Wednesday, 24 December 2008

All I want this Christmas is one Chanel Jacket - 24/12/08

One of the questions that many are pondering, including us, is with the dynamic economic climate we all find ourselves in and with a view to this continuing for some period of time, does the luxury consumer:

  • Reduce the number of items they purchase each season from their favourite brand, to say one Chanel jacket this season, down from two-three previously, three pairs of Manolo's instead of several....? or;
  • Shift their brand loyalty to the more inconspicuous labels so they may continue purchasing but by stealth... (read: pared down brands)? or;
  • Increase their purchasing of markdown items, afterall with a lot of brands reducing 30-70% for current season, you are literally 'throwing' money away if you pay full price... or;
  • Realise they really don't need it all and opt for their own retro moment, in a re visitation of their multi-marque mini boutique, aka their own wardrobe?
For some markets the success of luxury retail is based on consumption by local clients for others it is driven by inbound tourism; or it is a combination of both. In Australia currently there is a two-pronged issue, the volatile dollar against both the US dollar and the Euro is causing havoc for importers and the now increased prices that the brands have had to introduce as continuing to absorb the price differential is no longer an option. This coupled with many of the solid luxury clients that travel the world loyally supporting brands having their own wealth slashed due to stock markets and other investments going south, will make the"Partridge in a pear tree" probably about as good as it may get for some this Christmas.

An article in Associated Press looks at some changed consumer behaviour taking place in the US, particularly with regards to the luxury consumer.

In Australia some core luxury brand clients, VIPs, VVIPs etc can contribute in the vicinity of 10-20% of retail sales in a year, reduce this, along with the spend of the aspirational shopper there is the potential of a 30+% shortfall. The success of these brands is still in the hands of the loyal VIPs, they are a 'known entity' to each brand and more than ever they need to be courted strongly, consistently and respectfully so they don't shift focus and purchase elsewhere. Buy for who you know and just a little for who you may know..

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Who's behind the MO DOWN

Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury,