Luxury market is a broad term that encompasses perfumes,jewelery, watches, clothes, footwear and many more. In fact there is noparticular definition of what products come under the category of 'luxury'. Thereare very few parameters to decide to decide on the term. Based on the utility, andthe amount of money spent on buying the product, it can be defined as 'a luxuryproduct'. These are meant to show off a person's prosperity, lavishness, andalso serve as a medium of self expression.


Attitudes about Luxury:


Worldwide market for luxury goods has a highly cyclicalnature. Wealth of the people, economic growth of a country, and mediapromotions are said to be the driving force behind the industry. Global luxurymarket has grown at a pace of 15% for a year, outperforming mainstream apparelsectors. Changes in human behavior, a positive increase in the amount ofdisposable income and globalization has made this magic transformation.


Global market for luxury products is expected to grow to $2trillion USD by 2010 of which the US market will constitute to be around $1trillion USD. With the growth in Western consumer markets seeking uniqueshopping experience, international brands are forced to promote their productsto the core markets.


Spending on Luxury:


There is a rising interest for the shopping of luxuryproducts. This high end market, which was once considered to be accessible onlyfor the elite, has undergone drastic changes with middle income consumersshowing interest towards the consumption of luxury goods. Growth of yourprofessionals, increasing families where both husband and wife are working, andsingles with more money and strong yearning to shop for luxury products willboost the growth of this segment. Beauty products, perfumes, and spa products willattract the attention of shoppers. This trend will facilitate the entry of newbrands into the market.


Prominent Brands:


New brands will cultivate brand loyalty to lure luxuryshoppers. More number of boutiques and specialty stores will spring upemphasizing on brand image. Fashion accessories like wallets, belts, handbagsetc will fuel the growth of this segment and will be preferred by increasingnumber of customers.


Brands like Gucci, Versace, Christian Dior, LVMH, Couture, andGiorgio Armani will be dominating the global market. A recent survey reportsthat Gucci products top the list of luxury brand shoppers in 48 countriesaround the world. Besides this, Louis Vuitton, Calvin Klein, and Chanel arealso preferred.


Growth of the market is fuelled by growing economies ofcountries like Asia. US, and Europe will set the leading trends for designerwears. North Americans show less interest in buying designer wears, while UAEand Hong Kong tops the list. Shoppers of Eastern Europe, Middle East, LatinAmerica, and Africa believe that designer goods have superior quality.


Recession and Luxury-Challenges for the Market:


With the spreading pangs of global turmoil, theunprecedented growth of luxury segment during the past decade has experienced shrinkageof 10% during the first two quarters of 2009. There is a paradigm shift in theshopping habits of the consumers with the trend moving towards private label,and cheaper brands.

 

Sales of luxury products will have a sluggish growth in 2009, and will revive by the end of 2010. Industry analysts also predict that sales in the segment will further increase by 4% by 2011, and ultimately recover completely in 2012. Companies need to adopt new strategies, and opt for cost cutting tactics, and attempt to develop a premium shopping experience.


Luxury market is also affected by changes in the ethics of the consumer. Highly competitive, luxury market is packed with consumers who are getting less loyal and more demanding with regards to their brands. Along with the growth of the luxury market, counterfeit items also continue to peddle in the market; worldwide, in an alarming ratio.


Brands that follow approaches to minimize overhead expenses and invest in developing brand loyal among their customers, and create a unique shopping experience for them will be able to reposition themselves in the market and see a strong growth in the years to come.


Despite the slump in revenues in the recent past, luxury market is booming again. Increase in the number of worldwide millionaires, and mass consumers dipping into luxury have boosted up the confidence in economy, predicting a bright future for luxury fashion houses.


References:


  1. &sec=article&uinfo=<%=server.URLEncode(2080)%>" target="_blank">http://www.cosmeticsdesign.com
  2. &sec=article&uinfo=<%=server.URLEncode(2080)%>" target="_blank">http://www.plushasia.com
  3. &sec=article&uinfo=<%=server.URLEncode(2080)%>" target="_blank">http://www.researchandmarkets.com
  4. &sec=article&uinfo=<%=server.URLEncode(2080)%>" target="_blank">http://www.forbes.com