De Beers Luxury Report: Tastes Shifting To Long-Lasting Items

A De Beers-commissioned report on luxury consumption says buyers of high-end items are shifting their purchases from “conspicuous to discerning.” The findings tied in well with De Beers’ holiday marketing effort that aimed to drive diamond sales by promoting “few and better” gifts.

The report, “Luxury: Considered” by Ledbury Research, reports that the change in purchasing tastes comes against the backdrop of the global economic crisis and growing consumer fatigue with mass marketed luxury products.

According to their research, the shift is most pronounced in developed markets. By contrast, in emerging markets, where purchases by the wealthy are primarily driven by conspicuous consumption, buying patterns are “transforming rapidly,” and are adopting to western purchasing patterns.

The report says the purchase drivers in developed markets are characterized by increased scrutiny of product quality, authenticity and value for money; a greater appreciation of artisanship and fine craftsmanship; renewed calls for exclusivity and deeper brand experiences and a heightened awareness of social and environmental responsibility.

The report concludes that the shift has significant implications for the way luxury players will do business in 2009 and beyond. In particular:

• Discerning luxury consumers will create a market for more high-end, high-experience products presenting new business opportunities for brands.
• As luxury players transform and new niche labels emerge capitalizing on the opportunities, competition for luxury spending will intensify.
• Product sourcing and supply chain standards will come under increased scrutiny as further demonstration of the luxury commitment to excellence.
• Success will lie with the brands that can drive customer loyalty by responding to the demands of the new, discerning consumer.

According to De Beers Group Executive Director Stephen Lussier, in uncertain times, luxury consumers gravitate toward fewer and better quality items. “This dynamic shift will have a lasting impact on the way luxury companies do business,” said Lussier. “This is particularly relevant to De Beers Group because we believe diamonds occupy a unique role in this new reality."