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 bode well with De Beers’ Holiday marketing effort that aims to drive diamond sales by promoting ‘few and better’ gifts.

In difficult economic times, shoppers are looking for value, quality and timelessness

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

The shift is most pronounced in developed markets. In emerging markets, where purchases by the wealthy are primarily driven by conspicuous consumption, purchasing patterns are “transforming rapidly,” adopting the Western purchasing patterns.

According to the report, 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 this has significant implications for the way luxury players 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 spend 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 quality, toward fewer but better things that represent genuine value.

“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. The value of diamonds endures - they are crafted with skills acquired over generations, are savored over a lifetime and can be worn and enjoyed season after season.”