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Beyond Travel: How Luxury Brands Are Responding to Tough Economic Times |
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The Luxury Marketing Council, with researchers IPSOS/Mendelsohn, surveyed 320 luxury companies in New York City and 65 in Boston across industries to see how they're doing and how their best customers are changing. Greg Furman, founder and chairman of LMC, shared the results and answered some follow-up questions related to travel. Here's what he had to say:
- The luxury sector is under siege - and not just the aspirational customer, but those with investable assets of $1 million and more - the typical buyers of couture products and services. Many brands experienced double-digit losses for Q4 08 and anticipate continuing losses in the first half of 2009. It's no longer
- 78% say recent economic/financial events have negatively impacted their business. Surprisingly, 22% said "not."
- 65% said sales were declining; 34% said less store traffic; 28% said fewer inquiries from customers; only 9 % said less spending/commitment on the part of best customers; 6% had cut budgets and only 2% were experiencing an increase in returns.
- What are luxury brands doing to adjust? As follows:
- 52% were cutting advertising/marketing expenditures
- 36% were reducing orders to suppliers
- 23% were laying off staff
- 14% were slowing down delivery of ordered goods
- 8% were reducing staff hours
- 6% were cutting expenses
- 1% was reducing prices
On travel-specific impact and in answer to other LT360 questions,
Furman echoed views of other experts: Shorter, less frequent trips:
combining inter-generational and family trips; not spending on
"conspicuous extravagant" where it might be perceived as insensitive,
and added
- Using and wanting ‘luxury of wellness' spa facilities more than ever
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Brands must move out of advertising into heightened customer service,
pr, one-to-one e-marketing, collaborations and partnerships
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Issues & Insights 
