Are we witnessing the death of bling?
Even when the recession ends, value – not brand – may rule sales
IWAS chatting to a client at the beginning of the year, just as the recession was beginning to bite, and he mentioned that Gucci had sent non-branded carrier bags to all its stores in New York. This got me thinking a bit more than I had already been about the economic crisis and I realised that most of us have a rather unifaceted and short-term view of the situation.
What we focus on is that people are not able to afford things as they did during the boom times. But there is another more long-term dimension, one that I believe will make itself felt long after the economic tide turns again.
There is the possibility that people will no longer want to buy certain things, even if they have the money to do so. Being rich and flaunting your wealth could just go out of fashion, in much the same way that fur coats became vulgar and attracted public outrage in the 1980s.
Is it going to become vulgar once more to talk about money and show your wealth? Are we about to witness the death of bling?
If we are, the effect on luxury brands is going to be pretty significant. The “noughties” decade saw an unashamed global trend towards flash materialism. The more bling the better. But recently there has been a shift. Women are stashing their LV handbags at the back of their cupboards, the diamond-encrusted gent’s Rolex is being put into the safe for another day.
As we wean ourselves off these luxury brands, our addiction to them is slowly ebbing away. I can’t afford the BMW but no matter – I now have an emotional preference not to buy one; it’s no longer fashionable to have the luxury brand item. Of course, luxury goods will always have a market, but the global trend of bling is slowly dying. May it rest in peace, some may add.
So what is the best way for a brand, luxury or not, to react?
A recent study by Euro RSCG in New York uncovered, unsurprisingly perhaps, the fact that consumers are afraid. On a continuum of “no anxiety” to “severe anxiety”, the average person is sitting at 72 percent towards anxiety. This anxiety factor has caused people to go back to basics, to lean towards traditional values. In other words, to throw out crass materialism and brand adoration, and to make more cerebral decisions about what to purchase.
One might expect the economic depression to generate a mass search for the cheapest item, but the research proved that this is not necessarily the case. In fact, quite the contrary. There is an increasing convic- tion that low prices do not automatically equate to good value.
In a market flooded with sales and specials, low prices can generate scepticism, a sense that un-sellable rubbish is being fobbed off on bargainhunting consumers. The poor quality control of mass-produced cheap products coming out of Asia feeds this scepticism. The study also found that nearly 60 percent of consumers will buy only from a company they trust, an unsurprising trend given their high levels of anxiety.
So if consumers aren’t looking for the cheapest item available, what are they looking for? The answer is value. Value that is not about price but about quality. People want something more for the same price, something that will last longer.
People want to feel that their hard-earned money is buying something worthwhile. Increasingly, they recognise that buying cheap is taking a risk, and society is currently very risk-averse. Getting good value is therefore about making the sensible choice.
And while hype-inflated brands are not the sensible choice, neither is a cheap and nasty product. If luxury items are to survive beyond the current financial crisis, they will need to rely on their quality, not just their label.
Madeley is chief executive of Euro RSCG South Africa
LUXURY MODELS: Visitors admire a BMW Z4 at a motor show in Beijing, China.