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An organization called the Luxury Institute surveyed high-end shoppers in August, and now AdWeek has published a long, two-part state-of-the-market report based on their findings. The big picture: "Seventy-seven percent of the respondents...agreed that luxury is less important in today's economy." You think?
But some less obvious patterns emerged from the Luxury Institute's data. For one thing, the majority of affluent consumers aren't big luxury shoppers. Pre-recession, the real market power was coming from lower-income aspirational buyers who can't afford to shop anymore. Now that they're gone, brands are going to have to figure out how to sell to the really rich. Who turn out to be picky: Many of the wealthy survey subjects said that they're primarily interested in quality and service, which they categorize as hard to find in luxury goods.
Focusing on quality might be one way that luxury shoppers convince themselves that they're being practical. The survey found that rampant recession discounting has damaged people's perception of brands, even as they shop at sales. "Radical discounting is a disaster," one marketer told AdWeek. "It tells people how big the margins were." But it also thwarts their sense that you get what you pay for—that luxury items are expensive because they're high quality.
Coming out of the Great Recession, AdWeek thinks shoppers are going to be much more discriminating. One expert talks about a "rise of connoisseurship." Of course, it sounds like some of the people surveyed are simply going to emerge exactly as tight-fisted as they went in: Nine percent said they're not planning on spending anything on gifts this holiday season. Then they added "Bah humbug!" and refused their chimney sweep's request for a second helping of gruel.
· Luxe Market Faces Wealth of Challenges [AdWeek]
· Even Luxe Buyers Expect Discounts [AdWeek]