allowed guests to create their own personalised Prada holiday GIF video that was instantly available for them to share online, enhancing the sense of exclusivity around the launch whilst also increasing the social reach of the campaign online. Find out more about the activation here.

Why experiential marketing is the luxury industry's best bet for building brand loyalty

“65% of consumers are more likely to become loyal customers after attending an experiential marketing event”

Luxury brands especially, need to inspire and maintain brand loyalty. By providing new and exciting brand experiences as part of their marketing campaigns, both exclusive and open to the public, they can encourage new customers to join the brand family and existing customers to keep coming back. 

Experiential activations allow customers to interact directly with a brand’s product or message, whether it’s in person or online, helping to build stronger connections between a brand and their audience. By offering exclusive experiences that are shared on social media, a brand can showcase the luxury of their products not just by the price tag, but by the hype and demand surrounding them; exclusivity and luxury go hand in hand.

What are some inspiring examples of Experiential Activations for Luxury brands?

Experiential activations can vary from online immersive experiences like Gucci 's VAULT metaverse, to physical immersive experiences like CHANEL 's Coco Games Centre arcades in Japan and Korea. Creative product booths are also a popular luxury brand experience, for example Rhode’s Makeup Dispenser pop up booth that went viral last summer in London, with guests queuing in their hundreds down the street to try and get to the booth before the gifted products ran out. Consumers who made it in could capture their photo and join the exclusive online community sharing their Rhode booth content online.   

Experiential activations can also bridge the digital and physical worlds, like Louis Vuitton ’s campaign for their 2023 collaboration with the artist Yayoi Kusama. Louis Vuitton developed a custom AR digital experience, using Snap AR ’s Landmarker lenses, that allowed users to place digital overlays of the artist’s famous ‘dots’ onto architectural landmarks such as the Eiffel Tower, the Statue of Liberty and Tower Bridge, all on their smartphones. This digital element of the marketing campaign mimicked the physical experiences and installations at their stores, creating a strong visual narrative for the product launch.

As an experiential tech company, we have had the privilege of working behind the scenes on some incredible campaigns and activations with luxury brands such as Prada Group, Coach, Dermalogica and many more. 

Our recent activation for Alo Yoga x Vogue as part of London Fashion Week integrated our aura photo technology to create an immersive Aura Experience at their London Regent Street store. Guests were invited to the exclusive LFW event where they were able to try the Aura Experience and have their unique image captured, as well as a personalised reading. 

They then received both a physical print of their aura image and a digital copy that was instantly shareable, showing both the brand and event logos on the custom frame. Almost all of the guests had their aura captured with over half of them sharing their aura image online to a combined reach of over 6 million.

And brands are not only embracing experiential technology at events and activations, they are also integrating these technologies into their stores and sales experiences; Valentino became one of the first luxury brands to use AR try on tech, allowing customers to visually try their products on using the AR filters on their app.

Porsche AG are another luxury brand using experiential tech, now offering a Virtual Reality car viewing and test drive so that prospective buyers can get a feel for the car and take a look inside their luxury vehicles, getting an in depth look at all of the interior details.

Experiential activations are proving time and again that they are the powerhouses for luxury brand marketing, creating massive engagement online, expanding social reach and exposure, and boosting brand hype. Experiential is no longer a niche marketing choice for brands, but an essential part of their marketing strategy.

Find out more about what we offer at Lighthouse Studio and our experiential activations here.