'Tis the Season ... to Live It Up
Luxury Goods Attracting More Consumers
NEW YORK, DEC. 6, 2003 (Zenit) - The usual concern over excessive consumerism at Christmas has a new twist this year: the growing popularity of luxury brands. A recent book, "Trading Up: The New American Luxury," observed that people are increasingly disposed to pay higher prices for what they see as premium products.
Coining a new phrase, authors Michael Silverstein and Neil Fiske examine how "New Luxury" goods and services are attracting middle-market consumers. "America is trading up, and it's good for both business and society," write Silverstein and Fiske, a senior vice president and ex-partner, respectively, of the Boston Consulting Group.
Consumers of these New Luxury goods fall in the income bracket of $50,000 to $200,000 a year. Some 47 million U.S. households have an annual income of $50,000 or more, and this adds up to nearly 122 million consumers "with the means and the desire to trade up," the book says. In 23 categories of consumer products and services, worth $1.8 trillion in annual sales, New Luxury products account for 19% of the total, with annual growth of 10% to 15%.
The luxury goods include even otherwise mundane household needs. A prestige trademark washer-dryer, for example, sells for more than $2,000, compared with conventional brands that retail for around $600. To their surprise, the authors came across numerous consumers from various backgrounds who assured them that possessing the higher-cost brand made them feel happier and a better person.
"In our fifty combined years of listening to consumers, we have never heard more heartfelt expressions of emotion about a product that even industry insiders think of as mundane and unworthy of much attention," marvel Silverstein and Fiske.
Other examples involve what are more commonly seen as luxury products. A premium set of golf clubs has seen one company soar to the No. 1 position in its field, when previously it was not even in the top 10. One consumer said that he had paid $3,000 for his premium clubs, as opposed to under $1,000 for a more conventional set, because "they make me feel rich."
The authors divide the New Luxury products into three major types. The first type is the accessible super-premium products. These are priced at or near the top of their category. But, being low-ticket items, they are still affordable to middle-market consumers. Example: a $28 bottle of premium vodka, as opposed to $16 for more ordinary brands.
The second type is the old luxury-brand extensions: lower-priced versions of products for the rich. Popular items here include cheaper models of top-range cars.
Third is the "masstige" goods, a term the authors use to refer to mass prestige goods that occupy a spot between mass and class and command a premium price. For example, toiletry products that carry a fancy brand name can mean a price difference of over 200%.
Fulfilling emotional needs
What is the appeal of New Luxury goods? The authors observe that they are typically based on the emotions and that consumers have a much stronger emotional engagement with them that with other goods. This compares to the very expensive old-style luxury goods that are based primarily on status, class and exclusivity. As well as the emotional factor, a New Luxury good must also have differences in design or technology.
Once consumers become convinced of the superiority of a product and form an emotional attachment to it, they are prepared to spend a disproportionate amount of income on it. This is done by scrimping on other expenditures. These consumers thus avoid middle-range products, trading down in some areas to save money, and in others going for a higher-price item.
Behind the New Luxury trend lie demographic and cultural causes. In terms of income, the earnings of the top quintile, households over $82,000, have risen nearly 70% in real terms over the last 30 years. As a result, now 21 million affluent households account for nearly 60% of discretionary spending power in the United States.
Another factor is the increased economic power of working women that has seen the number of two-income households rise dramatically. There are also more affluent singles with money to burn, as people delay entering marriage, or find themselves divorced and single once more. And the globalization of trade has made it easier to supply exotic products.
In terms of cultural factors, the authors note the increased number of consumers with university degrees and the growing numbers who have traveled overseas and discovered new tastes. Added to this is an increasing weight given to emotional self-satisfaction: "[W]e all receive countless messages every day -- especially from media influencers and celebrity endorsers -- urging us to reach for our dreams, fulfill our emotional needs ..."
The New Luxury phenomenon is not restricted to the United States. The National Post newspaper in Canada on Oct. 18 described the growing popularity of luxury products for babies. Stroller prices can reach $500 or $600 Canadian (US $383 to $460), or even up to $6,000 for some models. Designer-name diaper bags can retail at $1,000 (US $771) or more, while rattles can fetch $160 to $320 (US $122 to $245).
