Breaking the Barriers to the Luxury Market
by Bonnie Conrad on February 28th, 2008
Companies large and small all recognize the importance of the luxury market, but many are discouraged by the seemingly high barriers to entry. No matter what the perceived difficulties, however, it is important for company owners to look carefully at this important space. Catering to the luxury market has a great many benefits, including:
> The luxury market is much more resilient than the general retail space. When the economy begins to slow down, the effects are felt immediately by the average consumer. More affluent consumers, on the other hand, have much more of a financial cushion. While luxury brands may decline during an economic downturn, the effects are generally shallower and shorter lived.
> Those shoppers in the luxury marketplace can afford to indulge their whims and their compulsions. While ordinary consumers may need to carefully consider a high end purchase, those in the luxury space typically have fewer such restraints.
> Catering to the luxury buyer affords many opportunities for up-selling and cross selling. From high end homes to high end furniture, the upscale market has almost unlimited potential for cross selling and up-selling. Consumers who can afford the best have discriminating taste, but those who can fulfill their needs stand to benefit greatly.
Access to everyday luxuries has become much more ubiquitous in recent years, and the line between perceived necessities and true luxuries has begun to blur. From high end watches, handbags and golf clubs to upscale homes and vacation resorts, more and more middle class consumers have been snapping up items once considered the exclusive province of the upper class.
This redefining of luxury has presented challenges for some companies and opportunities for others. Many companies have had to redefine their brands and increase their cachet in an effort to enhance their appeal to the luxury marketplace.
Others have created separate brands to serve the newly affluent while not neglecting the old money that made them so successful. No matter how they approach the subject, however, those companies know that the luxury space is a very lucrative one, and they are coming up with new ways to serve these special individuals.
