Campaign ran an article recently called 'luxury returns to its routes'. It was a short article detailing the views of senior exec’s from some the
- The days of extravagant, drop of the hat purchases are gone
- Consumers still have disposable income, they are just more careful about how they spend it.
- People want luxury products that offer more, namely longevity, craftsmanship and greater service levels in store and online
- Luxury brands need to understand their clients more
- Brands need to go back to their routes – fantastic products, great service
- Tiffany and Astley Clarke now offer personal shoppers you can call while shopping online
- The new FT howtospendit.com website that has been very successful during the recession. Essentially it is a good looking website that covers all things luxury.
If you look at that list, you will notice that the points are not new to us. In a recession you need to give people both more rational and emotional reasons to buy luxury goods. There is more to it than the short article touches on though. For example, I spoke to a guy who works for a very upmarket car brand this week and they mentioned the fact that during a recession people get more concerned with the way they are perceived by their friends. In effect, if your neighbour has lost his job then ‘keeping up with the Joneses’ starts to go in to reverse. You think twice about buying that £150k car as you worry you might be rubbing their misfortune in their face.
It’s an interesting paradox that parallels other theories on human behaviour, such as the herd perspective written about by Mark Earls. Mark argues that our decisions are not made independently; they are shaped by our social groups. A recent Wired US article had an interesting article on this that addressed the question of whether or not Madonna’s success was due to talent or luck. The article was titled ‘How group think rules what we like’ and highlights how a poor song can be rated highly by people, simply if they see that other people have rated it highly before them. Cheryl Cole’s success is a case in point!
The article concludes that marketing and false word of mouth can indeed drive initial success, but in the long run, quality will start to rise back up. This thought explains why a blockbuster movie that has huge budgets put behind it can have a big opening weekend, but if the film is poor, it will quickly die a death.