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    Luxury From Ownership To Experience Four Trends To Promote Consumer Regression

    2012/6/13 11:10:00 18

    Luxury GoodsLVMH GroupInternational Luxury Business Association

    Consumers are rapidly from owning.

    Luxury goods

    Turn to experience luxury.

    Suppliers of high-end products such as watches and handbags can miss a huge growth opportunity if they are not smart enough to respond to customers' new tendencies.


    The above findings are from the latest research report of the Boston consulting firm (BCG) on the global luxury market: the return of luxury goods: how enterprises should deal with higher requirements for luxury goods sales.

    The report points out that experiential luxury goods account for about 55% of the total global luxury consumption, which is 50% faster than that of luxury products.

    Even in the Chinese market keen on brand, though the annual sales growth of personal luxury goods regarded as status and success is 22%, experiential luxury goods still dominate, with annual sales growth of 28%.


    "More and more luxury consumers tell us that they like a satisfying experience," said Mr. Jean-Marc Bellaiche, senior partner of BCG in New York office.

    But if luxury companies want to take advantage of this "experience" trend, they must attack quickly and take effective actions.

    So far, only a handful of enterprises have successfully added experience elements to their products and services, websites or store execution.

    Although the lack of experience elements may not have damaged the financial situation of luxury suppliers, companies have missed an opportunity to improve their performance.


    BCG and Ipsos, a professional research firm.

    International luxury goods business association

    (International Luxury Business Association) conducted a survey on 1000 well-to-do consumers in eight developed markets (France, Germany, Italy, Japan, Korea, Spain, the United Kingdom and the United States) and four emerging countries (Brazil, Russia, India and China).

    The survey found that the total annual consumption spent on the luxury goods defined by these consumers is now up to US $1 trillion and 400 billion.

    These include Over 770 billion dollars of luxury experience consumption, nearly $350 billion of luxury car consumption, and the rest are personal luxury items such as watches, handbags and footwear.


    Luxury experience business is not confined to exclusive artwork, hunting and spa.

    Some hospitals provide luxurious accommodation, including housekeepers, professional chefs and marble bathtubs, while some airlines are also offering private suites. Some luxurious high-rise apartments offer movie projection rooms and virtual golf facilities.


    The four trend is pushing consumers towards experiential luxury:


    1) the impact of demographic structure.

    In developed economies such as the United States, Japan and Europe, consumers who promoted the luxury boom in 1990s are now stepping into retirement age.

    They no longer need and do not want to have new "objects", which makes them the main customers of experiential luxury goods.


    2) changes in consumption patterns.

    When the middle class consumers in the fast developing market become richer and buy luxury goods for the first time, they are attracted by the well-known brand durable products.

    But as time goes by, they tend to change from accumulating material products to buying new experiences, which is reflected in the recent growth rate of experiential luxury consumption.


    3) Y generation's unusual way of doing things.

    Members of the Y generation are now about twenty years old.

    Their definition of themselves often depends more on their achievements and experiences than on the goods they own.

    They are attracted by short-term pleasure and luxury experience, such as helicopter skiing in Alaska or shopping in Paris in the weekend.


    4) seek lasting satisfaction.

    Consumers say they are seeking a stronger sense of purpose and satisfaction, and luxury experience can better satisfy these aspirations than buying luxury products.


    "The luxury consumers around the world tell us that compared to clothes and jewelry, they are more willing to spend more money on experience," said Michelle Eirinberg Kluz, one of the report's contributors and director of BCG.

    They have switched from "I and all my friends wear Cartire jewelry" to "I cherish the experience of spa with my friends."

    Although experience is not as real as merchandise, consumers think it is more unforgettable. "


    Leading suppliers of luxury goods also began to respond with caution.

    Such examples include:


      

    LVMH group

    It is one of the largest luxury goods companies in the world.

    The group is developing the franchise of the Cheval Blanc hotel.

    LVMH group has opened a white horse Manor Hotel in the French ski resort Courchevel and Maldives.

    The group plans to open more white horse manor hotels in Oman and Egypt in 2012.


    BMW, a German automaker, is one of the first high-end car manufacturers to enhance the delivery experience of new cars.

    The company has made consumers wait for the delivery process of new cars from a frustrating painful experience to a fun filled activity.

    BMW sends updates to buyers of Mini Cooper to help new owners understand the assembly process and experience of their Mini Cooper cars.


    The Swiss watch maker IWC has a clock Museum at its headquarters.

    IWC promotes its Pilot series watches at its flagship store in Hongkong. Customers can sit on a flight simulator equipped with large screen and surround sound to experience a "flying" trip.


    BCG believes that only a small number of enterprises have taken such measures, and the actions of enterprises are not fast enough.

    The pformation of consumers to experiential luxury goods will continue. Luxury suppliers must be able to keep up with this important consumption trend.

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