Janus Thinking

There are some fantastic (and sometimes preposterous) items in this ABC News slideshow ‘Expensive Everyday Items for the Rich’—including the $121,106 diamond-studded thong (left) that contains 518 diamonds and weighs 30 carats. Some other items of interest: a diamond-encrusted Hot Wheels car (23,000 diamonds, 23 carats, $140,000), a Scrabble set studded with 30,000 Swarovski crystals worth $20,000, a Frozen Haute Chocolate dessert costing $25,000 at New York’s Serendipity-3, and a Goldvish luxury cellphone made out of 18-carat gold and covered in more than 100 carats of diamonds (worth $1.2 million). See the full set of photos and wonder if we really are entering a recession.

The connoisseurship of water is a topic that’s reared its head before on Janus Thinking, and today I mention it again after spotting this article on ForbesTraveler.com, about the state of the pricey water market.

Michael Mascha, a water connoisseur and author of Fine Waters, believes that bottled water is the next wine, and like wine, it has terroir, a sense of place. He says that waters have a different taste and “mouthfeel,” and though bottled water has become a commodity, it’s actually shifting back towards being “considered a natural product with its own origin.”

On the question of where the best water in the world comes from:

That would be akin to asking where the best wine is coming from. That’s the beauty of what I am talking about… We can have many different waters with many different flavors with many different aspects, and we should really enjoy the differences and the variety and not look for just the best water.

Mascha approaches water like a true connoisseur; I’m still not entirely sure that water is something worthy of connoisseurship (because you can’t tell its provenance solely by tasting it, and it’s freely available at taps everywhere), but I appreciate the attention to detail with which he examines it and the pleasure he obviously gets from it.

Photo by S Baker

While many luxury brands are plastering their logos in more places, fashion house Bottega Veneta continues to offer logo-free designs that are marked by quality, not flash.

This profile of Tomas Maier, Bottega Veneta’s head designer, in the New York Times today provides a great example of how companies can go after a small market of ‘in the know’ quality seekers and be very successful.

Maier doesn’t offer three different sizes of a bag at different price points; he believes that one bag, if it’s of high enough quality, should be good enough. Bottega Veneta uses fabrics and leather of the highest quality and pays attention to details that other clothing and handbag makers might ignore or overlook. From the article:

While other designers were producing dart-free baby-doll dresses as if they were so many Fords, he concentrated on deceptively simple, painstakingly constructed styles priced from about $1,200 to $6,000 for an evening dress. The dressmaker touches — ruching, serpentine seaming, hand-beading and elaborate pleats — are recognizable to a small but informed clientele.

This sort of attention to detail allows people to appreciate luxury in a subtle, more demure way, which could be appealing given the current state of the economy. Said Milton Pedraza of the Luxury Institute:

[Affluent consumers] don’t want to be screaming luxury right now. They don’t want something flashy that everybody else has. They are looking for unique handcrafted things that can’t immediately be reinterpreted at every level of the marketplace.

Read the full article here.

Recently the Financial Times reported on Future Contemporaries, a new group founded by London’s Serpentine Gallery for the purpose of making younger people (under the age of 39) enthusiastic about art (and perhaps interested in becoming benefactors of the Serpentine). For £1000 annually, the Serpentine offers members a contemporary art education programme that it hopes will encourage a lifelong appreciation of art. The group has been to private showings in artists’ studios and has had personal tours by artists in private gallery settings. A membership cap of about 100 helps to keep to keep the group exclusive and also of a manageable size for intimate events.

It’s a great idea for a gallery with art worth appreciating to encourage connoisseurship. Oftentimes people need a little guidance as they begin down the road to connoisseurship—and the experts at a gallery are just the people to provide it.

Photo by emurray

There was a fascinating article on wine published in Slate this week: The Greatest Wine on the Planet: How the ‘47 Cheval Blanc, a defective wine from an aberrant year, got so good. It’s about how this particular Bordeaux, through a confluence of controllable and uncontrollable factors, became the Bordeaux against which all other Bordeaux are compared. The author, Mike Steinberger, had the chance to try the ‘47 Cheval Blanc at a wine tasting, and described it as

the warmest, richest, most decadent wine I’d ever encountered. Even more striking than its opulence was its freshness. The flavors were redolent of stewed fruits and dead flowers, yet the wine tasted alive; it bristled with energy and purpose.

