The personality and expectations of the luxury consumer are being shaped by several factors in the consumer market and general society, and an understanding of these factors provides an insight into the current consumer behaviour. More importantly, these factors are also indicators of the likely future behaviour of luxury consumers. The following are the factors that currently influence their behaviour:
1 The rapid growth of information, communications and mobile technology. It is no longer news that the Internet has changed consumers forever. The Internet has also changed business practices significantly. Consumers now have uniform and instant information at their fingertips everywhere in the world. The offerings from luxury brands are now in the public domain and consumers can access choices and alternatives at will. This has led to a desire and expectation of immediate solutions in terms of products and services. It has also contributed considerably to the 'brand-hopping' attitude and 'shopping-on-the-go' expectation of consumers.
2 The increase in individual consumer wealth and wealth-creation opportunities. A mass class of wealthy people have emerged the world over. At the beginning of the century, luxury consumers were a small segment of the global population. In the last four decades, however, an immense amount of wealth has been accumulated by individuals due to several economic, social and technological breakthroughs. Consumers are making money at younger ages, and they are also spending their money in a different way. They continuously have a penchant for luxury goods because as people get richer, they tend to spend proportionately less on necessities and more on luxuries. These luxuries include fashion, travel and property. In Europe, for example, the buoyancy of the luxury market is being driven by a steady increase in household income and the value of the property market. These newly wealthy consumers have replaced the traditional aristocratic consumers of luxury goods.
3 The increasing spending power of women. Women have become the major consumers of luxury goods as a result of their possession of more money due to increased education, career orientation and decreased financial responsibilities. Also women are marrying later, divorcing more and having fewer children, which has led to an increase in their disposable income. Women spend significantly more than men on luxury products and at the same time are influential in the luxury purchase decisions of men. Four out of every five luxury purchases are either made by women or are controlled by women. Since women are working and earning more money, their impact on the current and future luxury retail market is important. An increase in international travel, intercultural exposure and artistic exchanges. Consumers are travelling a lot more than in the past and gaining insight and interest in new practices and ways of life. For example, groups of Chinese tourists can be spotted everywhere all over Europe and the rest of the world; Americans are leaving home more and the European Union has opened up its national borders. It is also important to note that tourists around the world are responsible for approximately 25 per cent of the world's luxury goods purchases. Increased travel and cultural interactions lead to more varied material cravings. Also, the mind education gained through travel has increased the expectation of originality and substance of consumers towards luxury brands. Media saturation and information overload in the marketplace. The commercial environment is congested with information screaming for the attention of the same consumer. As a result, consumers have to process multiple advertising information channelled towards them on a daily basis. There seems to be an advertisement in every visible public space. Luxury brands have also begun advertising their products at bus stands and on street billboards in a bid to catch on with consumer goods advertisements. This has led to mental fatigue of consumers, who therefore choose the messages and brands that have some meaning to them. This factor emphasizes the importance of having a brand essence. The changing retail environment. Luxury goods are now accessible to more consumers through what has been popularly termed 'The Democratization of Luxury'. This means that mass premium brands like Zara and other retail discounters such as Primark have made it possible for consumers to have replica luxury products like clothes and accessories, at lower costs. When consumers have the possibility of spending less on clothes from Zara, they are likely to be able to afford more luxury products in other categories such as leather goods and jewellery. Also, several luxury brands such as Armani have extended their product portfolios to include lower-priced ranges.
The increase in consumer credit and payment options. This includes credit cards, store cards, fidelity cards and affinity cards. The use of consumer credit for luxury purchases has increased significantly in the last decade, which not only buoys the retail market and economic environments but also provides consumers with independence and higher spending power.
The effect of immigration and mass movement of consumers. Across Europe, America and in other parts of the world, the increase of immigration has diversified the ethnic make-up of local populations. This is
especially evident in the United Kingdom, where immigrants from India, Pakistan and the Caribbean have helped shape the national culture and identity. Their influences have affected the fashion styles, tastes and product preferences of the entire country. Also in France, the effects of the dress culture and style of immigrants from North Africa and Asia is gradually being reflected in the French fashion style. The case is similar in other parts of Europe and America, notably the USA and Canada. This factor has created new expectations and success opportunities for new luxury brands, and has also led to globalization of fashion tastes. The lowering of the entry barrier to the luxury goods sector. The highly protective luxury goods industry has opened up. New luxury brands such as Jimmy Choo, André Ross and Paul & Joe have emerged, creating more competition for brands and more choices and variety for consumers. These brands have also proved to up-and-coming designers the feasibility of launching a new luxury fashion brand in the twenty-first century.
The increase in outsourcing of the manufacture of luxury products and services. Several luxury brands manufacture their products in Asia, East Europe and South America where labour costs are substantially lower than in their home countries. This has created cost-saving opportunities for the brands but also a loophole for the manufacture of counterfeit luxury goods. Also luxury brands are increasingly outsourcing their customer services through independent call centres, which leads to cost-saving but might also result in sub-standard services and unmet consumer expectations.
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