In recent times I have come across various newsworthy blog posts centering on luxury consumption and how it will get affected by the recent financial meltdown. Some of these include (
Luxury consumption;
Luxury Consumption Tendencies in Recession: Early Evidence;
Luxury consumption: will it really be affected by recession?) I have talked about the effect of the downturn on luxury consumption. In two of these blogposts, looking through an exploratory research, I opined that the broad luxury consumption will not decline in comparison to this recessionary period because of diverse variables including, general consumption tendencies, tourism trends and the rise of developing economies.
The mass consumption trends show an interesting consumption trend overall which has been termed 'the lipstick effect'. The effect relates to rougher economic conditions when people who are regularly buying luxury goods tend to consume less costly luxury brands but the consumption blueprint continues. It was first remarked by researchers at Estee Lauder who picked up a great leap in Lipstick sales in the aftermath of Sep 11 attacks and Leonard Lauder, Chairman of Estee Lauder promoted it. Afterwards when studied, this effect was noticed through various recessions world has experienced across nations.
There is affirmative trend emerging to support this result. Rather than shifting their overall expenditure and becoming thrifty, people are merely trading down (another term rather well known in fashion world) to value for money luxury goods to cheer themselves up. The movement is distinctly experienced from the early sales figures from the world's big cosmetic firms including Shiseido, L'Oreal and others. The EU based personal products index is an splendid proxy for the international cosmetics sector because it is dominated by L'Oral and Beiersdorf. So far in the downturn, this index has already exceeded the larger market by forty-five percent.
The accessories (or what is branded affordable luxury) is a very interesting product category. They include products such as fragrances, belts, glasses, inexpensive jewellary, and so on. The affordable luxury brands, even if they are comparatively cheap in price (comparing to its high-end and intermediary counterparts), still function as luxury products as these goods are inventive, sophisticated and also sold through luxury channels. Many of these goods are in use for self-gift giving and also general gift-giving.
The affordable luxury goods offer an noteworthy comparative research environment to focus on. There are distinct research gaps in our understanding as to: how do other low-cost luxury products (else than Lipstick) do comparatively? how do affordable luxury products do in comparison to high-end luxury (the real and very high end luxury); how do consumers engage with these low-cost luxury goods?
These questions pose some intriguing gaps for further research...
Source:
The rise of affordable luxury consumption;
wikiinvest website;
Paurav Shukla's marketing website and
luxury consumption blog;
Forbes website;
Recession and luxury market and
Reuters on luxury