Luxury good
Encyclopedia
Luxury goods are products and services that are not considered essential and associated with affluence.The concept of luxury has been present in various forms since the beginning of civilization. Its role was just as important in ancient western and eastern empires as it is in modern societies. With the clear differences between social classes in earlier civilizations, the consumption of luxury was limited to the elite classes.
, a luxury good is a good for which demand
increases more than proportionally as income
rises, and is a contrast to a "necessity good
", for which demand is not related to income.
Luxury goods are said to have high income elasticity of demand: as people become wealthier, they will buy more and more of the luxury good. This also means, however, that should there be a decline in income its demand will drop. Income elasticity of demand is not constant with respect to income, and may change sign at different levels of income. That is to say, a luxury good may become a normal good
or even an inferior good
at different income levels, e.g. a wealthy person stops buying increasing numbers of luxury cars for his automobile collection to start collecting airplanes (at such an income level, the luxury car would become an inferior good).
Several manufactured products attain the status of "luxury goods" due to their design, quality, durability or performance that are remarkably superior to the comparable substitutes. Thus, virtually every category of goods available on the market today includes a subset of similar products whose "luxury" is marked by better-quality components and materials, solid construction, stylish appearance, increased durability, better performance, advanced features, and so on. As such, these luxury goods may retain or improve the basic functionality for which all items of a given category are originally designed.
There are also goods that are perceived as luxurious by the public simply because they play a role of status symbol
s as such goods tend to signify the purchasing power of those who acquire them. These items, while not necessarily being better (in quality, performance, or appearance) than their less expensive substitutes, are purchased with the main purpose of displaying wealth
or income
of their owners. These kinds of goods are the objects of a socio-economic phenomenon called conspicuous consumption
and commonly include luxury vehicles, watch
es, jewelry
, designer clothing
, yacht
s, as well as large residences, urban mansion
s, and country house
s. Also see positional good
.
: for example, making a perfume more expensive can increase its perceived value as a luxury good to such an extent that sales can go up, rather than down.
Although the technical term luxury good is independent of the goods' quality, they are generally considered to be goods at the highest end of the market in terms of quality and price. Classic luxury goods include haute couture
clothing, accessories, and luggage. Many markets have a luxury segment including, for example, automobile
, wine
, bottled water
, tea
, watch
es, jewelry
, high fidelity
, and chocolate
.
Luxuries may be services. The hiring of full-time or live-in domestic servant
s is a luxury reflecting disparities of income. Some financial services, especially in some brokerage houses, can be considered luxury services by default because persons in lower-income brackets generally do not use them.
A luxury brand or prestige brand is a brand
for which a majority of its products are luxury goods. It may also include certain brands whose names are associated with luxury, high price, or high quality, though few, if any, of their goods are currently considered luxury goods.
Another market characteristic of luxury goods is their very high sensitivity to economic upturns and downturns, high profit margins as well as prices, and very tightly controlled brands.
For example, following a nearly crippling attempt to widely licence their brand in the 1970s and 1980s, the Gucci
brand is now largely sold in directly-owned stores. The Burberry
brand is generally considered to have diluted its brand image in the UK in the early 2000s by over-licensing its brand, thus reducing its cachet as a brand whose products were consumed only by the elite.
LVMH
(Louis Vuitton Moet Hennessy) is the largest luxury good producer in the world with over fifty brands, including Louis Vuitton
, the brand with the world's first designer label. The LVMH
group made a profit of €
2bn on sales of €12bn in 2003. Other market leaders include PPR
(after it purchased the Gucci
Group) and Richemont
.
A rather small group in comparison, the wealthy tend to be extremely influential. Once a brand gets an "endorsement" from members of this group, then the brand can be defined as a true "luxury" brand. An example of different product lines in the same brand is found in the automotive industry, with "entry-level" cars marketed to younger, less wealthy consumers, and higher-cost models for older and more wealthy consumers. The least expensive Mercedes-Benz
sold in the United States is the C300
sedan at $32,000, and the most expensive model is the Mercedes-Benz SLR McLaren
coupe at $497,000.
