Sunday, December 6, 2009
Luxury Makes a Comeback
Throughout the economic downturn, many people have sacrificed the more luxury items. Before the economic downturn, companies tried to get upper middle class people to buy their products - things that they couldn't really afford, but they bought to live the lifestyle they wanted. Now, the companies are going a different route to get new business in this time - and it's working. Sales are going up for many of these companies. They are increasing quality, and increasing price as well, but counting on the idea that people will spend more to get more. However, overall, sales are still expected to go down for the year.
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3 comments:
I think it will be interesting to see the spending behavior that ensues as the economy recovers. I definitely think people will be more careful about where they spend their money, but I'm surprised that some companies are already starting to introduce more expensive products. I wouldn't expect people to be willing to pay that right now, even if the quality is good, so it will be interesting to see how it plays out.
Before we talk about the spending behavior of the American public, we need to get an idea of their psyche. Since its boom in the last century, the American economy has been run by the consumerist attitude of the American Public. The need for bigger and faster cars, the need for bigger and more expensive houses, the need for a pair of Nikes' is what has driven this American economy to its heights making America a world superpower.
All this could not have been possible without proper planning and infrastructure. What other countries did not capitalize was the ground root level of infrastructure development. America does not have a massive population like China and India. However, it has the infrastructure to outpace any economy any time. True, times are bad today and the markets for many products are saturated. However, it is the great infrastructure that America has which will help it to come out its recent economic turmoil
This is quite an interesting article to see that some firms are beginning to develop their products into more luxury goods, despite the state of the economy and consumer spending showing small signs of recovery. It baffles me how firms facing lower sales are deciding to increase product prices along with product quality. However, the article did mention there are plenty of affluent consumers in the market who are willing to spend heavily.
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