As one would expect it’s becoming increasingly rare, but it remains at the top of the ‘to-try’ list for many a wine connoisseur. Read the whole article here.

It’s not fit. It’s feelings.

says a recent article in Forbes on the continuing appeal of very exclusive items with very expensive price tags.

Perceived high quality, a similar (but higher) price compared to the nearest luxury competitor, a desire to impress peers and create the reputation that comes with ownership of certain luxury goods—these things combine to create greater demand for objects not everyone can access.

This is particularly true when items are given as gifts, according to Professor Jagmohan Raju of the Wharton School at the University of Pennsylvania:

If an item is given as a present, then the price is a demonstration of affection and consumers will often justify a higher price.

I have difficulties equating price paid with level of affection for the recipient. Of course spending more money on a gift will buy you “nicer” things, but the value of the gift in emotional terms will depend on how the recipient interprets it. The price of the gift could be $1.80 or $1.8 million—what matters is whether it will mean something to the recipient and whether he or she will truly appreciate it.

Great pleasure and enjoyment can be had by the person who has a visceral, meaningful connection between herself (or himself) and a piece of jewelry. That emotional bond is often created when jewelry represents the love between two people, but it can also manifest itself in the memories of loved ones gone. This winter’s Intelligent Life includes a lovely piece on heirlooms, those jewels passed down which, of monetary value or not, provide their owner with priceless value in the form of memories. One example:

An extremely old, rich and arthritic English aristocrat once told me she could no longer force her mother’s diamond rings—the size and shape of Brazil nuts—over her swollen knuckles. “I’m getting them made into shoe buckles”, she announced, “so that they can stay close to me.” Did she worry, then, if she wasn’t wearing them? “Oh no,” she smiled. “I keep them because they remind me of Ma.”

The article suggests men choose pieces they hope will become heirlooms based on the rare stones involved, whereas women look for artistry. In either case, the provenance of an heirloom (and the love and beauty therein) creates a rich tapestry for future possessors to appreciate. Read the whole article here.

What do women want for Valentine’s Day? That’s the question Jewelry.com asked hundreds of women in a recent survey—and their top response was (somewhat unsurprisingly) diamond jewelry. Though this year, respondents were more sensitive to price than in years past. 38.4% of respondents said their partner usually spends no more than $99, and 39% believed that this was a suitable limit for the budget (whereas 24% said “the sky” should be the limit for Valentine’s gifts).

Even so, almost half of respondents expected “disappointment” or “something he picks up last minute” from their partners. When this is the case, it appears more and more women are taking matters into their own hands. Almost 30 percent said that they’ve purchased Valentine’s gifts for themselves in the past, and 90% said they bought themselves a piece of jewelry as a way to say “I love myself.”

The woman who purchases her own jewelry interprets the luxury and pleasure she gets from the piece in her own way—in many ways she’ll appreciate it more than if it’s a surprise from partner.

[via JCKonline.com]

Jeff Klein, luxury hotelier, recently published a nice guest post on the New York Times Style Magazine’s The Moment blog. Klein operates The City Club in New York and Sunset Tower in Los Angeles, and in doing so has come to define ‘luxury’ in a very Janusian way:

The word luxury means different things to different people. Some may like to have scripted lines thrown at them. On a service level, luxury comes down to a connection between the customer and the employee. This can be exemplified by something as simple as remembering the customer’s name.

As luxury always depends on how the individual interprets it, customizing an offering to take account of a customer’s individual needs is an excellent strategy for delighting customers and offering luxury that they’ll appreciate. Klein offers a few examples: the maître d’ bringing a diner to his favorite table with his favorite drink already on it, or a housekeeper remembering not to put a homemade brownie on the madame’s pillow because she’s on a diet. Certainly those in the diamond and jewelry business can and should cultivate similar relationships with their customers.

The increasing purchasing power of a certain class of consumer in the developing world has enticed many Western luxury brands to set up shop there, particularly in the fast-developing economies of China and India. This phenomenon has led to sales in Asia surpassing the West and increased concentration of marketing activity outside these brands’ traditional markets.

