Extravagant consumer spending alive and well, study says
Luxury goods companies know their customers well. Could you apply their strategies to your veterinary practice?
Reports of the death of gaudy consumption during the recession have been greatly exaggerated, according to a new study from the University of Southern California Marshall School of Business. The research finds a number of the world’s foremost luxury companies introduced even more conspicuously branded goods at the height of the recession, rather than abandoning prominent logos for more subdued designs.
The researchers also found no evidence to suggest luxury businesses are toning it down, and discovered that wealthy consumers are still interested in purchasing high-end items. The study forthcoming in the Journal of Consumer reports that conspicuous consumption endures, even during a recession. Here are the study’s key findings:
> If consumers had demanded fewer conspicuously branded products during the recession, companies would have responded with more understated designs. Instead, the researchers observed the exact opposite: Companies produced and advertised goods that continued prominently displaying their logos or displayed them more prominently.
> If manufacturers failed to meet consumers’ demand for less conspicuously branded goods, profitability should have suffered. Instead the parent companies of these luxury firms fared well.
> Luxury superpowers such as Louis Vuitton and Gucci increased their prices, on average, across their handbag product lines.
The data, researchers say, suggests that these companies are reading their customers correctly. These savvy companies understand their client base and they understand that they cater to a certain segment that desires products used to signal their status. And that desire doesn’t go away, even in hard times.
So how well do you know your veterinary clients and the kinds of services they’d purchase? Don’t just assume that a client will turn down a dental cleaning or rehabilitation session just because he or she has had bad financial luck. As this study shows, the recession can’t kill a consumer’s desire for the best—whether it’s a shiny new car or preeminent veterinary care.