Italy too is seeing a boom in luxury items -- even amid a stagnant economy. The daily Corriere della Sera on Nov. 24 noted how a growing number of people in the 40,000-euro-and-up income bracket ($48,300) are prepared to splurge on expensive items such as second or third cars. Favorite purchases include Jacuzzis (17,000 sold last year); plasma televisions, at 8,000 euros ($9,569) each; and home cinemas that cost up to 25,000 euros ($29,900).
Being and having
John Paul II's first encyclical "Redemptor Hominis" echoed the Second Vatican Council's insistence on the importance of "being" over "having." The encyclical, in section No. 15, warned that modern progress demands "a proportional development of morals and ethics," which he observed seems "unfortunately to be always left behind."
The Pope asked if this progress really makes human life "more human" and more "worthy." In some areas it does, he replied. But he questioned whether, in the most essential facets of human life, we are becoming truly better, more mature spiritually, more aware of the dignity of our humanity, more responsible, and more open to others, especially the neediest.
John Paul II also asked if, amid material progress, there is a growth of social love, of respect for the rights of others -- or if there is an increase in selfishness. This materialism, he warned, can lead us to becoming slaves of our own products.
"Where your treasure is, there will your heart be also," warns Jesus in Matthew 6:21. Timely advice for brand-conscious consumers.
http://www.catholic.org CA, US
Catholic Online - Publisher, 661 869-1000
Christmas, Consumer, Goods, Products, Luxury
More Catholic PRWire
Showing 1 - 50 of 4,718
A Recession Antidote
Monaco & The Vatican: Monaco's Grace Kelly Exhibit to Rome--A Review of Monegasque-Holy See Diplomatic History
Dna. Maria St. Catherine Sharpe, t.o.s.m., T.O.SS.T.
A Royal Betrayal: Catholic Monaco Liberalizes Abortion
Dna. Maria St.Catherine De Grace Sharpe, t.o.s.m., T.O.SS.T.
Embrace every moment as sacred time
Mary Regina Morrell
Letting go is simple wisdom with divine potential
Mary Regina Morrell
Father Lombardi's Address on Catholic Media
Pope's Words to Pontifical Latin American College
Prelate: Genetics Needs a Conscience
State Aid for Catholic Schools: Help or Hindrance?
Scorsese Planning Movie on Japanese Martyrs
2 Nuns Kidnapped in Kenya Set Free
Holy See-Israel Negotiation Moves Forward
Franchising to Evangelize
Catholics Decry Anti-Christianity in Israel
Pope and Gordon Brown Meet About Development Aid
Pontiff Backs Latin America's Continental Mission
Cardinal Warns Against Anti-Catholic Education
Three words to a deeper faith
Relections for Lent 2009
Wisdom lies beyond the surface of life
Mary Regina Morrell
World Food Program Director on Lent
Pope's Lenten Message for 2009
Keeping a Lid on Permissiveness
Glimpse of Me
The 3 stages of life
Sex and the Married Woman
A Catholic Woman Returns to the Church
Modernity & Morality
Just a Minute
Catholic identity ... triumphant reemergence!
Edging God Out
Burying a St. Joseph Statue
George Bush Speaks on Papal Visit
Sometimes moving forward means moving the canoe
Mary Regina Morrell
Easter... A Way of Life
Papal initiative...peace and harmony!
Proclaim the mysteries of the Resurrection!
Jerusalem Patriarch's Easter Message
Good Friday Sermon of Father Cantalamessa
Papal Address at the End of the Way of the Cross
Cardinal Zen's Meditations for Via Crucis
Interview With Vatican Aide on Jewish-Catholic Relations
Pope Benedict XVI On the Easter Triduum
by Catholic Online
- Inspiring martyred Oklahoma priest officially beatified
- Daily Reading for Tuesday, September 26th, 2017 HD Video
- St. Finbar: Saint of the Day for Monday, September 25, 2017
- Daily Readings for Monday, September 25, 2017
- Terrifying mass shooting at Nashville church leaves several injured
- In the Kingdom of God No One is Unemployed
- Daily Reading for Monday, September 25th, 2017 HD Video
- Woman photographs angel in flight, is it here to deliver a message? HD
- Daily Reading for Sunday, September 24th, 2017 HD
- Hurricane Maria: The worst disaster for Puerto Rico HD
- Daily Reading for Saturday, September 23rd, 2017 HD