New Luxury: Current Trends and Future Strategies
Date Issued
2008
Date
2008
Author(s)
Wamg, Tiffany
Abstract
Across the globe, the new luxury industry has seen remarkable growth and structural dynamism. The structure of the industry began to transform significantly over the past decade as the world’s consumers enjoy higher real income and as a result, they are willing to pay premiums of 20 to 200 percent for the affordable luxury offerings not found before in the mass middle market. With new luxury sales reaching $400 billion in 2003 in the US and on the rise, there is increased competition among marketers and tremendous opportunity to grow.he new luxury phenomenon is undeniable. In fact, there is a new egalitarianism or democratization of luxury developing over the past decade, which is pressuring the top-tier marketers to innovate faster and think quicker in order to stay ahead of the crowd. The new luxury market has experienced tremendous growth over the past decade and is growing substantially annually. The trends for the world mimic what is expected from the US where 47 million middle market households (defined as those with an annual income of $50,000 or more) desire new luxury products and services. Globally the trend is also on the steep incline with continued support from Europe and Japan and the emerging and considerable markets of China and India. ompanies at the new luxury forefront are achieving levels of profitability and growth beyond the reach of their conventional competitors. “Old luxury” was what was rare and hard to acquire because of its refined qualities. The good required the highest standards and talent to manufacture and included the best and often most expensive of materials and therefore the object was only available to the very rich. Today’s “new luxury" is readily available to the middle classes who have increasingly greater amounts of disposable income, time and aspirations. However you want to define luxury, though, one thing is certain: it is now commonplace and affordable. Disposable income has risen dramatically over the past 30 years and there is more money to spend on the extras.onsumers know what they desire and they must always look upward towards goals ahead of their reach. It is up to the luxurious brands to provide the symbols of achievement, the rewards of wealth, the ultimate experience and the long term satisfaction of ownership which is becoming harder and harder as more brands become accessible to the mass market. Companies should focus on their best customers and look for new and better ways to reach them. They must constantly innovate and improve the design and desirability of the product and experience.his thesis attempts to offer an analysis of the fundamental changes the industry is currently undergoing by addressing the major issues facing the new luxury industry and those who service it. Further, it proposes a few strategies that will help new luxury marketers and service providers remain competitive and successful.
Subjects
luxury
luxury industry
consumer marketing
brand strategy
Type
thesis
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