The advertising expenditure for the average luxury brand is 5-15 % of sales revenue. This rises to about 25 % with the inclusion of other communication such as public relations, events and sponsorships.
, Champagne, Cognac
. This sector was the only one that suffered a decline in value (-0.9 percent). The watches and jewelry section showed the strongest performance, growing in value by 23.3 percent, while the clothing and accessories section grew 11.6 percent between 1996 and 2000, to US$32.8 billion. North America is the largest regional market for luxury goods: unlike the modest 2.9 percent growth experienced by the Western European market, the North American market achieved growth of just under 10 percent. The top ten markets for luxury goods account for 83 percent of the market, and include Japan, China, USA, Taiwan, Russia, Germany, Italy, France, UK, Brazil, Spain, and Switzerland.
banned the sale of luxury showers that use more than 9.5 Liters of water per minute.
, consolidation
, and diversification
. Globalization is a result of the increased availability of these goods, additional luxury brands, and an increase in tourism. Consolidation involves the growth of big companies and ownership of brands across many segments of luxury products. Examples include LVMH
, Richemont
, and PPR
, which dominate the market in areas ranging from luxury drinks to fashion and cosmetics. Leading global consumer companies, such as Procter & Gamble, are also attracted to the industry, due to the difficulty of making a profit in the mass consumer goods market.
located in Paris
, France
is credited for being one of the first of its kind, but also Marshall Field's
, Selfridges
, Saks Fifth Avenue
and Harrods
are seen as some of the most influential and historical. Most big fashion houses & jewelers from Chanel
to Tiffany & Co.
have boutiques located inside these massive stores.
Tverskaya Street
, New York's
Fifth Avenue, Chicago's
Michigan Avenue
, Beverly Hills' Rodeo Drive
, Paris
' Champs-Élysées
and Avenue Montaigne
, Milan
's Via Monte Napoleone, London
's Bond Street
and Sloane Street
, Mexico City
's Avenida Presidente Masaryk
, São Paulo
's Rua Oscar Freire
, Düsseldorf
's Königsallee
, Singapore
's Orchard Road
and Tokyo
's Ginza
are some places where most luxury brands tend to be concentrated. These retail districts concentrate luxury good stores that are managed by large corporations, while conventional and independent retailers are pushed out because of increasing rent and real estate prices.
History
With increasing "democratization", several new product categories have been created within the luxury market, aptly called "accessible" or "mass luxury". These are meant specifically for the middle class (in this context, sometimes called the "aspiring class"). Because luxury has now diffused into the masses, defining the word has become difficult.Semantics
In contemporary marketing usage, Prof. Bernard Dubois defines "luxury" as a specific (i.e. higher-priced) tier of offering in almost any product or service category. However, despite the substantial body of knowledge accumulated during the past few decades, researchers still have not arrived on a common definition. Many other attempts have been made to define it using the price-quality dimension stating higher priced products in any category count as luxuries. Similarly, researchers have also compared goods in terms of their uniqueness. Prof. Jean-Noel Kapferer takes an experiential approach and defines luxury as items which provide extra pleasure by flattering all senses at once. Several other researchers focus exclusively on dimension and argue that luxury must evoke a sense of belonging to a certain elite group.Economics
In economicsEconomics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, a luxury good is a good for which demand
Demand (economics)
In economics, demand is the desire to own anything, the ability to pay for it, and the willingness to pay . The term demand signifies the ability or the willingness to buy a particular commodity at a given point of time....
increases more than proportionally as income
Income
Income is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings...
rises, and is a contrast to a "necessity good
Necessity good
In economics a necessity good is a type of normal good. Like any other normal good, when income rises, demand increases. But the increase for a necessity good is less than proportional to the rise in income, so the proportion of expenditure on these goods falls as income rises. This observation...
", for which demand is not related to income.
