Monday, 30 November 2009


Claudia D'Arpizio, luxury goods expert and author of Bain's 'Luxury Goods Worldwide Market' study, identifies there are five major shifts in luxury shopper behavior moving into 2010:
  1. Reaching lower. Consumers who are newly entering the luxury market, called 'accessible luxury' consumers, are purchasing items at the lower end of brands' product lines,
  2. Seeking intrinsic value. The most affluent, or 'absolute,' luxury shoppers have begun to focus on the intrinsic quality of materials and the durability of luxury items instead of fashion content,
  3. Buying the experience. Experiences are in. Consumers who value the dream offered by luxury brands, called 'aspirational' consumers, are increasingly motivated by service and in-store events as much as by merchandise,
  4. Spending discreetly. Ostentation is out. Consumers are gravitating to more discreet products, preferring understatement in what they buy and how they shop in luxury stores to high visibility items,
  5. Fleeing to value. Many shoppers across all luxury segments now wait for deeper discounts at the end of the season, or seek out discounts at department stores and outlets.
In order to address this reality, marketers are employing “guilt” in ways we’ve never seen before.   In fact, 2010 is shaping up to be dominated by guilt. Guilt for spending money in the midst of a debilitating global recession, guilt for further polluting the world, guilt for moving farther away from those traditional values that were previously the exclusive domain of the family.

Brands that are able to elicit guilt - or even better, remove guilt - will be the winners. For example, some luxury brands are emphasizing marketing tactics that they hope will push away the guilt and reboot consumers' desire to spend. That can mean touting a special justification for splurging - profits are channeled to a charity, for instance - or offering novel shopping experiences that can make people forget their guilt.

Some brands are trying to catch consumer’s off-guard with new outlets for selling. Ittierre, for example, is considering having some fashion brands open pop-up stores - boutiques that exist for a few weeks or months - in unexpected parts of European and U.S. cities that aren't traditional luxury shopping districts. The idea is that pop-ups may not activate the psychological barriers that prevent shoppers from entering traditional stores.

Other brands are encouraging Internet shopping to help break old shopping habits. "Luxury shame" - epitomized by the showy act of walking out of a fancy store with a big shopping bag – is one of the main reasons for the estimated 20% jump in online luxury sales this year, Bain & Co.

Another tactic for taking some of the guilt out of shopping - offering a charitable-giving component - is gaining traction as well, especially ahead of the holiday shopping season when people tend to feel the most pressure to donate. Shoe brand Cole Haan recently sponsored a typical promotion: Get a 15% discount on a new pair of shoes when you donate an old pair to a designated charity. Such incentives could help with the argument shoppers have with themselves.

One of the hottest new stores in Paris this year, Merci, fuses fashion with philanthropy. The store's light, loft-like space is as trendy as that of other concept stores, selling apparel from brands such as Stella McCartney, flowers and used books. The difference is that ALL of the profits, after operating costs are paid, go to children's charities. Last month, Merci - which was founded by Marie-France Cohen as a way of giving back after she sold luxury children's-clothing label Bonpoint - opened a temporary one-month shop in New York with help from the Gap.  The charitable argument may give consumers another reason to visit the store as a consumer who is tempted by an item goes back to being just a consumer.
Other companies are putting more emphasis on the "guilt-free shopping" that is said to come with buying environmentally safe products. Stores are even offering to ameliorate the global problems of waste and - interestingly - overconsumption. Last year, upscale Swedish clothing brand Filippa K opened a secondhand store in Stockholm that sells used of its own brand for at least 50% off.  Even with a discount store offering items at 50% off, the boutique has boosted sales of the current collections as their customers see them as “a part of the solution” and “taking more action”. While a socially redeemable activity, this is, is of course just another tactic for taking some of the guilt out of shopping.
What is your brand doing today and over the next twelve months to lessen the guilt of those purchasing your brands products or services?