In tough economic times, well-heeled consumers still love the hunt

IT MAY SEEM insensitive to talk about luxury shopping in the midst of a financial meltdown. Okay, I know it is. However, in my biased luxury-enthusiast opinion, I believe now is the perfect time for marketers to coax spending-shy consumers to splash their cash. Why? Many people want to buy luxury goods because they enjoy chasing what they can’t or shouldn’t have; or more to the point, wanting to have what others can’t.  By luxury goods, I don’t mean the usual brand-name handbags, dresses and heels. If you can find the same luxury item in any store in any big city, then it’s no longer luxury, darling. True luxury is that strictly limited edition item that eludes our grasp, either because it’s ridiculously expensive or because it’s just not available.

Scarcity – or perceived scarcity – is a selling point for luxury brands. This I find particularly fascinating. It lights up the researcher in me and I have conducted countless focus groups to understand consumers’ behavior in times of both prosperity and recession. During periods of economic uncertainty, regardless of income level, people want to feel good about what they spend money on. This means that they are often willing to spend on items that are many times more expensive than more mundane products. Think LV bag versus basic food items – both have been subject to inflation in the past year, but research tells us that the same people who cut back on some food items because of the price increases will still buy luxury handbags.

On the surface, this may defy logic – why would people spend more on expensive products during financially difficult times? But it makes sense when you factor in the excitement and sense of reward of purchasing something that is very attractive and perhaps dangerously pricy, versus the dull feeling of annoyance with the inflated price of cheese or celery.

It’s not a logical thing – it’s a feeling thing. A thrill, if you like. According to our research, Hong Kong’s affluent intend to buy high-end quality items over the next year (as opposed to general personal or household goods) such as: 7.3 percent intend to buy designer clothes or leather goods valued at US$1,000 or more, up three percent from same time last year.

Then there is a more logical, practical motivation: consumers are more receptive to a brand’s advertising if the products are described as an investment. A successful example is Patek Philippe’s “Generations” campaign, where it used world-class photographers to capture two generations – father and son – alongside the emotionally charged slogan: “You never actually own a Patek Philippe watch. You merely look after it for the next generation.” A good friend of mine went straight out and bought a Patek Philippe purely on the strength of that ad.

Many people love the thrill of the chase. Consumers are people with real thoughts and feelings, dreams and fears. They love pursuing something desirable. So, the more limited the item, the harder the chase. And in some cases, the chase can be just as exciting, if not more so, than the object being pursued.
This was the case with one of my friends during a recent holiday in Cannes. One day, he strolled into a well-known jewelry store and asked to see a gentleman’s watch he had seen advertised in a fashion magazine. The sales assistant said that being a strictly limited edition, the watch was not available at that store.

At that point, a very good looking manager emerged and asked if he could help my friend. When he heard the story, the manager requested that the assistant bring “it” to show my friend. “It” was very rare timepiece – number 50 out of 150 worldwide – reserved for a wealthy Middle Eastern client. Sensing that the watch just might be within his grasp after all, my friend was both excited and trepidatious in equal quantities. This, after all, is what luxury shopping should be: complex, slightly scary and definitely special.

After a contemplative and fabulous lunch at La Palme d’Or, where he is well-known, my friend made up his mind to ask the manager if he could purchase the watch. During this transaction, my friend flirted amiably with the manager – something that comes naturally to him – and asked him out for a drink. The drink took place on the charming balcony of his hotel room, and the event has since been referred to by my friend as a “romantic evening á deux” to express his gratitude to the manager for allowing him to buy the watch.

After all this drama and excitement to acquire that beautiful watch, it has rarely been worn. This surely is simple proof that the chase can be more exciting than the catch.