Luxury goods are said to have high income elasticity of demand: as people become wealthier, they will buy more and more of the luxury good. This also means, however, that should there be a decline in income its demand will drop. Income elasticity of demand is not constant with respect to income, and may change sign at different levels of income. That is to say, a luxury good may become a normal good
Normal good
In economics, normal goods are any goods for which demand increases when income increases and falls when income decreases but price remains constant, i.e. with a positive income elasticity of demand...
or even an inferior good
Inferior good
In consumer theory, an inferior good is a good that decreases in demand when consumer income rises, unlike normal goods, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases....
at different income levels, e.g. a wealthy person stops buying increasing numbers of luxury cars for his automobile collection to start collecting airplanes (at such an income level, the luxury car would become an inferior good).
Socioeconomic significance
There are also goods that are perceived as luxurious by the public simply because they play a role of status symbol
Status symbol
A status symbol is a perceived visible, external denotation of one's social position and perceived indicator of economic or social status. Many luxury goods are often considered status symbols...
s as such goods tend to signify the purchasing power of those who acquire them. These items, while not necessarily being better (in quality, performance, or appearance) than their less expensive substitutes, are purchased with the main purpose of displaying wealth
Wealth
Wealth is the abundance of valuable resources or material possessions. The word wealth is derived from the old English wela, which is from an Indo-European word stem...
or income
Income
Income is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings...
of their owners. These kinds of goods are the objects of a socio-economic phenomenon called conspicuous consumption
Conspicuous consumption
Conspicuous consumption is spending on goods and services acquired mainly for the purpose of displaying income or wealth. In the mind of a conspicuous consumer, such display serves as a means of attaining or maintaining social status....
and commonly include luxury vehicles, watch
Watch
A watch is a small timepiece, typically worn either on the wrist or attached on a chain and carried in a pocket, with wristwatches being the most common type of watch used today. They evolved in the 17th century from spring powered clocks, which appeared in the 15th century. The first watches were...
es, jewelry
Jewellery
Jewellery or jewelry is a form of personal adornment, such as brooches, rings, necklaces, earrings, and bracelets.With some exceptions, such as medical alert bracelets or military dog tags, jewellery normally differs from other items of personal adornment in that it has no other purpose than to...
, designer clothing
Designer clothing
Designer clothing is clothing that bears the logo of a recognizable fashion designer.The 'designer' whose name is on the label may be:* A European couturier, e.g. Chanel, Christian Dior* A European luxury goods house, e.g. Armani, Gucci, Louis Vuitton...
, yacht
Yacht
A yacht is a recreational boat or ship. The term originated from the Dutch Jacht meaning "hunt". It was originally defined as a light fast sailing vessel used by the Dutch navy to pursue pirates and other transgressors around and into the shallow waters of the Low Countries...
s, as well as large residences, urban mansion
Mansion
A mansion is a very large dwelling house. U.S. real estate brokers define a mansion as a dwelling of over . A traditional European mansion was defined as a house which contained a ballroom and tens of bedrooms...
s, and country house
English country house
The English country house is a large house or mansion in the English countryside. Such houses were often owned by individuals who also owned a London house. This allowed to them to spend time in the country and in the city—hence, for these people, the term distinguished between town and country...
s. Also see positional good
Positional good
In economics, positional goods are products and services whose value is mostly a function of their ranking in desirability by others, in comparison to substitutes. The extent to which a good's value depends on such a ranking is referred to as its positionality...
.
Market characteristics
Some luxury products have been claimed to be examples of Veblen goods, with a positive price elasticity of demandPrice elasticity of demand
Price elasticity of demand is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price. More precisely, it gives the percentage change in quantity demanded in response to a one percent change in price...
: for example, making a perfume more expensive can increase its perceived value as a luxury good to such an extent that sales can go up, rather than down.
Although the technical term luxury good is independent of the goods' quality, they are generally considered to be goods at the highest end of the market in terms of quality and price. Classic luxury goods include haute couture
Haute couture
Haute couture refers to the creation of exclusive custom-fitted clothing. Haute couture is made to order for a specific customer, and it is usually made from high-quality, expensive fabric and sewn with extreme attention to detail and finished by the most experienced and capable seamstresses,...
clothing, accessories, and luggage. Many markets have a luxury segment including, for example, automobile
Automobile
An automobile, autocar, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor...
