Luxury in the Economy

With the economy being branded in recession mode, one may wonder how the downturn has impacted the luxury market. According to the panelists of Beverley Hills Luxury Summit, while everyday Target shoppers might aspire to cut back on spending, the more affluent customers approach the recession with a different mindset.

According to DBI Vice President Judith E. Murphy, “Speaking from the top tier of American Express members, 84 percent of surveyed men and 70 percent of surveyed women are not expecting the economy to affect their spending habits.” Taking into consideration that the Platinum card member spends five times more than the average person, and the Centurion spends 30 times more, most luxurious customers do not believe that the recession is a serious threat to their established livelihoods.

The same approach to real estate also emerges. High-end Westside real estate sales over 5 million has actually seen a double-digit volume increase. Many of these buyers are found to be Canadian or Australian, which leads to the possibility of foreign customers playing a large part in the high spending arena.

Explains Emmanuel Perrin, President of Van Cleef & Arpels, which specializes in fine jewelry and watches, “Hong Kong and Macau are the destination of choice for clients, while Singapore is growing fast.”

Hence, a recession locally does not hinder the business with foreigners, nor does it hinder much of the business with wealthy locals, who still come back for more.

“The truly affluent multimillionaire will only look for that one quality, one value, and one service. If they find that it is an extraordinary experience, they will pay,” Murphy states. The truth is, if a business offers a direct address which targets the luxurious consumer, the customers choice will lie with the brand name and the trustworthy network of service they know they can expect.

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