But what will happen when these emerging markets develop to the point when their local brands press to compete for a share of the luxury market, both at home or abroad? And what if these same brands become rich enough and global enough to seek buy-out opportunities of established Western luxury brands? In other words, will the forces of globalisation be allowed to flow in both directions?

In an article in the Financial Times from 11 January, the authors argue that:

companies from the developing world fight against entrenched perceptions when they attempt to buy high-end western names.

They point to recent examples of the Indian hotel group Taj indicating interest in acquiring Orient Express Hotels, Trains & Cruises and Tata Motors bidding for the Jaguar and Land Rover brands.

As luxury products are often associated with their provenance, the next wave of acquisitions will test emerging market-based multinationals’ ability to finesse their way through luxury brand retailing.

A new academic study suggests that the appreciation of objects may vary on a biological level in connoisseurs’ minds depending on the price of the object. Research by Antonio Rangel of the California Institute of Technology, published last week in Proceedings of the National Academy of Sciences, found that participants in the study really thought more expensive wines tasted better than cheaper wines. Functional magnetic-resonance imaging measured greater blood flow and mental activity in the medial orbitofrontal cortices (which registers pleasure centers in the brain) of the 20 volunteers according to the reported price of the wine.

Participants rated the same bottle of wine much better when told it was expensive. In a follow-up blind tasting when they weren’t told the prices, participants were not able to detect differences.

Dr. Rangel believes that this suggests that price is performing as a proxy for collective learning—it’s a heuristic for allowing people to quickly evaluate something’s quality. Another possibility is that people enjoy expensive things more (on a biochemical level) because they think they’ll increase their status and mating opportunities.

Can a successful marketing campaign actually make people enjoy luxury goods more than they would otherwise? It’s an intriguing thought for luxury marketers.

[via The Economist]

Oceanaut, the California-based watch manufacturer, has launched its luxury range for 2008.

Luxury is always in the eye of the beholder, and something need not be expensive to be luxurious, but these classic chronographs and unique divers are certainly made with fine parts: precision gears from Switzerland, hand stitched leather straps from Italy, French alligator straps, precious metals from the United States, Swiss manufacturing and conflict-free diamonds from Africa are all combined to create the watches.

Selling from select Nordstrom stores in the US, the range features models with Latin-based names such as Cortez Limited Edition, Carrero, Baltica, Baccara, Acquatico and Conquistador; they retail for up to $14,500.

That the watches have fallen in with the celeb set hasn’t hurt Oceanaut’s profile. The company supplied celebrity newlyweds Eva Longoria and Tony Parker with matching Oceanaut Pacha Cobra diamond watches, and have a celebrity following that includes Kevin Connolly, Teri Hatcher, Courtney Cox and Venus and Serena Williams.

Clive Christian has launched the world’s most expensive perfume, setting a new Guinness World Record for a fragrance.

Christian gave the design team an unprecedented brief, instructing staff to create the world’s best perfume, ignoring all cost and sustainability issues. The result is a perfume that will change annually as precious ingredients are exhausted.

With only 1,000 bottles each of men and women’s fragrance released annually, the base product is priced at an eye-brow raising £1,250 for just 30ml. The most expensive bottle in the range, the No. 1 Imperial Majesty, retails for over £100,000. Containing natural aged sandalwood from India and Tahitian vanilla, the bottles are made with Baccarat Crystal and inset with a white diamond on the neck. Only 10 have been produced globally, increasing the exclusivity of the brand.

Fears the elastic brief may have priced the product out of the market appear unfounded however, leading Christian to comment:

We didn’t expect it to be as well-received as it has been, which goes to show that if you produce something so well, the world will respond well to it.

In its latest promotions, Lexus is moving further into the market for hybrid vehicles by linking its reputation as a luxury car manufacturer with the eco-friendly merits of hybrids.  Lexus claims to be the first carmaker to focus on this relationship between luxury and environmentalism and in its ads (seen online on various websites), the company talks about how:

One should not have to choose between luxury and social conscience.

Lexus is positioning itself to the luxury car buyer who is not willing to sacrifice design and performance in order to be environmentally aware (sort of like die-hard coffee fans who are unwilling to sacrifice taste but want to buy fairly traded products). Lexus’ tag line argues that it gives more to the driver and takes less from the world. This may be true, but it’s a little hard to swallow when its most expensive hybrid only gets 20 miles per gallon in city driving. Nevertheless, the company is engaging with issues that many other luxury companies aren’t. Just this week Lexus launched an online forum to discuss the impact of hybrid cars on society.

