Affluent Sick and Tired of Frugal Living
Luxury consumer brands and the retailers that
sell them were among the hardest hit during the economic downturn. But,
now that the economy is slowly picking up there are signs that affluent
consumers and those who aspire to shop like them are going back to a whole
host of upscale specialty and department stores — and not just their outlets.
Neiman Marcus, Saks and Tiffany are among those who posted sales gains that
exceeded most analysts’ expectations. Tiffany raised its outlook for
the quarter after seeing a 17 percent year-over-year jump. Luxury merchants,
like others in less affluent climbs, reduced inventory and focused on having
products that were high on consumers’ shopping lists.
"People are sick of
frugality and tired of holding back," Milton Pedraza, CEO, the Luxury Institute,
"People are starting to open their minds to luxury again. Last year, it was
a case of them not wanting to look like a conspicuous consumer. Now it’s
[a case of consumers] buying the best because the best lasts and has value."
research from the Luxury Institute found luxury product consumers are increasingly
going online in search of the bargains. Seventy-eight percent of luxury consumers
who shopped online did so to get the best deal while 77 percent did so to
compare brands or find a specific merchant’s site. These shoppers performed
an average of 14 daily searches, and 89 percent report having made a purchase
directly related to a search.
Questions: Are consumers getting sick of being frugal? Do you think concerns
about the appearance of conspicuous consumption are driving more luxury product
consumers to shop online? What are the keys to luxury retailing success online
and in stores at the present time?