Mktg – Synovate Study on People & Luxury
MUMBAI: People have an odd relationship with luxury.
According to a recent study by global market intelligence firm Synovate, two in every three people across 11 markets treat themselves to luxury every now and then while one third feel guilty about it.
For Indians, it is an absolute pull factor wherein the consumers have read about the product and have made informed decisions about luxury buying – more for its aspiration value, preferring logoed items.
Said Synovate CEO for the UK and luxury research expert, Jill Telford, “Of course a recession makes luxury retail even more challenging – selling things that arguably people do not need during a time when many are at least morally forced to examine their spending patterns makes for interesting times.The luxury marketers that are doing well are doing so by knowing their markets and positioning their products just so.”
The Synovate survey takes a look at luxe dreams, extravagance, indulgence and the finer things in life. What do people feel when they buy luxury? How do they treat themselves? And what is their luxury brand shopping style? The company spoke with over 8,100 people across 11 very different markets.
A lingering look at luxury
But first, what is luxury? Do people define it as the feel of cashmere on your skin, the joy of time to spend as you wish, or the pleasure of showing your success in life? The survey shows it depends where you live.
The top three results across all 11 markets were:
Luxury is everything over and above what you need – 35 per cent
Luxury is a lifestyle – 17 per cent
Luxury is time to do exactly what you want – 16 per cent
But it’s far more telling to look at the market-by-market results.
Nearly half of all Dutch respondents (49 per cent) took the practical view that luxury is everything over and beyond what is needed.
Synovate Netherlands researcher Karen Oerlemans said, “Being a small country in the periphery of Europe, the Dutch have developed a strong critical attitude against everything that is bigger, better, more powerful, or just ‘more’ than the norm.
“The Dutch dislike people with tons of attitude. People who do flash their wealth with big designer logos are frowned upon. This attitude translates to the way the Dutch look at luxury goods. They buy luxury because it makes them feel good. It is not about the reputation of the brand or to flaunt it to others. Luxury is not a way of life.”
Contrast to this is Brazil, where luxury retail is relatively new and growing fast. 24 per cent of the Brazilian respondents (the second-highest) agreed that luxury is a lifestyle.
Explained Synovate Brazil head of client relationships Jesus Caldeiro, “The luxury market here is expected to grow over 12 per cent in 2009. More and more luxury brands are entering the country and, more importantly, the richest consumers are buying. As an example, it is expected that sales in the recently opened Hermès shop in Sao Paulo will soon top those in some more established markets.”
26 per cent of the United Arab Emirates (UAE) respondents agree that luxury is a lifestyle and director for client relationships in Dubai, Per-henrik Karlsson, said that media and advertising are geared towards luxury brands there.
“This creates aspirational behaviour among expats, tourists and locals alike. It starts even before you arrive, as the Emirates Airlines pre-landing video about Dubai is all about shopping, luxury cars and hotels. And once on the ground, it’s everywhere: the main highway is full of billboards advertising luxury brands. Even eating out in Dubai is part of this lifestyle, with some luxury brands operating their own food and beverage outlets in malls,” Karlsson said.
Another possible answer was ‘Luxury appeals to my senses… it is beautiful fabric, delicious food and so on’ which was chosen by 18 per cent of respondents in both the United Kingdom (UK) and France, the top responses for that definition… possibly for quite different reasons.
Director of development for Synovate in France, Alain Denis, agreed, “The French people are certainly hedonistic; they love to enjoy ‘small pleasures’ like a good smell, or the softness of a scarf, and of course cooking and eating.”
Telford suggested the British response is probably more to do with food and taste than the other senses.
Telford said, “The UK can be quite austere about some luxuries but eating is a pleasure that is allowed and encouraged – much more than ‘things’. London is a gourmet centre with every kind of food specialty you can imagine.”
The top answer in India was ‘Luxury is more about quality than it is about price’ with 28 per cent choosing that definition.
One could argue that the overarching purpose of luxury is to make you feel good…but not for 32 per cent of the respondents.
Two in three people treat themselves with luxury every now and then, but nearly a third of people across 11 markets then feel guilty about it. So, who are the most conflicted consumers of luxury?
Telford said: “It’s the Brits of course. While 72 per cent say they treat themselves with luxury – and make no mistake, luxury is seen as a treat in Britain – the Brits were still the most likely to agree that they often feel guilty if they buy something luxurious for themselves (50 per cent said they did).
