Affluent consumers think of luxury differently now.
Stop for a moment and think about how much marketing has changed for high-end brands during the past few years. I recently spoke with a friend who years ago helped me build a strategic alliance between her high-end travel brand and my client’s home brand. We talked about all of the dramatic changes in the way affluent consumers buy high-end goods and services. It’s a much more subtle play now. Less bling and more substance.
Ironically, that very same day, I received a research report from Ipsos with some fascinating information about how the concept of “luxury” has evolved among affluent consumers. It validated many of the anecdotal points my friend made during our chat.
The Ipsos report traces the evolution of the luxury boom of the mid-2000s, when mass-affluent consumers drove the market based on perceived, anticipated, or paper wealth – through the recession and recovery. According to the report, “The mid-2000s boom was marked by a shared sense of what luxury meant – the imagery of yachts, private jets, and classic (if sometimes ostentatious) brands was pervasive.”
“With the recession, luxury evolved, becoming more idiosyncratic and self-defined, more intimate and personally-meaningful. It became less about the logo and more about what the logo meant to the individual. Luxury also became more subtle and understated, and value became a key theme, with messages such as ‘heirloom-quality’ having strong appeal,” said the authors in the report.
What I found particularly fascinating was the list of terms that Ultra Affluents ($250K+ HHI; top ~3% of the population) use to describe “luxury.” Terms such as heritage, one-of-a-kind, refined, and exclusive are actually trending down, with low percentages of respondents associating each term with “luxury.” Ipsos suggests that these terms “reflect disinterest in excessive formality.”
What terms are trending upward? These four terms stood out for me:
• Excellent design, reflecting in part the growing role of streamlined technological products into modern conceptions of luxury.
• Excellent reputation, reflecting in part a new approach to evaluating quality. Luxury is no longer “tested” by seeking out established brands or media “taste-makers,” but rather by exploring quality ratings across sources, including customer reviews and social media.
• Splurge, reflecting a growing ease and light-heartedness about luxury.
• Unique and rare, which reflect an authentic and meaningful scarcity.
This is great information for marketers to share with their teams. Frankly, I think these trends are better for the high-end marketplace, as well. If luxury can continue to be more personally meaningful to consumers, that’s a good thing.
If you’d like to learn more about the Ipsos study, click here.
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