Consumer perception of luxury is shifting

Luxury is no longer perceived solely as the quality or price of a product but the personal experience provided alongside it, a leading retailer has stated.

Consumer perceptions of luxury are shifting and the experience is now just as important as the purchase

According to Ben Odgers, general manager of luxury wines and spirits outlet Le Clos, the drive behind luxury buying is shifting from “owning” to “experiencing” luxury when making a purchase.

“The idea of luxury is not only about the exceptional quality and provenance of a product but also the unique and personal experience attached to it,” Odgers explained to The Spirits Business.

As a result, producers are being pushed to tailor their prestige spirits in an increasingly oversaturated marketplace as the number of global millionaires and demand for luxury grows.

The total number of millionaire households in the world grew by 2.6 million in 2013 to 16.3 million, according to Boston Consulting Group, and is expected to soar even higher in the next few years.

By 2018, China is expected to have accumulated US$61 trillion, accounting for more than half the world’s global personal wealth, hot on the heals of the world’s richest nation, the US.

Luxury map

As Kirsten Grant Meikle, director of the newly created prestige arm of William Grant, explained, “the world’s luxury map is shifting”.

“Geography doesn’t so much define the opportunity, and therefore thinking must shift to focus on consumers, not markets, and understanding the lifestyle journey and needs of HNWIs [high net worth individuals],” Grant Meikle said.

“You have to think about cities as opposed to countries and nationalities, as although people speak about the wealth in places like China and Russia, a lot of wealthy Chinese and Russians don’t buy in those markets; they buy on their travels in Europe.”

Looking ahead, however, Neyah White, brand ambassador for Suntory Japanese whisky predicts innovation will become increasingly important as consumers develop more “open-mindedness” towards spirits.

“Innovation will be come increasingly important in the luxury space,” White commented. “It is not enough to be just old and rare anymore as the whisky consumer is becoming very educated.”