A Boston jail (open from 1851-1990) recently reopened as a luxury hotel after a 5-year, $150 million renovation.  The former jail on Charles Street now plays host to rooms costing as much $5,500 per night and has been renamed the Liberty Hotel.

This project is not the first looking to transform cell blocks into sleeping quarters, but it might be the most luxurious.  Other projects include conversions in the UK, Sweden, Australia, New Zealand, and elsewhere in the US.

As luxury products become more accessible to the mass markets, people looking for a truly unique experience have discovered that places like this offer something which they might not otherwise ever be able to see (or let’s hope so, at least).

[via AP]

Leading Kuwaiti-based developer Al Osaimi Group has recently appointed firms to develop a prestigious seven star luxury hotel in the United Arab Emirates. Located on the Crescent of The Palm Jumeirah, the AED 1 billion project consists of the flagship hotel as well as a five star family resort, 178 lavish residences and spas.

The project will seek to combine Indian and Moroccan architecture and design with themed landscaping and sophisticated conference and catering facilities. The Deverana Spa, a signature of upmarket Thai hotel chain Dusit International will also provide authentic Thai-inspired rejuvenation experiences for hotel guests.

Targeted for completion in 2010, the project will be managed by Dusit, with the official launch of the project scheduled for early 2008. The unveiling of another seven star project in the Gulf region challenges the benchmark-setting Burj Al Arab in Dubai, and cements the region’s reputation for pushing the boundaries of luxury hotels.

El Paso’s Dos Lunas is launching a luxury brand of tequila which the company believes sets new ground in the market for premium spirits. Dos Lunas Grand Reserve is a10-year-old tequila served in 1,000 hand-blown Baccarat decanters, which the company plans to market at $2,500 per bottle.

Dos Lunas owner Richard C. Poe II already produces high-end silver, reposado and, soon, añejo tequilas, but wanted to create something even more extravagant. Poe explains, “We set out to create the world’s best tequila and that goal informed every decision that was made, from growth through production to packaging”.

The launch fits a trend in the US market for fast-growth in super-premium brands. Figures for the Distilled Spirits Council of the United States show sales in high-end spirits grew by 23 percent in revenue to $566 million in 2005, a trend which New York consulting firm The Beverage Marketing Corp has labelled the “premiumisation” of tequila. Indeed in 2006 a one-litre bottle of premium tequila in a two-kilo platinum and gold bottle was sold for $225,000, demonstrating a demand for luxury tequila.

Cunard Line has launched what it claims is the most luxurious cruise ship ever. The £300 million Queen Victoria will be officially named by the Duchess of Cornwall in Southampton before a fireworks display marks her departure on her maiden voyage around northern Europe.

Built at the Fincantieri shipyard near Venice, the ship features three swimming pools, 4,000 sq ft of shops, seven restaurants, a casino, theatre and library spread across her 18 decks. Weighing 90,000 tons Queen Victoria is capable carrying over 2,000 passengers and will meet with Cunard’s two other Queens - the QE2 and the Queen Mary 2 – in New York in January.

Cunard claim that despite not being the biggest of the Queens, Victoria is the grandest, with innovative designs and “floating firsts” such as West-End style boxes in the 830-seat theatre. The opulence is however reflected in pricing, with the cheapest rooms starting at £11,000 and grand suites complete with 24 hour butler service ranging up to £210,000.

Dove is asking America to help define luxury during the Oscars as part of their Dove Supreme Cream Oil Body Wash Ad Contest.

Dove wants real women to record their own 30 second TV ad at www.dovecreamoil.com, defining their conception of luxury and how they shower themselves in it. Semi-finalists will be chosen to travel to Los Angeles for the annual Academy Awards, with the finalists having their ads unveiled to America during the commercial break in the ceremony. Viewers will be asked to vote for their favourite either by text or online, with the winner unveiled during the Oscars.

The contest seeks to build on last year’s successful real-women ad, where Lindsay Miller of California won by telling viewers her shower was her concert hall. The contest not only proved commercially successful for Dove, but also landed Miller a prestigious job at a US production company.

