Luxury Institute News

August 22, 2011

Luxury (Now) Within Reach

Makers of high-end goods are trying new tactics to attract budget buyers.

By Kelli B. Grant
August 19, 2011

While the market upheaval and economic uncertainty has encouraged many people to tighten their budgets, shoppers lusting after that “it” bag, a first-class airline seat or a pricey car may now find those luxuries are more affordable than before.

Companies that make or sell high-end goods are increasingly aiming for what they call aspiration buyers — middle-class shoppers who can afford to occasionally splurge. The tactics are vast, including pitching less-expensive product lines, selling overstock online and allowing consumers to buy luxury perks in lieu of earning them. Audi, for example, is rewarding brand loyalty by offering $1,000 to $3,000 cash-back to households that already own an Audi and want another one. In September, eBay  will team up with Nieman Marcus and other luxury e-tailers to sell goods at discounts of up to 65%. And new credit cards from Amercian Airlines  and United offer a cheaper buy-in for perks previously available only to elite road warriors and big spenders. “Luxury has become more democratized these days, and everyone wants access,” says Milton Pedraza, the president of Luxury Institute LLC, a marketing firm.

Click the link to read the entire article which includes additional quotes from Milton Pedraza, CEO of Luxury Institute:

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