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Luxury goods not enough,experience must: BCG

With high disposable income and increasing taste for finer things in life,the luxury segment may be booming but the players in this space may slip out if they don't offer experience to their clients,the Boston Consulting Group (BCG) has said.

Written by Agencies | Mumbai |
June 5, 2012 8:49:17 pm

With high disposable income and increasing taste for finer things in life,the luxury segment may be booming but the players in this space may slip out if they don’t offer experience to their clients,the Boston Consulting Group (BCG) has said.

“More and more luxury shoppers tell us they love experiences that make them feel pampered. But if luxury goods players are to capitalise on the ‘experience’ trend,they have to move quickly and forcefully. To date,very few have been successful in adding experiential elements to their offerings,websites,or in-store execution.

“While the lack of such elements may not yet be hurting the providers’ financials,it is a missed opportunity to boost performance,” BCG Senior Partner Jean-Marc Bellaiche said,releasing a report on trends in the luxury segment.

The report noted that experiential luxury now makes up almost 55 per cent of total luxury spending worldwide and,year-on-year,has grown 50 per cent faster than sales of luxury goods.

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“Even in brand-obsessed China,where personal luxury goods serve as a strong badge of status and success – with sales surging 22 per cent annually – experiential luxury dominates,growing at 28 per cent each year,” it said.

Nearly 1,000 affluent people participated in a survey mentioned in the report from France,Germany,Italy,Japan,Korea,Spain,Britain,US,Brazil,Russia,India and China.

The report found that aggregate annual spending on what consumers describe as luxuries now tops USD 1.4 trillion.

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This includes over USD 770 billion on luxury experiences,close to USD 350 billion on luxury cars,and the rest on personal goods like watches,handbags and shoes.

“The Indian luxury consumer is also coming of age.

Global travel,the Internet and media have made Indians more aware and open to luxury experiences,” BCG India Partner Amitabh Mall said.

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First published on: 05-06-2012 at 08:49:17 pm
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