In staying up to date with the new theories of luxury marketing in the global economic downturn, it seems to us that there is a denial, among the purveyors of luxury goods and services, about how consumers are now viewing luxury. The same holds true, in many cases, with sellers of luxury real estate. As we read the various reports and the advice from industry pundits, we are struck by the level of delusion that continues to characterize the industry. Many home sellers are refusing to price their homes in line with current consumer demand.
In retail, some advisors say, “Do not lower prices of luxury goods and services”. The fear is that this may tarnish the brand’s reputation. In the perfume industry, one solution is to sell perfume in smaller bottles, giving consumers the illusion of lowering prices. Have you noticed that store bought coffee usually comes in 12 once bags these days instead of 1 pound bags?
The hospitality industry is also attempting to maintain their prices while adding incentives such as food and spa credits which effectively lower the rate of the rooms. Consumers are not jumping at either offer.
The high end consumer is rejoicing at all the sales. Finding bargains has become a badge of honor. Waiting for items to go on sale has become a new national pastime. Most importantly, consumers are beginning to ask these important questions: Is this item worth it? Do I really need it? Do I have to have it at this price?
As soon as more homebuyers wake up to the new perception of value in the luxury realm, more luxury real estate marketing professionals will start to see significant momentum in their sales.