The luxury market is lucrative for many reasons. Increased brand prestige and desirability means more opportunity for higher margins and your accountant will agree that leads to a bigger bottom line. Luxury brands are hyper sensitive to changing economic conditions and markets that were once golden gooses (read Chinese goose) are now questionable in best case scenarios. Luxury brands are in a unique position to capture more market share even during dicey economic conditions.
The catalyst for this article came from a recent conversation I had with a financial analyst who asked me about ?mass luxury?. I was a little light on the term myself so as any good journalist would, I Googled it and discovered a whole other side of the luxury business. No, mass luxury does not refer to Etihad?s new Airbus A380 super jumbo jet. The simple definition of mass luxury is the availability of luxury brands and services to a larger demographic of buyers.
For a more detailed and mechanical description The German luxury car way to define it is when a luxury brand, either established or not, offers a perceived premium or elite product or service at a value price point, sacrificing profit margin on each individual transaction in the hopes of recouping and profiting from increased demand and volume.
Some players play exclusively in the mass luxury demographic while new luxury brands look at the mass luxury category as a way to get ?their feet wet? and build that critical reputation and brand equity...