, wine
Wine
Wine is an alcoholic beverage, made of fermented fruit juice, usually from grapes. The natural chemical balance of grapes lets them ferment without the addition of sugars, acids, enzymes, or other nutrients. Grape wine is produced by fermenting crushed grapes using various types of yeast. Yeast...
, bottled water
Bottled water
Bottled water is drinking water packaged in plastic or glass water bottles. Bottled water may be carbonated or not...
, tea
Tea
Tea is an aromatic beverage prepared by adding cured leaves of the Camellia sinensis plant to hot water. The term also refers to the plant itself. After water, tea is the most widely consumed beverage in the world...
, watch
Watch
A watch is a small timepiece, typically worn either on the wrist or attached on a chain and carried in a pocket, with wristwatches being the most common type of watch used today. They evolved in the 17th century from spring powered clocks, which appeared in the 15th century. The first watches were...
es, jewelry
Jewellery
Jewellery or jewelry is a form of personal adornment, such as brooches, rings, necklaces, earrings, and bracelets.With some exceptions, such as medical alert bracelets or military dog tags, jewellery normally differs from other items of personal adornment in that it has no other purpose than to...
, high fidelity
High fidelity
High fidelity—or hi-fi—reproduction is a term used by home stereo listeners and home audio enthusiasts to refer to high-quality reproduction of sound or images, to distinguish it from the poorer quality sound produced by inexpensive audio equipment...
, and chocolate
Chocolate
Chocolate is a raw or processed food produced from the seed of the tropical Theobroma cacao tree. Cacao has been cultivated for at least three millennia in Mexico, Central and South America. Its earliest documented use is around 1100 BC...
.
Luxuries may be services. The hiring of full-time or live-in domestic servant
Domestic worker
A domestic worker is a man, woman or child who works within the employer's household. Domestic workers perform a variety of household services for an individual or a family, from providing care for children and elderly dependents to cleaning and household maintenance, known as housekeeping...
s is a luxury reflecting disparities of income. Some financial services, especially in some brokerage houses, can be considered luxury services by default because persons in lower-income brackets generally do not use them.
Luxury brands
Brand
The American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
for which a majority of its products are luxury goods. It may also include certain brands whose names are associated with luxury, high price, or high quality, though few, if any, of their goods are currently considered luxury goods.
Another market characteristic of luxury goods is their very high sensitivity to economic upturns and downturns, high profit margins as well as prices, and very tightly controlled brands.
For example, following a nearly crippling attempt to widely licence their brand in the 1970s and 1980s, the Gucci
Gucci
The House of Gucci, better known simply as Gucci , is an Italian fashion and leather goods label, part of the Gucci Group, which is owned by French company PPR...
brand is now largely sold in directly-owned stores. The Burberry
Burberry
Burberry Group plc is a British luxury fashion house, manufacturing clothing, fragrance, and fashion accessories. Its distinctive tartan pattern has become one of its most widely copied trademarks. Burberry is most famous for its iconic trench coat, which was invented by founder Thomas Burberry...
brand is generally considered to have diluted its brand image in the UK in the early 2000s by over-licensing its brand, thus reducing its cachet as a brand whose products were consumed only by the elite.
LVMH
LVMH
LVMH Moët Hennessy • Louis Vuitton S.A., better known as LVMH, is a French multinational luxury goods conglomerate headquartered in Paris, Île-de-France, France. The company was formed after the 1987 merger of fashion house Louis Vuitton with Moët Hennessy, a company formed after the 1971 merger...
(Louis Vuitton Moet Hennessy) is the largest luxury good producer in the world with over fifty brands, including Louis Vuitton
Louis Vuitton
Louis Vuitton Malletier – commonly referred to as Louis Vuitton , or shortened to LV – is a French fashion house founded in 1854 by Louis Vuitton. The label is well known for its LV monogram, which is featured on most products, ranging from luxury trunks and leather goods to ready-to-wear, shoes,...
