Some luxury brands have seen growth slowing, while “affordable luxury” is on the rise.
“Even Kanye Thinks ‘Luxury’ Has Become Code For ‘Rip-Off’” declared a Time headline last week, noting recent comments from the musician as well as U.K. designer Jasper Morrison, who told The Wall Street Journal that luxury “invariably stands for overpriced, poorly considered product, whether it’s a hotel, an apartment block, a handbag or a holiday.” It seems that more consumers are inclined to agree. Some luxury brands have seen growth slowing, while “affordable luxury” is on the rise.
“Bridge brands” like Michael Kors, Kate Spade, Vince or Karen Millen in the U.K. are doing well. Michael Kors saw same-store sales rise 26 percent year-over-year in its March quarter, while sales at Kate Spade rose 33 percent last quarter. More consumers may be looking to Live a Little—as we phrased one of our 10 Trends for 2012—and splurge on moderate amounts of luxury. That helps to explain why more drugstore products from brands like L’Oréal and Johnson & Johnson are boldly pushing prices to $25 and beyond for goods with premium ingredients, as The Wall Street Journal reported.
Another driver here is that mass-market consumers are getting more discerning and demanding. Mass-market brands have to amp up their offerings. The luxury perfumers at Robertet Fragrances recently developed an affordable line to be sold exclusively at Target. Automakers such as Hyundai have begun to standardize features that were once higher-end options, from satellite radio to heated side mirrors. Everyday foods and beverages from beer to coffee are now artisanal or “craft.” Even hostels are going upscale—known as “poshtels.” Brands must increasingly cater to consumers looking for the best of both worlds: prices that aren’t sky-high for products that offer at least a taste of luxe.
Image credit: Target