The effects of the changing environment

The results of the changing definition of luxury and other phenomenal transformations in the luxury sector are several. However, chief among these is clearly described by the frequently used phrase 'the democratization of luxury'. This expression means that luxury goods or goods that resemble luxury goods are now available to an increased number of consumers. This visible fact is also seen in the current consumer behaviour of 'trading down' in some categories of goods like basic consumer products in order to 'trade up' to acquire luxury goods. This behaviour is more evident among the new wealthy middle class with a higher disposable income than the middle class of the previous centuries. This group of consumers are also called the 'luxury mass class'.

Having seen the causes of the redefinition of luxury and how these are influencing the sector shifts, it is worthwhile to take a look at the effects they have on the market. This examination will act as an indicator of how the challenge of managing a modern luxury brand can be overcome.

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