, the brand with the world's first designer label. The LVMH
LVMH
LVMH Moët Hennessy • Louis Vuitton S.A., better known as LVMH, is a French multinational luxury goods conglomerate headquartered in Paris, Île-de-France, France. The company was formed after the 1987 merger of fashion house Louis Vuitton with Moët Hennessy, a company formed after the 1971 merger...
group made a profit of €
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
2bn on sales of €12bn in 2003. Other market leaders include PPR
PPR (company)
PPR is a French multinational holding company specializing in retail shops and luxury brands. The company was founded in 1963 by the businessman François Pinault and is now run by his son François-Henri Pinault. It is quoted on Euronext Paris and is a constituent of the CAC 40 index...
(after it purchased the Gucci
Gucci
The House of Gucci, better known simply as Gucci , is an Italian fashion and leather goods label, part of the Gucci Group, which is owned by French company PPR...
Group) and Richemont
Richemont
Compagnie Financière Richemont S.A. is a Swiss luxury goods holding company founded in 1988 by the South African businessman Johann Rupert. Richemont categorizes its businesses into four areas: jewellery, watch making, writing instruments and other, which encompasses clothing and firearms. The...
.
A rather small group in comparison, the wealthy tend to be extremely influential. Once a brand gets an "endorsement" from members of this group, then the brand can be defined as a true "luxury" brand. An example of different product lines in the same brand is found in the automotive industry, with "entry-level" cars marketed to younger, less wealthy consumers, and higher-cost models for older and more wealthy consumers. The least expensive Mercedes-Benz
Mercedes-Benz
Mercedes-Benz is a German manufacturer of automobiles, buses, coaches, and trucks. Mercedes-Benz is a division of its parent company, Daimler AG...
sold in the United States is the C300
Mercedes-Benz C-Class
The Mercedes-Benz C-Class is a compact executive car produced by the Mercedes-Benz division of Daimler AG. First introduced in 1993 as a replacement for the 190 range , the C-Class was the smallest model in the marque's lineup until the 1997 arrival of the A-Class...
sedan at $32,000, and the most expensive model is the Mercedes-Benz SLR McLaren
Mercedes-Benz SLR McLaren
The Mercedes-Benz SLR McLaren is an Anglo-German grand tourer car jointly developed by Mercedes-Benz and McLaren Automotive, built in Portsmouth and the McLaren Technology Centre in Woking, Surrey, England and sold from 2003 to 2009...
coupe at $497,000.
The advertising expenditure for the average luxury brand is 5-15 % of sales revenue. This rises to about 25 % with the inclusion of other communication such as public relations, events and sponsorships.
Market size
The luxury goods market has been on an upward climb for many years. Apart from the setback caused by the 1997 Asian Financial Crisis, the industry has performed well, particularly in 2000. In that year, the world luxury goods market – which includes drinks, fashion, cosmetics, fragrances, watches, jewelry, luggage, handbags – was worth close to US$170 billion and grew 7.9 percent. The largest sector in this category was luxury drinks, including premium whiskyWhisky
Whisky or whiskey is a type of distilled alcoholic beverage made from fermented grain mash. Different grains are used for different varieties, including barley, malted barley, rye, malted rye, wheat, and corn...
, Champagne, Cognac
Cognac (drink)
Cognac , named after the town of Cognac in France, is a variety of brandy. It is produced in the wine-growing region surrounding the town from which it takes its name, in the French Departements of Charente and Charente-Maritime....
. This sector was the only one that suffered a decline in value (-0.9 percent). The watches and jewelry section showed the strongest performance, growing in value by 23.3 percent, while the clothing and accessories section grew 11.6 percent between 1996 and 2000, to US$32.8 billion. North America is the largest regional market for luxury goods: unlike the modest 2.9 percent growth experienced by the Western European market, the North American market achieved growth of just under 10 percent. The top ten markets for luxury goods account for 83 percent of the market, and include Japan, China, USA, Taiwan, Russia, Germany, Italy, France, UK, Brazil, Spain, and Switzerland.
