Luxury guilty

In the last two decades, luxury brand management has caused lots of interest and discussion in the academic and business area. The reason is because more and more people have ability to afford luxury goods and this trend actually brings much revenue to the industry. We can see the growth of the trend leader LVMH, Gucci Group and Richemont<Swiss luxury watch,jewellery company> have increased dramatically from US $ 20billion in late 1990 to $US 180 billion now.

The reason caused them growing so quickly is because these luxury brands received benefit brought by globalization, wealth-creation opportunities, new market segments, digital communications, international travel and culture convergence.  

However, they have also faced a volume of aspects and effects to be forced to change because globalization, like counterfeiting, production, outsourcing, country-of-origin effects, more options and competitions, and oriental luxury consumption more than western.

Besides, the war in luxury goods has changed to multiple layer and context. Whether it is fashion and accessories, leathergoods, fragrance, skincare, cosmetics,wines, spirits, timepieces, jewellery, automobiles, private jets, hotels, home decoration

or concierge services, the supply of luxury is currently incessant. The competitions across all luxury categories and its offering is resulted because the expansion of the luxury client base and the subsequent lowering of the entry barriers to this industry. More and more people can afford luxury goods and aware by continuous updated fashion information. Therefore, the driving force has been controlled by client and the ‘top-down ’relationship that has existed for centuries with luxury brands has shift to a

‘bottom-up’ affiliation where the client has become as important as the product.

Furthermore, in terms of consumers’ perception, Bruce Himelstein Executive Vice-President at Zimmerman Advertising said that luxury has become a dirty word. Few years ago in the global financial crisis, AIG ask to borrow money from American government, but the high level supervisors were playing golf while the whole country suffer high unemployed rate. Again, From Wall Street to Main Street everyone has felt the crunch of the economic crises because the “Fraudulent Bankrupt” of Lehman Brothers. But these financial agents still enjoy their fortune while people lose their jobs.    

Recession Challenges for Luxury Brands- Bruce Himelstein
http://www.trendhunter.com/keynote/bruce-himelstein2

Therefore, it is time for luxury brand to find out “who are we”, and reposition their core value because customer have changed and look for real value.

reference:

http://inphobe.blogspot.com.au/2009/04/rich-people-feel-guilty-buying-luxury.html

http://www.thephuketinsider.com/tourism/luxury_becomes_a_dirty_word.php

http://www.trendhunter.com/keynote/bruce-himelstein2