When does luxury become a commodity?

Isaac Mostovicz writes that luxury products are at risk of becoming a commodity quicker than ever before ...

A recent article in the Washington Post highlights that when new and exciting high-tech gadgets launch, it isn’t long before the wider market follows and attempts to replicate the sought after product. As industry players join the market, the cost of components goes down and competition intensifies.

As a general rule, increased competition forces companies to improve their offer and quality of product – benefitting the customer. As is identified, the natural evolution of a product means it isn’t long before what is considered luxury becomes a commodity. A process all the more exacerbated by today’s pace of trend and innovation.

For Lambdas who look to differentiate themselves with the luxury they buy, how to stay ahead of the curve is an important consideration. Time must be dedicated to research the ‘next new thing’. By the time a product is popular, it may be considered a commodity; this observation suggests all Lambdas are likely to be ‘early adopters’.

In the early stages of a product’s life cycle, early adopters usually focus on the benefits and new features, leading to weak price elasticity and are happy to pay more money for a product to get it ‘now’.

Ofcom’s fifth International Communications Market report suggests that there are perhaps nations of ‘early adopters’; in the USA, 44 per cent of households have HDTV services with access to 404 HD channels, followed by Japan (43 per cent of households and 130 channels), France (42 per cent and 55 channels) and then the UK (13 per cent and 50 channels).

Japan consistently emerges as a leading nation in adopting emerging technologies, while this is partly down to its heritage and reputation for technological innovation, does this also suggest that such a culture draws synergies with the Lambda personality type?

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