Luxury bans
In July 2010, the United States Department of EnergyUnited States Department of Energy
The United States Department of Energy is a Cabinet-level department of the United States government concerned with the United States' policies regarding energy and safety in handling nuclear material...
banned the sale of luxury showers that use more than 9.5 Liters of water per minute.
Market trends
The three dominant trends in the global luxury goods market are globalizationGlobalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...
, consolidation
Consolidation (business)
Consolidation or amalgamation is the act of merging many things into one. In business, it often refers to the mergers and acquisitions of many smaller companies into much larger ones. In the context of financial accounting, consolidation refers to the aggregation of financial statements of a group...
, and diversification
Diversification (marketing strategy)
Diversification is a form of corporate strategy for a company. It seeks to increase profitability through greater sales volume obtained from new products and new markets. Diversification can occur either at the business unit level or at the corporate level. At the business unit level, it is most...
. Globalization is a result of the increased availability of these goods, additional luxury brands, and an increase in tourism. Consolidation involves the growth of big companies and ownership of brands across many segments of luxury products. Examples include LVMH
LVMH
LVMH Moët Hennessy • Louis Vuitton S.A., better known as LVMH, is a French multinational luxury goods conglomerate headquartered in Paris, Île-de-France, France. The company was formed after the 1987 merger of fashion house Louis Vuitton with Moët Hennessy, a company formed after the 1971 merger...
, Richemont
Richemont
Compagnie Financière Richemont S.A. is a Swiss luxury goods holding company founded in 1988 by the South African businessman Johann Rupert. Richemont categorizes its businesses into four areas: jewellery, watch making, writing instruments and other, which encompasses clothing and firearms. The...
, and PPR
PPR (company)
PPR is a French multinational holding company specializing in retail shops and luxury brands. The company was founded in 1963 by the businessman François Pinault and is now run by his son François-Henri Pinault. It is quoted on Euronext Paris and is a constituent of the CAC 40 index...
, which dominate the market in areas ranging from luxury drinks to fashion and cosmetics. Leading global consumer companies, such as Procter & Gamble, are also attracted to the industry, due to the difficulty of making a profit in the mass consumer goods market.
Luxury Department Stores
Since the uprising of the 'luxury brand' in the 1800s, department stores dedicated to selling all major luxury brands have popped up in most major cities around the world. Le Bon MarcheLe Bon Marché
Le Bon Marché is the name of one of the best known department stores in Paris, France. It is sometimes regarded as the "first department store in the world". Although this depends on what is meant by 'department store', it may have had the first specially designed building for a store in Paris...
located in Paris
Paris
Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...
, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
is credited for being one of the first of its kind, but also Marshall Field's
Marshall Field's
Marshall Field & Company was a department store in Chicago, Illinois that grew to become a major chain before being acquired by Macy's Inc...
, Selfridges
Selfridges
Selfridges, AKA Selfridges & Co, is a chain of high end department stores in the United Kingdom. It was founded by Harry Gordon Selfridge. The flagship store in London's Oxford Street is the second largest shop in the UK and was opened on 15 March 1909.More recently, three other stores have been...
, Saks Fifth Avenue
Saks Fifth Avenue
Saks Fifth Avenue is a luxury American specialty store owned and operated by Saks Fifth Avenue Enterprises , a subsidiary of Saks Incorporated. It competes in the high-end specialty store market in the Upper East Side of Manhattan, i.e. 'the 3 B's' Bergdorf, Barneys, Bloomingdale's and Lord & Taylor...
and Harrods
Harrods
Harrods is an upmarket department store located in Brompton Road in Brompton, in the Royal Borough of Kensington and Chelsea, London. The Harrods brand also applies to other enterprises undertaken by the Harrods group of companies including Harrods Bank, Harrods Estates, Harrods Aviation and Air...
are seen as some of the most influential and historical. Most big fashion houses & jewelers from Chanel
Chanel
Chanel S.A. is a French fashion house founded by the couturier Gabrielle "Coco" Chanel, well established in haute couture, specializing in luxury goods . She gained the name "Coco" while maintaining a career as a singer at a café in France...
to Tiffany & Co.
