It seems true that you can't please everyone all of the time. The poor luxury industry has been struggling with all odds against it in the recession, weathering the blows of frugality and budget cutbacks. And now that some measures have been taken to ensure the industry's survival, the high-end clientele is calling foul. According to a recent survey by the Luxury Institute, 48 percent of spenders said
luxury products are too accessible and are no longer exclusive; 40
percent believed luxury brands are becoming a commodity, and 52 percent
said luxury brands that also sell products for mass consumers are no
longer luxury brands. If that wasn't bad enough, a large percentage of wealthy consumers believe that the trademark characteristics of luxury products, superior quality and craftsmanship, are being offered worse today than in years past.
And yet—even though the wealthy consumers are upset by the apparent lack of quality in today's luxury market, only 7 percent of the survey takers said they will spend
more on luxury goods and services. 21 percent said they are
likely to spend more on discounted goods and services. And of those actual spenders, 55 percent said they will buy more of what
they need rather than what they want. So what's the problem?! “I think the frugality will continue in luxury spending," said Milton Pedraza, CEO of the Luxury Institute. " It will be a
tough slog, and will be at least another 12 to 24 months before we see
any growth rates in spending."
So how can luxury goods maintain a marketable status without being too accessible and compromising quality? Discounting is seemingly not the way to go. In the Luxury Institute survey, 41 percent said luxury brands that have
their own discount outlets are no longer luxury, and the same
percentage concluded that luxury brands that are heavily discounted are
not truly luxury. But Matt Kaden, associate director of Net Worth Solutions, disagrees. He says that e-commerce sites that sell a discounted luxury brand does not damage the brand's image. “These sites are by invitation only, which leverages off of the social networking trend,” he said.
But for labels that adhere to that stubborn 41 percent, finding ways to reconnect with the customer will be key to keeping their loyalty. Andrew Sacks, president of marketing consultancy Agency Sacks, says contact
between consumers and brands will become even more important as firms
try to retain and grow market share. Sacks tells his companies to go out and hire letter writers to get
that personal connection with consumers, and to cash in on the greater number
of wealthy consumers spending time online. “Use social media," he noted.
"Engage in a real dialogue. Social media is real. Be direct, be human
and show thanks. Companies have to work harder to provide a rational
alibi to purchase. Educate. Make it OK for them to spend money."
Article and Photo Source: WWD