The economy is suffering but it will not remain so forever. New markets will emerge and people will again start to spend. And if history is any indicator, when we do pull ourselves out of the global economic mire, people will be giddy, making not only basic purchases again, but luxury items as well. The question is, what will luxury mean after a prolonged economic downturn?
The concept of luxury has been present in various forms since the beginning of civilization. Its role was just as important at the dawn of humanity’s move from hunting and gathering into settlements empires as it is in modern societies. People seek out the extraordinary as a means of attaining status and as a way of simply finding greater comforts. In the past, the consumption of luxury was limited to the elite classes – those with the cash could buy what they wanted and those without were restricted. This meant that the things which defined luxury were fairly clear. Whatever the poor cannot have and the elite can was identified as luxury. Industrialization began to change all that. And in a postmodern world where identity is so often tied to image and the middle class lives with the comforts that elites of two hundred years ago would have relished, luxury has changed (and will no doubt continue to do so). With increasing “democratization,” several new product categories were created within the luxury market which were aptly called – accessible luxury or masstige luxury. This kind of luxury specifically targeted the middle class (or what is sometimes termed as aspiring class). As luxury penetrated into the masses, defining luxury has become increasingly difficult.
Price was the primary element of definition for a long, long time. Many other attempts have been made to define luxury using the price-quality dimension stating higher priced products in any category is luxury. The more it costs, the more likely it is to be defined and marketed as a luxury. Similarly, researchers have used the uniqueness aspects of luxury too. If it’s rare or difficult to attain, it is a luxury. If it is the only one in existence, it is a luxury. However, with increasing quality orientation from lower end brands and massification of luxury, it is hard to use either of the above dimensions to define luxury. Furthermore, the nature of status has changed, making identity a central component of how we display (or choose not to display) wealth. During the dotcom bust and again during this recession, “every man chic” became the norm for many people – those who could afford a $300 pair of jeans turned to brands like Levis. The Gap positioned itself in Hong Kong and Milan alongside retail shops like Gucci and Prada. American classics that represent a mythical sense of democracy and fair play have become brand badges and shopping at these stores is a form of cultural capital. This changing concept of luxury perversely can accommodate what would in traditional terms be seen as a completely contradictory value proposition. Do they represent luxuries? I don’t know, but there success over the last few years and their choice to locate in shopping areas associated with high-end brands certainly points to something significant.
So what does that mean for retailers and manufacturers going forward? luxury increasingly is defined as an expression of individuality, through the unique and highly personal experience that luxuries help provide. Luxury brands have become not just ends unto themselves, but also means to even larger personal aspirations. In a world of multiple stresses and limited time the ability to slow down has become a luxury. Shopping has become as much about relaxation, establishing identity and setting the fast-paced world of work behind us for a short time.
If luxury is more and more defined in terms of personal fulfillment and customization of experience, then consumers no longer will be content to select from a standard or traditional roster of “luxuries.” The luxury experience will embrace a much bigger universe of products and services. And that means the retail experience has become more important – the experience is as much a luxury as the products themselves.