The Luxury Consumer in 2009

The luxury market is changing, everything is changing due to economic instability. Despite tough times though, luxury will not be lost. As stated by Forbes, affluent consumers will continue to spend but spend differently than before and high-end brands have decisions to make.  Top luxury brands have already begun and will continue to offer massive discounts unlike anything seen yet.

Luxury at a discount is everywhere and an oxymoron in itself. Luxury houses that make steep discounts are devaluating the high-end market sector overall, primarily because the "sale buyer" is different than the "high-end client." Thus to the "high-end client" or core customer base, the goods are worth less and lose exclusivity. Spoiled little girls walking around with once exclusive designer bags will only push core customers to look elsewhere. However, it’s a blurry line between discounting too much versus not discounting at all.  Upscale stores have to continue to turn profit or face bankruptcy. Does the designer house, luxury store lock in high prices, as Versace has promised to do; or  do they abandon the affluent client segment for the masses, in the hopes of turning profit now? It seems only time will tell the answer.  One point has thus far been true, in 2009 exclusivity of goods and services will be paramount to the luxury consumer, as will value and loyalty.

"The days of shopping ’til you drop are over," David Lamb, chief strategic officer at diamond house De Beers has said. Along with London-based market research firm Ledbury Research, it has been determined that the high-end, luxury consumer is definitely changing with the harsh times. Demand for socially and ecologically conscious goods is growing. People recognize "green washing" when they see it, which is when a company overstates or misrepresents its environmental commitment. Luxury consumers know more about ethical practices, manufacturing and production then ever before. The ultra rich have tightened up but will still spend if cultivated. The bottom line is that luxe consumers want to hold onto their exclusivity and high class principles. They expect to get more bang for their buck, and absolutely expect to get what they pay for. What are your thoughts on spending in 2009?