Following up on my last post, here’s Pam Danziger from Unity Marketing discussing the Luxury Consumption Index, trends in the luxury market, and what jewelers can do to capture market share in tough retail conditions:

We’ve seen many a doom-and-gloom story about the economy and the luxury market recently, so here’s one offering a glimmer of hope. Unity Marketing’s latest Luxury Consumption Index showed a slight improvement, meaning that affluent people are starting to feel slightly better about their economic situations. They aren’t necessarily willing to spend again–over 40% of the respondents still said they planned on cutting their spending on luxury over the next 12 months–but nevertheless, any improvement in attitudes toward luxury should be welcomed. People need luxury–it’s a basic human need. They need to find ways to express themselves through it.

Unity Marketing’s chief economist Tom Bodenberg expressed a worry though:

The media’s focus on ‘recession chic’ – personal expression that deliberately excludes luxury goods – may leave a lingering distaste for conspicuous consumption and parading luxury labels.

I disagree–whether something is ‘recession chic’ depends on one’s personal interpretation, and this does not deliberately exclude luxury. Luxury companies that provide true value–financially, emotionally or otherwise–will emerge from the recession stronger than before.

I found this recent article about how luxury retailers are weathering the financial crisis to be very interesting. In three different places, it describes how luxury is shifting in a Theta direction. Let me elaborate:

The author describes a shift to craftsmanship from ‘bling’–appreciating craftsmanship is something that Thetas do. On the other hand, Lambdas believe that nature creates luxury, not craftsmen.

Francois-Henri Pinault, the chairman of French group PPR was quoted as saying, “People want a return to genuine values like timelessness.” Thetas think luxury is timeless, while lambdas think that luxury requires a lot of time.

Suzy Menkes, fashion editor of the International Herald Tribune, said that luxury consumers are looking for designer goods “that can be passed on to the next generation.” This characteristic of luxury holding its value over time is another Theta mark, whereas Lambdas think that luxury holds its meaning over time.

Is the global economic crisis shifting the luxury market towards Theta? I’m not sure–I think there will always be space in the market for Thetas and Lambdas. It just takes different marketing strategies to reach them.