About three years ago, a friend of mine from the Kitchen and Bath Industry Show (KBIS) left his job there to start a new venture. He and a partner began a new industry show called The Luxury Kitchen and Bath Collection. Now beginning its third year, The Luxury Kitchen and Bath Collection has proven to be a tremendous success.
The show brings together manufacturers of high-end kitchen and bath products with the most influential architects and designers in the luxury kitchen and bath and hospitality markets, as well as high-end kitchen and bath dealers, decorative plumbing hardware showrooms and distributors. It was while attending this event that I first realized the luxury movement was on its way. There's opportunity in this category -- in fact, the opportunities are virtually limitless!
"There has never been any such thing as overcapacity. There has only been under imagination," said futurist consultant Edie Weiner during a recent program hosted by the Apparel Summit in New York.
"There's so much opportunity, it's amazing," she added. "It saddens me to see so much depression around when, in fact, we're moving into an incredibly challenging and exciting time."
The statistics support Weiner's assertion. More than 15 million U.S. households -- about 14 percent of the total -- have annual incomes of $100,000 or more, according to the U.S. Census Bureau. Nearly 12 million more have annual incomes ranging from $75,000 to $99,999.
While overall consumer confidence remains low, affluent consumers are much more sanguine about the future of the American economy. That's one of the conclusions of a major national survey Money magazine sponsored to gauge the mood of affluent Americans.
Where do these people spend their money? Their No. 1 priority is the home, including furniture, floor and wall coverings! Seventy-six percent of affluent consumers believe the value of their primary residence will rise, while 19 percent expect it will stay the same, and only 4 percent expect an erosion of their home's value. One in 10 said they plan to buy or build a primary or vacation residence during 2003.
Although the wealthy always seem to hold up their end of the economy, they aren't the only people buying. At this point, it's worth noting that there are different viewpoints about what defines luxury. Luxury spending isn't about buying items that aren't necessary, it's about buying things that are desired.
Ultimately, luxury is all about a feeling and an experience. It isn't about cost but rather how much it means to you. It's the freedom to pursue one's passions and to delve into one’s interests. The desire for nice things becomes an emotional and psychological need that isn't ignored -- even in a slow economy.
Whatever the buying category, if you tickle the bone that flips the gold-plated switches of the luxury consumer, they're going to keep the cash registers ringing.
Consumer research analyst Pam Danziger also believes retailers can grow their high-end business over the coming months. "Emotional needs are drawing consumers out of their cocoons," Danziger wrote in her new book, "Why People Buy Things They Don't Need." Since the events of Sept. 11, 2001, consumer analysts have become keenly aware that many Americans are staying home more and spending more money on things for the home.
Yesterday's luxuries become tomorrow's necessities. As a result, luxury marketers must continually reinvent themselves to give consumers more quality, exclusivity and specialness.
What's different since Sept. 11 is that there's significantly more focus on family, and more focus on the home as a haven and cockpit from which to run one's life. There's a quest for stronger relationships and psychological balance in everyday life, a desire for more security and a focus on keeping the family safe. We're seeing people place a higher value on relaxation and we also see them searching for knowledgeable services.
Steve Kleber, one of the speakers at this year’s Luxury Kitchen and Bath Collection event, commented that, even in a soft economy, luxury consumers have not significantly altered their approach to spending. Nor do they generally believe that their personal income will materially suffer as a result of the sluggish economy.
This, Kleber added, should be good news for the housing and remodeling markets.
Every marketing class that I've ever taken has stressed the fact that we should all plan for a down economy while things are booming. That's a tough thing to do when you're busy writing up all those sales.
But if you didn't plan ahead, and you're now looking to attract more high-end clients, try the following techniques:
1. Make your firm visible in the community by participating in community service and charity events. This not only increases networking and public relations opportunities, but also allows you to give back to the community from which you're receiving most of your business.
2. Collectively brainstorm your projects with ideas that will allow the projects to evolve into more luxurious higher-end designs.
3. Be original. This will create strong word-of-mouth prospects to develop new business opportunities. Getting your work published in media sources that cater to the high-end audience you want to target also helps make your work more visible.
4. Be aware that developing a presence at the high end takes time. View your efforts toward this goal as an investment that will take time to pay off. However, doing so will build value into what you do, and will eventually allow you to shift your business to a higher-end clientele.