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#Shifting Trend in Luxury Purchases Buying Top Technology and Investing in a Lifestyle Experience The new luxury is about investing in a lifestyle experience that not only can help improve health but also escalate the experience of such mundane acts as baking a pizza at home. Steve Hundley dumped his Jaguar convertible. He stopped taking Baltic cruises. And he stopped buying his wife pricey jewelry. But last year, just as the recession raised its head, the San diego resident paid $6, 500 for an outdoor artisan pizza oven. oewe dont need the Jaguar or cruises to the Baltic, says Hundley, who at 56, is semiretired following a heart attack two years ago. oebut cooking healthy food is a big priority. Americans are dipping their toes back into the luxury pool but with a mindset thats been smacked down and radically reshaped by the recession, the lure of new technologies and emerging lifestyle twists that are often as much personal as cultural. oethe luxury brands are all trying to reinvent themselves and deliver a better experience, says Milton Pedraza, CEO of the Luxury Institute, a research firm that consults for designer brands. Apple is making all these companies rethink their business models. It wasnt long ago that luxury primarily meant the accumulation of designer clothes expensive jewelry and fancy cars. For some, it still does. But for many consumers, the new luxury is something seriously different. For some, its about owning top technology-based products. Consider: The four brands most admired by Americans with six-digit incomes in a recent survey by the marketing specialist Affluence Collaborative were Apple, Microsoft, Best Buy and Sony. For others, such as the Hundleys, the new luxury is about investing in a lifestyle experience that not only can help improve health but also escalate the experience of such mundane acts as baking a pizza at home. Sales of outdoor artisan pizza ovens at Kalamazoo Outdoor Gourmet similar to ovens used at pizza parlors were up 48%last year and are up 74%so far this year. oeit creates an experience and isnt consumable, says Pantelis oepete Georgiadis, president of Kalamazoo. oeyou can keep enjoying it for a long, long time. For others, its about buying luxury goods only when theyre on sale or at a steep discount. Nearly three in four wealthy women say theyll only purchase luxuries if they can get a good deal, reports a recent survey by Agencysacks, a branding firm that consults for some of the nations top luxury brands. Luxury spending slid 7. 8%last year to $10. 1 billion, says Spending Pulse, a consumer spending monitor from Mastercard. Its bounced back up for the first five months of 2010. But even affluent customers continue to seek out discounts bargains and sales, says Tim Murphy, chief product officer at Mastercard. In a recent Mastercard poll, some 64%of all consumers said they were shopping sales. oea few years ago, youd just market access to the affluent. Now, you must market access with a discount. All this was driven by the recession. oethe recession made everyone stop and rethink luxury and value, says Pedraza. oeeven though were coming back, that realization has stuck. The new world of luxury is less about designer labels and glitz and more about shopping savvy and an I-feel-good-owning-this mentality. Marketers want to know: Will it last? Pedraza certainly thinks so. He says that Apple and Sony are emerging as the newest luxury designer labels. oewith Apple, you get a better design, a better function and a better luxury experience than you do with most other luxury brands, he says. Pedraza recently asked the CEO of a giant European luxury apparel brand to name the company that he viewed as his toughest competitor. Without batting an eye, the CEO, whose company Pedraza wont name due to client confidentiality, said it was Apple. Apple declined to comment. Not a need, but a want But Yolanda Cummings, who works as a finance professional in Columbus, Ohio, says that to her, there are few things closer to luxury than owning her new Apple ipad. oei dont need it. I just wanted it because its new, different and intriguing, she says. She paid about $699 for it. She already has a $300 Apple ipod touch and $1, 600 Apple Macbook. oei used to go overboard buying clothes, she says. oenow, Im more inclined to purchase new technologies. Andrew Sacks, who is president of Agencysacks, says he bought an ipad the first week it was introduced. oepart of it is escapist luxury, he says. oewere living in a world where its difficult to control a lot of things, so theres a feeling that owning new technology allows me to be organized