What makes this market different from any other is the shopper; someone who wouldn’t hesitate to spend regardless of the economic outlook.
“Interestingly, luxury brands tend to get off relatively lightly in a recession,” explains Stephen Shortland, managing director at New Vision Packaging. “Generally, it’s an industry that targets people who are inherently ‘recession-proof’ – wealthier consumers with lots of disposable income who are happy to pay a premium for exclusively-priced brands. “According to a report by the Luxury Institute, the bulk of sales in the luxury sector come from just 20% of its consumer base.
That 20% are the super-wealthy – those who are the last to really feel the effects of any economic downturn. The other 80%, largely made up of middle-class consumers who might save for months to buy a designer watch or handbag as a treat might fall out of the luxury market while they prioritise other things, but the sheer spending power of that core clientele cushions the blow for the luxury industry.”
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