Then and Now: Luxury Spending
The rest of the world seems to be in trouble and still feeling the after shocks of the global economic meltdown as we slowly climb out of it, but how is the other (better off) half going?
When it comes to the folks who are used to splashing out on $20,000 watches, $3000 handbags and $500 haircuts all in a day’s leisurely shop, how have their spending patters changed after the economic crisis?
When the news hit the airwaves, a woman in Hong Kong chauffeured by her white-gloved driver was dropped off her Rolls Royce to second hand shop specializing in the sale of pre-loved luxury handbags. She dumped 10 Hermes Birkin bags valued at $20,000 – $50,000 each — everyone unused and still in their original packaging and carry bags.
Did she need the money or was now a good time in the second hand market to sell the bags?
In 2008 and 2009, despite the economic climate and people being more careful with their money, LMVH saw a surprising growth in the purchase of Louis Vuitton bags.
Why??
As a whole, the luxury goods industry has seen sales dip, but Louis Vuitton has held strong onto their sales. What’s happening is during fruitful times of the economy, people purchase fashionable and in vogue luxury goods from shigh fashion brands and labels — making risky and risqué purchases. In less fruitful times, people stick to the brands they know and trust — Louis Vuitton, Gucci, Hermes.
New Luxury Spending Code
Quality over quantity: Consumers are no longer snapping up lesser brand and trendy goods by the truckload, but are going for single items that cost more money from bigger brands and labels.
Exclusive and authentic over aspirations: Consumers with exceptional discretionary incomes want what other can’t have, and they’ll shelf out more money for them and wait for limited editions.
Socially and ecologically responsible spending: Factory worker welfare and raw goods sustainability is very much on the consumer’s mind. If they’re not happy about a way a product is made, they won’t think twice about boycotting the product, or the entire brand.
Quiet and sophisticated: Consumers who’ve got the money don’t need you to know about it. Discreet spending is in, showing off is out — money is still being spend frivolously on luxury, very, very quietly.
Luxury Spending Snapshot
Shoes: Accessibly priced and high quality shoes are selling well. You can pick up a pair for $400- $2000, but if you want a real bargain, look on www.ebay.com
Watches and jewellry: Down, and the first thing to go down when an economy is lagging. If you’ve got the cash to spare and you’ve always wanted one, now’s a good time to look in the second hand market.
Fashion: Down and set to decrease even more. The new trend in acquiring new clothes is ‘swishing’ — trading your old clothes for new clothes in swishing stores, with your friends or organized swishing events.
Cars: Consumers aren’t trading down, but they are holding off a newer model and are being more cautious about spending in this area. But at the end of this year car retailers bringing out new models are expecting to see a high take up and manufacturers are helping retailers by absorbing new vehicle discounts. Will the consumer bite?
When it comes to the things you want, how are you spending your money?
Tell us all about it!
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