The definitions of luxury and necessity, in these perilous and depressive economic times of the “new normal,” are changing both if you are affluent and if you are not-so-affluent, according to an AdvertisingAge news report.
For many, simply receiving a regular paycheck for a regular job with some benefits would be a great luxury, but unemployment is not what the AdAge report addresses.
Luxury or at least the pursuit of luxury is an integral part of the lives of nearly everyone, according to the article, Affluency: New Definitions of Luxury, which focuses on “Affluents,” or adults living in households with at least $100,000 in annual income. It summarizes a presentation based on Ipsos Mendelsohn survey data that says some 94 percent of Affluents have purchased and intend to purchase luxury items in at least one of 15 categories.
The AdAge article continues: “But there’s no denying the changes wrought by the economic downturn: 65 percent of Affluents, for example, agree that “the definition of luxury today is not the same as it was five years ago.” The desire for luxury experiences has not disappeared, but has been redefined for a new era. The bar has been lowered in terms of what constitutes a luxury, and expressions of luxury have become smaller, more personal and intimate.”
Affluents are a contradictory lot, according to the survey findings. Value continues to play a crucial role in today’s conception of luxury, with 89 percent of Affluents saying that “when I decide to purchase a luxury item, I go out of my way to find the best price possible.” But in contrast, less than one in four say that “if a luxury product goes on sale, it lessens the perception of luxury.”
Luxury when it comes to brands is different things to different people. Many in the survey cite the usual suspects such as Mercedes, BMW or Lexus as their most recent luxury purchase, but others said their luxury purchase was a Mini Cooper or Prius.
But ratchet up the income threshold to $250,000 or more annually and the interest in luxury purchases increases markedly. “For example, 30 percent of those with annual household income of $250K+ will become more interested in luxury autos in the next six months, compared with 6 percent who will become less interested,” the survey says. Similar figures are found in categories as diverse as travel, dining and electronics.
Recession retrenchment continues for most Americans, who are paring down the list of things that were once considered necessities or luxuries out of economic necessity. But that only goes so far as one advances up the affluence scale. That’s why AdAge says purveyors of luxury goods and services have “reason to be optimistic” even as the definition of luxury changes.
[Image Credit: The Ultra-Luxury Maybach Zeppelin by Denis Giles, via Flickr Creative Commons]