Observations

RAPAPORT… Over the past several years, luxury has been a buzzword in the retail industry. The branded luxury stores were flying high as status-conscious consumers with a seemingly endless supply of money shopped themselves into a buying frenzy. But then, abruptly, when the global financial crisis hit, luxury shopping also came to a halt — or at least a much less accelerated pace. Now luxury retailers find themselves in the awkward position of struggling  and losing money. So what happened? Luxury lost its luster. Luxury products have traditionally been defined as an item that is unique, rare, exclusive, of a certain quality standard, often prohibitively expensive to all but a select few and associated with a set of intangible lifestyle values that appeal to the brands’ customers.  But through the conspicuous-consumption years, luxury stores expanded into new markets, or turned aspirational and created new collections at more accessible price points and then put those lines out into mass markets. The result, in part, is that the market became saturated, and the product became less special. After all, if a retailer that has one to five stores globally suddenly has 25 stores, it becomes less exclusive, less rare. And certainly by dropping price points to attract aspirational shoppers, the brand took another step down. Now that times are tough, luxury retailers find themselves in a pretty pickle. There are too many outlets and not enough customers; the aspirational shopper has all but disappeared. Plus, products that can be easily found may be less desirable to the end consumer who wants the exclusivity that luxury offers. Perhaps returning to the core values of luxury — rarity and quality — will once again put the exclusivity back into the luxury market that makes those products so desirable.  

Amber Michelle
Editor in Chief