When Mercedes-Benz and McLaren launched the SLR Coupe in 2005 they sought to set new benchmarks in motoring by incorporating Formula 1 racing performance in a Mercedes road car. Technology that was previously the exclusive preserve of a professional motor racing class and restricted to the racetrack was now available to normal (albeit extremely wealthy) consumers.

The Coupe has now been joined by a GT Roadster, which uses an AMG V8 engine to achieve 617 horsepower and 575 pound-feet of torque, resulting in a 3.8 second 0-60 and a top speed of 206 mph. US models rest on 19-inch turbine-style nine-spoke alloy wheels, and the engines even come signed by the engineer who hand-made them.

With supply strictly limited and even the base model costing $495,000 the GT Roadster is a luxurious toy attainable only to a seriously wealthy and patient clientele. However while the Roadster’s race-track performance may receiving positive reviews, it remains to be seen whether this translates to the less suitable environment of public roads, where the 206 mph top speed may be a luxury unobtainable even to those prepared to spend half a million dollars.

Rapid property inflation has removed the prestige of the formerly exclusive million-dollar home according to Canadian estate agents Royal LePage Real Estate Services Ltd.

Seven-figure properties are increasingly being snapped-up by the middle-classes, spawning a new benchmark for luxury as the rich seek ways to distinguish themselves from their neighbours. Royal LePage have published a top ten ‘must have’ feature list for any truly luxury home, which could cost as much as $400,000 to install. LePage agents defined the new yardsticks of exclusivity as follows:

1. A car lift for the garage with an indoor car wash. Car lift is $2,500 to $6,500 while car wash is $30,000.
2. Walk-in refrigerator. Cost $7,000 to $20,000.
3. Spa, gym or yoga studio. Cost $50,000.
4. Wine Cellar. Starts at $60,000 and can go to $150,000.
5. Concierge Services. Rate of $50 to $75 per hour with a minimum purchase of 50 hours.
6. Media room. Starts at $50,000.
7. Wrapping or sewing rooms. Starts at $5,000.
8. A wired home. Cost $25,000.
9. Home elevator. Cost is $30,000 for equipment and installation with construction extra.
10. Heated driveway. Starts at $5,000 for 600 square foot driveway.

The list shows how changes in lifestyle and technology in particular are influencing the property market and the demand for new luxuries, with time saved by concierge services spent on personal indulgence such as spas whilst technology is harnessed not only to do chores such as washing the car but also to set new standards for entertainment facilities.

Elite travel operators are increasingly seeking to combine the opulence of traditional safari travel with the experience of poverty more typically associated with charitable ‘gap-years’, creating a new range of range philanthropic yet luxurious holiday packages.

New York-based Artisans of Leisure have reported a 15% rise in requests to combine luxurious African trips with charitable visits to underprivileged health clinics, schools and orphanages in packages that can cost in excess of $50,000 per week.

The explicit purpose of twinning luxury with poverty is to solicit donations for the communities involved, whilst still providing the travel experience wealthy donors are accustomed to. Indeed the not-for-profit sector is increasingly seeking to muscle in on a market previously dominated by exclusive travel agents, recognising that big donations are easier to acquire from those that experience development issues first hand.

The increasing popularity of the packages has been linked to the role of celebrity campaigners such as actress Angelina Jolie and US singer Bono in raising awareness of development issues, a trend which is helping to fuel the rapid expansion of luxurious charitable travel.

This week Tiffany and the Swatch Group announced a new partnership lasting at least 20 years that will expand Tiffany’s small watch business into “one of the most important watchmakers in the world in the next five to 10 years,” according to Nicolas G. Hayek, Sr., Swatch Group chairman and co-founder.

Tiffany will continue its current lines and expand them in a new company, Tiffany Watches, which will be entirely owned by Swatch. Both companies will share their expertise to collaborate on design, engineering, manufacturing, marketing, distribution and service. Tiffany will have a seat on the company’s five-member board of directors, product design and marketing committees, and will get a share of the new company’s profits.

Many consumers associate Tiffany with fine diamonds and Swatch with cheap watches (even though Swatch does own several luxury timepiece brands, including Breguet, Blancpain, Glasshütte Original, and Omega). Tiffany will have to be careful so as not to pull a ‘DaimlerChrysler’—tarnishing the brand image of both companies (bringing the Tiffany brand ‘down’ to Swatch) and losing a great deal of money in the process (when expected synergies don’t actually happen). It sounds like Tiffany and Swatch are on the right track though, as they’ve already said distribution will be “selective” through the Swatch Group global network, Tiffany stores, and areas where rivals like Bulgari watches are sold.

