The Price of Luxury

Consumers are attracted to luxury but what defines it? Luxury for me is indulging in Lindt chocolates, possessing a GHD to tame my wild frizz, taking a long island vacation and spending quality time with my children.

According to a report in The New York Times (August 2011), Nordstrom has a waiting list for a Chanel sequined tweed coat with a $9,010 price. Mercedes-Benz US said it sold more cars in July last year than it had in any July in the last five years.

So what’s all this talk about a recession? The Luxury brands sector globally is bucking the trend and experiencing a boom.

I recently attended a Future Group marketing breakfast where it was said that it takes a lot for the luxury brands sector to fall flat. So are our luxury brands in South Africa taking a knock or are we riding the wave of elitist need?

According to the Luxury Brands Association of South Africa, this sector is in a stable position. There is a sense of consumer confidence but we haven’t turned the corner yet.

This brought on the debate as to whether luxury brands should offer lower-end products and capitalise on the youth market, which currently accounts for a whopping R104.8-billion spend each year.

A more affordable product offering could be a way for younger or aspirational consumers to experience the brand sooner, develop an affinity and hopefully grow with the brand. However there’s the risk of diluting the appeal of a luxury brand. For Calvin Klein, whose products you can find at your local Edgars store, this has rung true as they are now looking to open exclusive Calvin Klein stores.

It’s not enough for luxury brands to rely solely on a name and exclusivity. They need to be looking at real quality and matching sentiment.

This is where credible and objective Public Relations (PR) plays a pivotal role. PR can relay the brand story/narrative which is steeped in the consciousness.

The Daytona Group that launched luxury brand Aston Martin in South Africa for example, don’t embark on much advertising. Their communication value lies in PR.

PR has also adopted an integrated approach with the inclusion of social/digital media where highly engaged consumers use these platforms to make purchasing decisions.

Luxury Brands Infographic

With all this said, is it a question of ethics to invest in luxury brands in our volatile economy, while water is a luxury in some parts of the world including our very own backyard? What defines your luxury?