more, more efficient and have more time. The recession, he says, has helped to rejigger his own definition of luxury. Recently, Sacks says, he reached into his closet and discovered a black leather John Varvatos jacket that hed casually purchased several years ago for $1, 500 at a New york boutique. He put the jacket in his closet and forgot it about it. But when he recently rediscovered it post-recession his view of the jacket had changed entirely. oei was embarrassed a little that I could take something so expensive and put it away and not even have it on my mind, he says. oetoday, Id do a lot more research before even considering such a purchase. For Don Contreras, luxury is the flat-screen Sony TV that he plans to buy and install in the gazebo in his backyard. On weekends, the federal government physician from Albuquerque likes to do yard work and prune the fruit trees he has in his backyard. But he also likes to watch sports on TV. By placing the Sony TV in his gazebo, he says, hell be able to do both. He only wants a Sony he says, because thats the only electronics brand that he trusts. But hes waiting to buy it until he finds a really good deal. oeim not an impulsive buyer, he says. oei can wait. Executives at Sony have concocted a new term for the brand: oefunctional luxury. In a tough economy, says Stuart Redsun, marketing chief at Sony Electronics, oeyou dont have to worry about your product breaking down quickly. Beyond that, he says, the functional luxury is from the product providing a new experience such as the new Sony Cyber-shot camera that lets folks shoot panoramic photos or new 3d TV SETS that let folks experience home viewing of movies in a new way. Another example: Sony soon will be the first consumer electronics maker with a Google feature built into its TV SETS. Folks watching any show will be able to use a special remote to search Google on the same TV screen. Sony also has pushed the value message hard. Over the holidays, for example, it bundled a new Sony TV, Playstation gaming system, game and Blu-ray movie for $900 less than it would cost to buy the items separately. oewe sold out of all the units in that promotion, notes Redsun. It recently rolled out a similar bundled deal that ends July 17. Value and luxury have become synonymous. At Neiman Marcus oeour customers way of shopping has changed, says Karen Katz, CEO of Neiman Marcus Stores. oeshe is responding well to the opening and middle price points. For example, many Manolo Blahnik designer shoes at Neiman Marcus typically sell for at least $500 and some for upwards of $900. But in the spring, Neiman Marcus had great success selling a Manolo Blahnik ballet flat for $395. oeour customer was very happy to have a Blahnik shoe for under $500, says Katz. Bargain in the bag Its no accident that Coach, whose handbags used to start at about $250 and whose average retail price for a handbag hit close to $350 before the recession launched a new line last year, Poppy, which starts at $198. Beyond that, Coach has added more bags at lower price points and made them more function for women carrying devices from iphones to ipads, says Michael Tucci, president of Coachs North american retail division. oethe last thing I want you to get from this is that Coach got cheaper. We got more compelling from a value standpoint. Consumers have responded. Coach sales are up 8%for first nine months of its fiscal 2010 Value, of course, is in the eye of the purchaser. To Lori Wachs, a hedge fund partner from Philadelphia nothing says luxury value like getting topnotch designer clothing at 40%to 70%off simply by visiting a website. Several times a week, she visits the luxury discount site Gilt. com, where shoppers have restricted a amount of time sometimes a matter of hours or even minutes to order luxury goods before someone else beats them to the limited number of items. While Wachs wont say exactly what shes spent in the past 18 months, she says shes spent oethousands of dollars on the 100 or so items shes purchased. Among them, a Chloã handbag originally priced at $1, 500, that she snatched for about $600. oetheres an adrenaline rush when there is a certain brand that you love, she says, oeand after you click on it, you wait to see if its been added to your basket or to someone elses cart. In two years, Gilt Groupe has amassed more than two million members, says CEO Susan Lyne. oea lot of people feel like chumps if they pay full price, says Lyne. oewhen you get a deal on a luxury item, it makes you feel smart. Via USA Today Share Thissubscribedel. icio. usfacebookredditstumbleupontechnorati t

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