Wendy Mpatsi | Consumer Insights Planning Manager | Pernod Ricard | mail me |
Despite the slowdown in the global economy, the luxury sector is seeing continued rapid growth. Given the declining economy, the question is, which South Africans can still afford luxury goods?
From research conducted we see that the luxury culture is evolving and there are two main sets of luxury consumers in South Africa; traditional and non-traditional. The traditional luxury consumer is entrenched in understatement luxury product that is not overt and not recognisable as expensive where the brand name is less important.
Luxury for these consumers is rare and hard to find, it is only detectable to those in the know.
Non-traditional luxury is being modernised by a new set of very lively consumers, celebrities and influencers. They tend to be over the top and only want to burn money, through living in the moment and value instant rewards.
Brand names are important for them and they only want to associate with well-known luxury brands (Louis Vuitton etc.) as well as bespoke products, experiences and services that allow for distinction and an individual lifestyle.
From poverty to wealth
We note a rising wave of first-generation luxury consumers that have come from poverty to wealth and are splurging to communicate that they have finally made it.
These consumers are all about being unique, once in a lifetime experiences that gives them access to something new.
Luxury experiences are still quite aspirational however with the democratisation of luxury in South Africa, we see various brands delivering premium experiences to masses which ultimately means that consumers are exposed and have access to what was exclusively set aside for our luxury consumers i.e. yacht parties.
Experiences appear to be the most valuable ‘luxury currency’ for these consumers and various brands have jumped on board in an attempt to set luxury consumers apart from the masses.
Through offering consumers unique and exclusive experiences such as driving an Aston Martin to flying a helicopter and introducing them to an international celebrity, brands have pinned their hopes on providing an experience that is difficult to attain and exposure money cannot buy.
Innovative entrepreneurs
Although there is a rising demand for designer labels from various consumers, South Africa still lags behind in terms of luxury stores that have opened.
The supply of these products has been restricted to innovative entrepreneurs who have resorted to purchasing products overseas and selling them via exclusive online and walk-in boutiques giving consumer access to various designer labels and therefore connecting with them on their functional needs.
The continued success and stable growth of the luxury sector in South Africa will largely be driven by millennials and to some extent Gen Z who are active in social media engagements and look to influencers for style and direction.
However, these consumers expect more from brands (collaborations with unique designers to being sustainable, cruel free etc.) and are looking for brands to close the space between traditional and non-traditional from brands.
