The Wall Street Journal’s Wealth Blog recently posted about how true luxury — “goods that are rare, expertly made and sold to a select few” — is on the rise in spite of the recession. The wealthy seem to appreciate the exclusivity of luxury, and the economic climate has widened the gap between those who can afford to spend on true luxury and those who can’t. In a recent survey of private jet owners, 94% defined luxury as ‘for one’s self’ rather than for the masses. This is in line with my my thinking, that luxury depends on how the individual interprets it.

While I didn’t have the chance to research this for my PhD, my feeling is that Lambda personalities are the early birds and will be the early majority to start spending on luxury again. I hope to have the opportunity to research in the future whether the purchasing cycle from early birds to late comers follows from Lambda to Theta. My colleague Randy has observed that Lambdas tend to spend more than Thetas on similar offers. Theta buyers buy smaller diamonds, for example.

We are now seeing Lambda consumers interested in bespoke (and more expensive) purchases while Thetas will potentially follow later. This could be explained by the yearning of the Lambda for novelty while Theta look for social affiliation so the society has to be created first so they can join it.

It seems that the economic crisis has put many luxury shoppers into a state of shock. We can’t forget that luxury is what makes us human: it allows us to choose. People learned quickly how to overcome this shock.
Lambdas have already started but Theta will follow. Thus all the claims that the cheaper stuff is out is premature. People will go back to Burberry but it will take some time since the more expensive things will be sold first. However, if we talk about an economic recovery in 2010, luxury recovery will start earlier, maybe in 2009.