“It’s a classic case of British guilt. It’s seen as much more acceptable to buy something ‘needed’ for the home than it is to indulge yourself in any way,” Telford added.
What’s more, it is British women who top the guilt scale, with 66 per cent feeling bad after a luxury purchase versus 37 per cent of British men. A similar pattern can be seen in the second-most guilty nation, the US… 58 per cent of American women beat themselves up after a lavish buy versus 35 per cent of their male counterparts.
Telford added: “It’s a real hangover from days-gone-by, but many women have difficulty putting themselves first. As a consequence they are more likely to quash the urge to spend by buying something for someone else, or if they do engage in ‘stealth’ luxury buying for themselves, they don’t enjoy it as much as they should.”
Said Synovate head of the consumer and retail industry sectors for US Mark Berry, “The luxury goods market in the US has been hit hard by the economy. Many retailers have now designed product and pricing strategies that appeal to a more austere, guilt-ridden consumer in search of the combination of premium products and value.”
At the other end of the scale, 74 per cent of Indians and 71 per cent in both Brazil and the Netherlands say they do not feel guilty after a luxury purchase.
Mick Gordon, managing director of Synovate in India, said a luxury purchase is a well-thought out purchase there.
“Indians will only splurge if there is money in the bank and they have considered all their options. There is less dependence on plastic money than in other nations and therefore no reason to feel bad afterwards.”
Similarly, Oerlemans said: “In general, the Dutch are sensible about spending their money: they are not living above their means. So if you can afford it, why feel guilty about it?”
Caldeiro added Brazilian hedonism prevents the possibility of guilt. “Brazilians take great pleasure in life, enjoying it and whatever they can afford whether it’s a big ticket item or not. The reward and pleasure of consuming a luxury (however big or small) far outweighs any negative feelings.”
For many, luxury just is. You should not show a logo. For others, it’s all about the logo.
Overall, 47 per cent across all 11 markets say they prefer to buy logoed items, 34 per cent would choose non-logoed items and 18 per cent don’t know.
Showing a classic divide in luxury attitudes, the markets that most prefer logoed items are all places where it is acceptable to flash purchases (and that’s sometimes the point!), topped by India (79 per cent), Hong Kong (68 per cent) and the UAE (58 per cent).
The markets that are more likely to appreciate a subtle luxury purchase, preferring non-logoed items, are Brazil (51 per cent), France (47 per cent) and the UK (46 per cent).
Gordon said of the India result: “Indians with deep pockets and those who have attained a certain social status splurge on luxury items to make a statement – flaunting labels enhances the perceived ‘value’ of the individual among his peers and the society at large.”
The UAE is also all about the statement that an obvious brand makes. Karlsson said: “Showing off logos is not seen as bad taste; whether it’s old or new money doesn’t matter nearly as much as simply having money! In fact, another newly popular trend here is buying brands that sport oversize logos, like certain shirts – the more ostentatious, the better.”
Telford said: “The UK result doesn’t surprise me – they don’t encourage showing off here. Of course, in Hong Kong, flashing your purchases and spending power is more than acceptable.”
“In France, there is no need to show others that you can buy brands. What is important is that you appear smart and elegant. Of course fashion is important, but no bling please,” Denis added.
Is it for pleasure or treasure?
So what do people most enjoy about buying and owning luxury? Do they see dollar signs and brands, or simply feel fabulous, or both? The Synovate survey showed that the top three overall pleasures in buying and owning luxury are:
It makes me feel special to own it – 28 per cent across the 11 markets, led by the US at 45 per cent and the UK at 44 per cent.
The way it is made or feels – 27 per cent, led by the UK at 35 per cent and the US and France, both 32 per cent.
The reputation of the brand – 14 per cent, led by 28 per cent in India and 20 per cent in each of France and Hong Kong.
Telford said: “UK people have fewer luxury items than say, Asians, as it’s not such a common thing here to buy luxury products, so they probably treasure them more.”
Hong Kong’s qualitative director Salina Cheng concurred: “Being able to buy and own something from a luxury brand is a symbol of status and wealth to Hong Kong consumers. Reputable brands such as Louis Vuitton and Chanel are most sought after and appreciated by the general public. They are preferred as they are considered a ‘safe choice’ to impress other people.”
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