Has Luxury Lost Its Luster?

A sobering study of luxury consumers in Asia, North America and Europe found that wealthy consumers (i.e., Americans with average incomes in excess of $200,000) are no longer enamored with luxury.  Respondents seemingly have had enough luxury in their lives, evidenced by the fact that nearly 80% of the survey respondents said they are making fewer meaningful purchases. The current political and cultural environment, along with the growing gap in income disparity, are influencing wealthy consumers’ purchasing decisions.  Many wealthy consumers do not believe that now is the right time to purchase luxurious and conspicuously consumptive products.

Price is another deterrent to the wealthy's purchasing of luxury products.  Many affluent consumers do not believe that luxury brand pricing is worth it.  More than 67% of the respondents surveyed stated that many mass-produced brands offer a comparable level of quality to their luxury counterparts.  Another sobering statistic is that 53% of the consumers reported that they will only purchase luxury products when they are discounted. 

Historically, luxury products were associated with limited quantities, distribution and availability, and the highest quality materials and craftsmanship.  Traditional luxury brands that have expanded distribution and reduced quality are now paying the price for those decisions.  

There also has been a paradigm shift in the attitudes of luxury consumers.  They don’t need more things.  As Seth Godin noted, we no longer live in a world of scarcity where there was a need and desire to acquire more things.  Luxury consumers have enough things.  Luxury consumers live in a world of abundance where there is a scarcity of time and connection.  That’s a valuable lesson for decorative plumbing and hardware showrooms.  Luxury consumers are more interested in experiences than they are products.  That’s why savvy sales professionals and showrooms focus on how a new bathroom will make a customer feel and how it will contribute to a healthier and more enjoyable lifestyle.  Talking about features, benefits and product performance will not convince a luxury consumer to pay a premium for a product any more.