Concetta Lanciaux, founder, Strategic Luxury Advisors: “Universal aspiration to luxury has never dwindled and never will. It can only increase in the years to come as all basic needs are being met worldwide. In some countries, consumers will continue to be willing to even lower their food budget in order to buy status objects. The big change is only in the level of income that people will have available to spend on luxury goods. The lasting values of luxury brands such as quality and design identity, in a market with less spending capacity, are reinforced and gain an even more central place. But the luxury market will have fewer global contenders, and the offer will become clearer. Luxury brands that will be able to…offer collections with identity and relevance, but with a wider range of prices, will win the large base of the customers they need.”

Luca Solca, senior retail and luxury analyst, Sanford Bernstein: “The recession will likely usher in an era of more subdued growth on the back of less buoyant economic growth in the medium term. Smaller players will be even more marginalized than today, while larger and stronger leading players will emerge. Consumers will avoid excesses and maintain a more considerate shopping behavior. This is showing today with major brands being preferred for their iconic products, with consumers clearly looking for investment-grade purchases rather than newly invented fads. Similarly, consumers will question value and price more. Brands that were not seen to discount so aggressively will be preferred. Designers and apparel products, I would expect, will face the highest scrutiny and skepticism, considering that lower-priced design alternatives abound.”

Anne Chapelle, CEO, BVBA 32, the holding company of Ann Demeulemeester and Haider Ackermann: “Priorities in spending patterns have been rearranged, and consumers have experienced the feasibility of this change in their everyday lives. To bring them back to their previous spending [habits] will definitely take time, care, and investment from our side. Secondly, the players in the luxury business have changed as well. The economic downturn forced some, sometimes smaller and younger fashion houses, to close down or to get reorganized in a dramatic way. Consumers are [repositioning] their attitudes toward luxury…. They are even more focused on the quality of materials and craftsmanship and the choice of sustainable and truly valuable goods.”

Cristiana Ruella, group managing director, Dolce & Gabbana: “Recession aside, the economic-social system worldwide has been hit by structural change due to the shift in the way both companies and consumers think. We will face the upcoming months with even more rationalized collections for customers oriented toward distinction and quality. We will continue to invest in a focused manner and obviously with more attention when evaluating each project to further reduce the margin of risk compared to what was tolerable in the past.”

Value, First and Foremost

Lew Frankfort, chairman and CEO, Coach Inc.: “Luxury is changing and it will be much less about price and more about great product and exclusivity. Price will no longer be a positive factor in making a purchase decision. Consumers will want products that are extremely well made, scarce, and at a good value.” Frankfort believes that accessible luxury will thrive given some “compelling price points out there, and that you will see less conspicuous consumption in the high-ticket area. There will be exceptions. Hermès will continue to thrive. Growth, however, will be in areas that are more in reach of a more discerning consumer. The consumer will be careful when she emerges regarding how she buys and where she buys. Diamond rings over $50,000 will be trending to a lower level.”

Pierre Mallevays, managing partner, Savigny Partners, London, a boutique investment bank specializing in luxury goods: “The crisis has changed the definition of ‘value.’ That was a dirty word in the luxury-goods circle before the downturn, just like ‘mass.’ Now the luxury customer wants value as in investment value. In luxury goods, value will come from the perception of a high degree of craftsmanship and quality combined with durability, with a good sprinkle of functionality. The customer now wants to spend right: not to accumulate or to have, but for the right reason. The investment proposal has to be right. Brands will rediscover they have a soul and will have to engage the soul of their customers to be really successful. This will require a multichannel, interactive dialogue, where the customer will feel a sense of ownership of the brand or sharing in its set of values.”

Stefano Pilati, designer, Yves Saint Laurent: “What happens after this kind of a cycle is that consumers become more aware of value, with a heightened attention to the exclusivity and quality of a product. They will recognize and expect expertise in design and craftsmanship, and a strong, coherent aesthetic identity from the brands they patronize. My approach to design has always given primacy to pure aesthetics without losing an orientation toward the needs of the market. At Yves Saint Laurent, we anticipated the crisis, in a sense, through the creation of the various ‘Edition’ capsule collections, which operate and respond vertically to diverse market needs and requests.”