Define Luxury Goods? What is it? Luxury goods are those items that are considered to be very desirable, or items that are perceived to have great value by the buyer. In economics, a luxury product is a good for which increased demand develops more quickly than proportional to income, so that expenses on the good grow to a greater share of overall sales. If we apply this definition to the luxury goods market, then it would imply that those products that are most desired by customers – and therefore those that are hardest to replace in the event of loss or damage – command the greatest prices. The most common examples of such luxury goods would be designer clothing, sports cars, brand name cosmetics, art and architecture, and certain brands of food.
The reasons why people would seek to buy these goods are varied. For some, it would be to create a sense of wealth and affluence. Other people may use luxury goods as a means to create more free time, by being able to travel and unwind more easily. Still others may use luxury to get the best returns possible for their money.
Unfortunately, the supply of luxury goods is increasing while the demand is decreasing. This has resulted in a phenomenon known as the Luxury Goods Syndrome. As supply increases, but demand decreases, prices of luxury goods fall. Conversely, when demand decreases but supply continues to increase, prices of luxury goods can rise.
How can a business bridge the gap between supply and demand? One approach is to offer an alternative type of service that fills a particular demand. An example might be a catering business that offers high-end catering services for weddings, proms, and other special occasions. By matching this type of service with a particular clientele, it is not difficult for potential customers to realize that this is the type of establishment they want to frequent. On the flip side, when the available choice of luxury goods is greater than the demand for them, the price will reflect that higher value and thus allow the business owner to charge a higher price for the goods.
This situation is what has been coined the Luxury Goods Market, and although this market has been around for a long time, it seems to be growing in recent times. This growth has been fueled in part by the creation of online shopping sites that make the luxury goods market available to consumers that previously had no way of purchasing the items they desire. Consumers are also discovering that it is easier to purchase luxury goods online than it is in real life.
When a consumer visits a store, it is often difficult to tell whether the price charged is reflective of the quality and/or standard of the merchandise. The Luxury Goods Association provides a line graph that compares similar products, such as Gucci, Burberry, Chanel, Louis Vuitton, and Saks Fifth Avenue, and reveals, at a glance, what the base price should be and how it varies across different brands and designers. There are many different ways that consumers can gauge the quality and/or standard of luxury goods that they desire. Some consumers base their decision on price, while others base their decision on the perceived quality and/or style of the product.
Another useful website that provides data on the luxury goods market is the Luxury Goods Database. This database is divided into different sections, including Design, Handmade/ Craftsmen’s and Specialty Goods/ Accessories, Lingerie, Shoes, Watches, Accessories, Cameras and much more. The Luxury Goods Database provides consumers with detailed information about everything from Gucci handbags to Tiffany & Co. jewelry. The site also offers consumer tips and guides on how to shop for and find the best luxury goods in the market. For consumers who are interested in buying luxury goods but do not know where to start their search, the Luxury Goods Directory is another useful source.
To learn more about the luxury goods market in general, one must go to Luxury Goods Research and Consulting. This company researches luxury goods all over the world and distils the data down into useful insights for consumers. Consumers should be wary of scams related to luxury goods when looking to purchase them. It is important to research all options available to consumers before making any purchase.