Is the Luxury Market Dead?

Luxury goods are items that are not considered necessities of life and are generally thought to be used by the rich and affluent.  Therefore, water, a necessity, champagne, a luxury item.

While it would have seemed fairly self explanatory of what luxury goods are truth be told most of us live in luxury that our great grand parents would have been in awe of.  It is not unusual for people that live below the median income level to own cars, have television sets, cell phones, computers and air conditioning.

If your great grand parent was a dirty farmer in the depression, try explaining to them how you  have no luxury in your life and they will laugh in your face.

The luxury market started in the 1800's with department stores that catered to the rich. In their marble and gilt stores you would be sold the finest of the fine, cashmere, wool, silk, from the best sources, dry goods from prestigious makers, foods from the most expensive stalls. These stores were so exclusive that there would be doormen ready to stop anyone who was not dressed in fitting style from getting in.

Of course once a store became exclusive then the middle class was determined to gain entry.  As the standard of living rose in the middle class proprietors of luxury good realized that there was an untapped markets for items that they could previously only sell to the well to do. Suddenly it wasn't so bad to let the masses buy at the same stores the wealthy did.

The prestige of high class stores remained high for decades and then came the marketing booms in the 70's. This is when high end retailers realized that not everyone could afford a $5000 evening dress, but they could afford a $50 bottle of perfume. While the ingredients in the perfume might come out to only pennies the money spent on marketing and keeping the prestige of the brand name would cost hundreds of thousands if not millions of dollars a year.

Did quality suffer? Of course, this was the beginning of the perception of luxury instead of luxury itself when they would slap a designer label on everything from belts to perfume to furniture and keep the prices high. Unfortunately the public will eventually catch on as Pierre Cardin found out and his luxury style became a industry joke for over licencing.

Two things have really ruined the luxury market, one is that luxury brands, for the most part are being made in China and the flood of knock offs in the market.

When pushing items on to the middle class the price points had to be a bit lower than what they would charge for their high end goods. The easiest way to do this would be to outsource manufacturing to places like China. There are items of very high quality that come out of China but for the most part when luxury items are made there they are trying to squeeze every penny of profit out of the items and quality is often diminished. 

Knock offs are also the bane of the luxury industry and can ruin the reputation of quality items. Most people now assume when they see someone with a Louis Vuitton handbag that it is a knock off because the market was flooded with them.

So is the luxury market dead? No, it never will be. There will always be people that the brand of the product will be more important to them than the actual quality but the luxury market has taken a big hit due to the drop in the economy and consumers becoming more savvy about quality.

It is never a good idea to buy a knock off, the quality will not be there at all and it truly is a case that you will get what you pay for. You should also not assume that anything with a prestigious name will be made in high quality, check to see where it is being manufactured.

You can live the luxury life style without doling out the huge amounts of cash if you are careful about it and know what to look for.

Want to stay in that 5 star hotel but at a discount? You could stay in off season or look for deals on line. If you want to eat at that luxury restaurant then remember that the lunch menu will always be cheaper than the dinner menu and you will drinking less alcohol (or none at all) in the middle of the day. Fine Italian leather goods can be bought for less if you steer away from the designer names and look for quality products made by smaller manufacturers.

Luxury is still available to all of us if we stop thinking about luxury as a brand.

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