Why does it seem that many luxury brands are recession proof?
According to a recent report in the San Antonio Express News, 1,300 jewelry stores closed in the US with a record number of industry bankruptcies. However, Tiffany-known for luxury-had a sales jump of 17%. Nordstrom's too climbed 10.3%. Saks Fifth Avenue and Neiman Marcus climbed 3% and 6% respectively.
Why is this news and why is it important? For two reasons. First it shows again the staying power and survivability of luxury brands even in weak and tumultuous economies. But before I give my opinion on the second reason this is important to all of us (retailers, consumers, entrepreneurs and luxury lovers every where) let me offer the explanation given by Tiffany and cothe reporter as to why luxury brands hold their own during recessions.
The journalist credits the recent stock market rises, because, "wealthy people have a disproportionate amount of their assets in the stock market." But I'm not so sure that is the whole story as to why luxury continues to sell even during times of economic uncertainty. To be sure the wealthy, whom are the vast consumers of luxury products and services hav e a proportionally higher amount of activity in the stock market than other income classes. But there may tiffany and co jewelry be a few other pieces to this puzzle that need to be factored in.
For one, consider outstanding customer service? Is it coincidental that retailer's who are riding out the downturn successfully-albeit with fingers crossed and profits lower than anticipated-are also known for treating customers with unmatched service? Some retailers have never learned the difference between being greeted and being accosted. Or, simply expecting an honest answer and armed with the authority to do something about the memorized question at the cash register, "Was everything OK?"
In many struggling stores, you are either not asked, asked with annoyance or, if one should actually give a suggestion, complaint or need clarification, are responded to with horror and a look of inconvenience.
Also consider that the survivability of luxury brands may have less to do with 'price points' for the rich and famous and more to do with the quality of the product. In a tough economy, people tend towards one of two habits: buy as cheaply as possible or buy as quality conscious as possible. One can and will be replaced frequently but affordably; the other will be purchased with thoughtfulness and even a little up front pain, but with the assurance there is a minimal need for replacement or repairs.
We unfortunately live in a 'blame tiffany jewelry others' society. When success is achieved and the numbers verify that profitability wasn't a fluke or simply clever marketing campaigns, perhaps we should again look at the soul of success: were needs met and were customers pampered and treated with dignity and respect?
Michael Lindquist is an entrepreneur, CID, author of several books and publications and a luxury aficionado. He is the CEO and co-owner of Crown Luxuries located in San Antonio which sells an eclectic array of fine furniture, antiques and home furnishings. Also available at our shop is San Antonio's exclusive, "Pillow Bar", where custom crafted, Hungarian goose tiffany outlet down, monogrammed pillows are made for you, right on the premises.
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