austerity

How austerity and luxury go hand in hand

Isaac Mostovicz writes that when money is tight, consumers turn to tried and tested luxury...

After the Christmas break, many luxury brands, including Swiss luxury watch brand Richemont, and Rolls Royce, have announced record sales increases. In the US, the Telegraph reported a few weeks ago that while luxury brands are on the rise, discount stores are seeing a slower pace of growth, and in the UK, a similar trend was witnessed that saw consumers preferring to pay more for just one present rather than buying enormous quantities of presents. The pattern emerging in the UK shows a preference for trusted luxury brands over high street offerings.

In the age of “Austerity Britain”, retailers have seen consumers buying with a Victorian style of generosity – spending more on one main present. Items such as Apple iPads, iPods and the Amazon Kindle were along the Christmas bestsellers, with upmarket department stores like John Lewis and House of Frazer drawing in the cash.

In an interview, consumer behaviour specialist Henry Enos explained, “People are looking for value for their money. People have been made to realise that money issues are prevalent, so what people have gone to in times of uncertainty are tried and trusted brands.” With more of a limit of their spending, people plan their purchases more, and spend wisely on items that guarantee durability and value for money. For those brands that tick the boxes of traditional, tried and tested, their resilience and dependability is the main attraction to the consumer. Brand heritage is key.

For the Theta personality, the emphasis on the context of the product – it’s brand name, the connotations it has in society and the legacy it has achieved – are the points that persuade someone to purchase it. Yet also, the heritage of a tried and tested product is built up through performing well and showing its resilience and in this way, the quality and durability of the product appeals to the Lambda personality.

Whatever causes us to purchase a product, it is apparent that as conscious as people are of the need to curb their spending, they are setting their sights higher on the familiar, more expensive brands that have proven to stand the test of time. Plus, when money is tight, quality rather than quantity may help consumers feel upbeat when all anyone around them talks about is the slump.

[…] This post was mentioned on Twitter by Bill Geiser, Janus Thinking. Janus Thinking said: Janus Thinking: How austerity and luxury go hand in hand http://bit.ly/emrXp1 […]

Steffi says of this article...

Glad I’ve finally found soemhting I agree with!

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