What purpose do charms in jewelry serve? Should they be a staple of a woman’s daily living or are they chintzy, cheap, and better left for teenagers and the lower end of the luxury market?

The Financial Times’ most recent Watches and Jewellery section has a very interesting article about these trinkets, noting their recent rise in popularity (they’ve been Cartier’s best selling jewelry range for the past 12 months) and how charms can mean more to buyers (and those who receive them as gifts) than regular jewelry pieces. Designer Theo Fennell says:

I have always believed that working jewellery [that does something, such as a locket, opening ring, or scent bottle for the neck] holds a great fascination for people, a sense of mystery or private magic. … These pieces are charms in in the proper sense of the word—talismanic and magical.

They can also be ‘very practical,’ according to Victoire de Castellaine, creative director of Dior Fine Jewellery. He believes charms are good for ‘men who don’t want to find a new idea every Christmas.’

This statement sounds a bit disingenuous coming after Fennell’s quote; de Castellaine seems to imply that charms are perfect lazy men trying to find something suitable for their wives, rather than finding something truly meaningful. I believe that it doesn’t matter what the piece is, if it’s a gift it needs to be a pure and true representation of the love between the giver and recipient. Jewelry, especially diamonds, can be the perfect gift for loved ones, but the gift has to be carefully and lovingly considered.

The Courtauld Institute of Art, located in London’s famous Somerset House, is celebrating its 75^th anniversary this year.  The Courtauld Gallery has just launched a new membership organisation called the Samuel Courtauld Society, which gives its members greater access to the UK’s most established art world network.  The Gallery has pieces which span 700 years of art history and has the most extensive collection of Impressionist and post-Impressionist art in the UK.  

For various contributions – starting at £500 and going to levels of £5000 up – members of the Samuel Courtauld Society get invitations to private viewings of the special exhibitions held at the Gallery, free access to the Courtauld’s resource libraries, free publications and access to its staff and director.  This year’s exhibitions feature works by Walter Sickert, Auguste Renoir, and Paul Cezanne.  More information on the Samuel Courtauld Society can be found here.

For those who define luxury as something more for the mind than the mantelpiece, becoming a member of an art society is the ultimate luxury experience.  It helps us explore all disciplines of knowledge through a consistent medium, from politics, history, and philosophy to science and medicine.

Having recently spotted a diamond-encrusted skull (Damien Hirst’s For the Love of God) and a diamond-encrusted Mercedes-Benz (with diamond-encrusted gear shift), this Swarovski crystal-encrusted toilet seems almost common. Almost.

With 50,000 hand-set crystals, it’s one way to bring a little (rather a lot of) sparkle and shine into your bathroom. But the creation, from Jemal Wright’s Isis Collection, “only” costs $75,000. It isn’t as though this thing is covered with diamonds. But what if it were?

Recently Rapaport held an auction of certified diamonds, with prices per diamond ranging from under $4,000 to $12,000. If we to cover such a commode with 50,000 diamonds costing an average of $6,000, we’d have a toilet costing $300 million in diamonds alone. Damien Hirst’s skull only sold (reportedly) for $100 million.

If ‘For the Love of God’ juxtaposes mortality and eternity, what would a diamond-encrusted toilet mean?

[via Born Rich via This Old House]

A mid-century modernist house in the desert of southern California, outside Palm Springs, will go on auction next spring as part of an art auction through Christie’s on postwar and contemporary art.  It has a listing estimate of $15 to $25 million.

As prices in the art market have surged over the last few years, the idea that classic architecture (in this case, a design by Richard Neutra) is a form of high art is creating new opportunities in the luxury art market. 

The home was bought about 15 years ago and had been advertised as a tear-down, according to a recent article in the New York Times.  After an exhaustive restoration, the home now has been restored to its original condition.

The huge range in the pre-sale estimate indicates that certain buyers might be willing to pay much more for a home with such a pedigree and shows the way that luxury retailing is making its way through every sector of the economy.  It also indicates that the preservation of classic architecture might be served well not only by public interest bodies but by private enthusiasts with the money to spend.

