Written by Sophie McGovern
If seems that the current financial climate isn’t raining on everyone’s parade, and certainly not that of luxury goods retailers selling items such as hair and beauty products, specialist alcohols and chocolate. In fact, little luxuries seem to be the current treats of choice, with shoppers continuing to buy small premium pleasures despite the difficult financial climate. English companies such as Hotel Chocolat and Westons Cider are thriving examples of this, as are companies offering unique experiences to customers such as dining and excursion packages. In a recent survey, Management consultancy Bain and Company found that 50% of shoppers have bought luxury products over the past year and expect to spend more on them in the year to come.
This percentage far exceeds the number of shoppers who consistently buy within the traditional luxury market which includes jewellery, watches and high-end clothing. So what accounts for the triumph of little luxury treats and their continuing success in a broader consumer market?
Research indicates that the trend is not driven by exclusivity or image. Shoppers in 2012 are increasingly attracted to the quality of the experience offered by a product rather than conspicuous consumption, which has dominated the market over the past 20 years. The importance of brand image is being replaced by a desire for quality experiences. One of the key impacts of the recession has been to remind people of the value of money. Instead of being driven by the desire for status symbols and brands, consumers have become more interested in the quality they are receiving for the money they invest. Retail in 2012 is consequently experience driven- consumers are spending their money on transient luxuries which offer them pleasurable, high quality experience. Noesis Global Retail Trends state that shoppers are looking for three things in 2012: fun, experience and social currency.
Innovation is another key factor which has influenced the success of many luxury brands. Novelty and tailor made shopping go hand in hand with luxury, and companies who emphasise a unique and personal shopping experience are reaping the rewards. Hotel Chocolat are a prime example, their products changing with the seasons such as Christmas chocolates to Valentines chocolates to Easter chocolates and catering for all price brackets to show that their offered experiences are unique yet non discriminative. When shoppers are given the option to spend as little as £5 on a high quality, luxury product as opposed to a similarly priced mass market product then the novelty of the luxury brand prevails.
A company’s internal brand is also becoming ever more important, as staff and company story are increasingly central to marketing strategy. Consumers buy into the brand’s ethos and personality as well as the product itself. For this reason, the story behind luxury consumables such as chocolate and the ethical practises of a retailer are important in 2012 and are significant tools for attracting shoppers. In the long term, though, it is the quality of the product and experience offered that ensures the loyalty of the 2012 consumer.