From luxury to comfort "trend towards affordability"
“Luxury” is a very ambiguous word that is used very loosely.
Merriam-Webster defines luxury as: a condition of abundance or great ease and comfort: sumptuous environment luxury>3 a: something that adds pleasure or comfort but not absolutely necessary luxuries>b: an indulgence in something that provides pleasure, satisfaction or comfort.
No one would dispute the above definition, but perceptions of luxury vary by individual and by product. For some people, there is never a moment when they don’t think about luxury, because for them the line between luxury and necessity has completely blurred. For others, it may seem tacky to spend at a time when so many are struggling.
None of this is new news or indicative of a new trend. But what is rapidly appearing on the horizon of change is the level of accessibility of luxury products. A recent study indicated that luxury brands have homogenized luxury to the point that 63% of wealthy consumers feel luxury is being commodified. According to a report by the Luxury Institute, “You can walk down most of the main streets, such as Fifth Avenue, Avenue Montaigne and Bond Street, you see the same look in store designs and products.”
This accelerating phenomenon of luxuries becoming affordable stems from multiple intersecting trends, including the emerging global marketplace, massive scalability in manufacturing, and the advent of the Internet.
Billions of new global consumers
The global market is generating a greater availability of goods for a group of consumers that is growing at a rate never seen before in history. Despite the recent crisis of confidence in stock markets, global fundamentals make it more likely that millions will continue to lift themselves out of poverty and millions more will become millionaires around the world in the coming decades. From a global or even regional perspective, a relatively new market segment called the wealthy masses has gained great importance and attention from luxury brand marketers, all for obvious reasons.
Massive scalability for manufacturing
As companies discover the potential to create and offer more affordable luxury products to the wealthy masses, many luxury brands are intent on joining a new class of mass “luxury” brands that have begun looking for ways to scale the market. production by establishing global partnerships that can utilize manufacturing capabilities in Asia as well as advanced global logistics solutions.
As luxury brands join the race to make this transition, they often seek to reclassify luxury in a more democratic context by repositioning themselves as affordable luxuries (a contradiction in terms), to cater to this vast market segment. Plus, you’ll likely get tech support for your computer from Manila in the Philippines, design and fabricate your own custom made-to-order cabinets in Beijing, China, or have your next X-ray reading ordered from Bhavya in Bangalore. In his best-selling book, The World Is Flat, Thomas L. Freidman argues that as the global economic playing field levels out, people in far flung places will become major market players. The relevance of your point increases as we move beyond the product and great service comes to the fore.
The world unites – Online!
Perhaps the biggest chilling factor, for any company looking to capitalize on these cross-trends leading to what the Luxury Institute calls a “Luxury Access Revolution,” is the Internet. Beginning with the dotcom boom a little over a decade ago, literally a trillion dollars has been invested in fiber optic cable; and, along with the emergence of common software platforms and open source code, efficient global collaboration has been enabled. Friedman says that these flatteners converged around the year 2000 and “created a flat world: a global, web-enabled platform for multiple ways to share knowledge and work, regardless of time, distance, geography, and increasingly, language.” “.
After some resistance to change, the debate over whether or not they should sell online is over for most luxury brands. According to Michael Baugus, CEO of Crossroads Enterprise, Inc., a company that specializes in fine kitchen cabinetry, “In this new space will emerge leaders who fully understand how technology, globalization, and commodification are transforming our world. They will not be only online, but to innovate online by creating never-before-seen products and categories that are relevant to this segment will revolutionize your industry as a result.”
Mission accomplished?
Opportunities abound for luxury providers for those who can intelligently harness these market forces. In a Harvard Business School lecture last April, Nancy F Koehn, a professor of business administration at Harvard, explained the vitality of the market. She said that “luxury goods was a changing space, a space with extraordinary enthusiasm and excitement; things are moving forward vigorously.” However, entering this space and succeeding in it is far from a given.
Today’s consumers are short on time, short on patience and, in today’s economy, short on money. For most products, especially luxury items, the search for affordability has begun. Even the extremely wealthy are very discerning and educated online shoppers. What this means is that at every price point on the luxury spending spectrum, all consumers share a common interest in the value of the goods and services they purchase and their medium of choice for conducting their research and increasingly for Making your purchasing decisions is on the Web, and you need to be able to communicate your value amidst all the noise.
Second, while mass manufacturing and distribution is becoming commonplace, many companies have unfortunately, to their detriment, neglected to include in their new business models an emphasis that today’s consumer is dissatisfied with that you simply remove more products, they also require you to deliver great service. With everyone competing to take advantage of the ubiquitous, buy anywhere anytime online efficiencies, the differentiators for consumers will be a great service bolstered with transparency and trust; not only on an individual experience level, but they will also trust their peer buying groups with whom they regularly engage through their preferred online communities.
Everyone wins when competitors in this space discover or rediscover a great service, as it will only add to the overall experience and value each customer receives. Overall, as the highest quality goods and services become widely available and affordable to the masses, and companies seek to deliver them in ways that build loyalty and trust, the quality of life will increasingly improve for everyone.