With Thanksgiving behind us and the holiday season in full swing, it’s time for the pundits to start guessing whether overall holiday spending will be lavish or more measured given recent difficulties in the mortgage and housing markets. Recent research from Deloitte in the UK suggests that consumers are going to still spend, especially on luxury goods, but may pay for it (metaphorically and actually) in the new year. According to this FT report, in a survey of 1000 adults in the UK, Deloitte found:

• Consumers intend to spend 7% more this year on Christmas gifts, socializing and food and drink than last year.
• 19% of consumers intend to purchase a designer handbag or shoes.
• Price is a less important consideration for shoppers; only 20% of consumers listed price as a main reason for choosing a particular store (it was 37% in 2005 and 23% in 2006); “value for money” also declined.
• 62% of shoppers choose a store based on “convenience” (from 50% in 2005)

Deloitte says this is evidence of our so-called “cash rich, time poor” society, and I have to agree.

But back in the US, willingness to spend might not be as great. Despite reports of decent Black Friday earnings, this week NPR reported that the Consumer Confidence Index dropped to 87.3, down from 95.2 in October and the lowest since October 2005 (following Hurricane Katrina and rising gas and oil prices).

Rosalind Wells, chief economist for the National Retail Foundation, said:

With the weak housing market and current credit crunch, consumers will be forced to be more prudent with their holiday spending.

Even with the credit crunch, I’m not so sure people will actually be more prudent—if they have a line of credit they’ll use it to purchase expensive gifts they don’t see as optional.

We’ve seen it in cars and resorts; now ethical, sustainable luxury is playing a larger role in other aspects of peoples’ luxury consumption (according to this article in the International Herald Tribune from this past weekend). Ethical living has hit the media, through film (An Inconvenient Truth, Blood Diamond) and and in print (in glossy magazines like Vanity Fair and Vogue), and people are generally becoming more aware and more willing to spend on ethically produced products. Milton Pedraza from the Luxury Institute of New York said:

Our research shows that if wealthy consumers know that a luxury brand is socially responsible they will give that brand greater purchase consideration over a brand with similar quality and service.

Of course there is a worry for luxury brands that becoming sustainable and ethical will take away some of the aloofness and elitism that give them cachet, but if the move towards green living continues, companies will have no choice but become more accountable and transparent.

Knowing the provenance of an ethically-sourced item gives people something to talk about and makes them more involved in their luxury. So says Vivien Johnston, the founder of Fifi Bijoux, a British-based ethical jewelry company:

One of the key luxury elements is knowledge of provenance. It’s the value that really separates you. With Fair Trade, it’s not just a diamond: I can show you pictures of the miners, the mountains, the cooperative projects and the people that produced it, that’s a real element that you don’t get from most products and I think that people appreciate the story.

Whether ethical luxury is a fad that will pass or a truly revolutionary step for the market remains to be seen, but for now I don’t see any luxury companies becoming less green.

The Robb Report, the monthly magazine and website about luxury goods and experiences, has just announced its annual holiday gift guide. While I haven’t been able to find the full ‘Ultimate Gifts’ section online, the Wall Street Journal Wealth blog has had a look and noted a few highlights, including a $250 million yacht (with 13 suites and two helipads) and $16 Ferrari package (with a F1 Ferrari, 2 VIP passes to all 20 Formula One races next season, and lunch with Ferrari personalities).

These are not the only luxury items the Robb Report has recently promoted—earlier this month they began offering the Robb Report Limited Edition Series from their website’s Marketplace section. It’s an elite offering, including a car (a bespoke commissioned Rolls Royce Phantom for $493,272.00), wines (Ultimate Burgundy or Definitive Bordeaux from the Terroir Company, $1 million each), jewelry (Beaudry diamond and platinum bespoke ring, bracelet and earrings), and travel (golf, shopping and winter sports trips with a Sentient Jet membership $195,000-475,000) among other offerings.

Does the fact that the Robb Report is offering such luxury directly (in addition to highlighting items in guides) suggest that demand exists and that the economy isn’t doing as badly as we might think? Are they (cynically) in it for the high margins luxury products often offer, or do they really want to bring their readers the very best luxury they can find? The answer is probably somewhere in between.