Tiffany & Co.
Tiffany & Co. is an American jewelry and silverware company. As part of its branding, the company is strongly associated with its Tiffany Blue , which is a registered trademark.- History :...
have boutiques located inside these massive stores.
Luxury shopping Districts
Another phenomenon of the luxury market are "Luxury Shopping Avenues". Certain thoroughfares like Moscow'sMoscow
Moscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...
Tverskaya Street
Tverskaya Street
Tverskaya Street , known as Gorky Street between 1935 and 1990, is the main and probably best-known radial street of Moscow, Russia. The street runs from the central Manege Square north-west in the direction of Saint Petersburg and terminated at the Garden Ring, giving its name to Tverskoy District...
, New York's
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
Fifth Avenue, Chicago's
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
Michigan Avenue
Michigan Avenue (Chicago)
Michigan Avenue is a major north-south street in Chicago which runs at 100 east south of the Chicago River and at 132 East north of the river from 12628 south to 950 north in the Chicago street address system...
, Beverly Hills' Rodeo Drive
Rodeo Drive
Rodeo Drive of Beverly Hills, California is a shopping district known for designer label and haute couture fashion. The name generally refers to a three-block long stretch of boutiques and shops but the street stretches further north and south....
, Paris
Paris
Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...
' Champs-Élysées
Champs-Élysées
The Avenue des Champs-Élysées is a prestigious avenue in Paris, France. With its cinemas, cafés, luxury specialty shops and clipped horse-chestnut trees, the Avenue des Champs-Élysées is one of the most famous streets and one of the most expensive strip of real estate in the world. The name is...
and Avenue Montaigne
Avenue Montaigne
Avenue Montaigne is a street in the 8th arrondisement of Paris, France-Name origin:Avenue Montaigne was originally called the allée des Veuves because women in mourning gathered there, but the street has changed much since those days of the early 18th century. The current name comes from Michel...
, Milan
Milan
Milan is the second-largest city in Italy and the capital city of the region of Lombardy and of the province of Milan. The city proper has a population of about 1.3 million, while its urban area, roughly coinciding with its administrative province and the bordering Province of Monza and Brianza ,...
's Via Monte Napoleone, London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
's Bond Street
Bond Street
Bond Street is a major shopping street in the West End of London that runs north-south through Mayfair between Oxford Street and Piccadilly. It has been a fashionable shopping street since the 18th century and is currently the home of many high price fashion shops...
and Sloane Street
Sloane Street
Sloane Street is a major London street which runs north to south, from Knightsbridge to Sloane Square, crossing Pont Street about half way along, entirely in The Royal Borough of Kensington and Chelsea. Sloane Street takes its name from Sir Hans Sloane, who purchased the surrounding area in 1712...
, Mexico City
Mexico City
Mexico City is the Federal District , capital of Mexico and seat of the federal powers of the Mexican Union. It is a federal entity within Mexico which is not part of any one of the 31 Mexican states but belongs to the federation as a whole...
's Avenida Presidente Masaryk
Avenida Presidente Masaryk
Avenida Presidente Masaryk refers to one of the trendiest streets in Polanco, Mexico City, Mexico. It runs from Calzada Gral. Mariano Escobedo to F. C. de Cuernavaca Avenue.- The Trendiest Street in Mexico :...
, São Paulo
São Paulo
São Paulo is the largest city in Brazil, the largest city in the southern hemisphere and South America, and the world's seventh largest city by population. The metropolis is anchor to the São Paulo metropolitan area, ranked as the second-most populous metropolitan area in the Americas and among...
's Rua Oscar Freire
Rua Oscar Freire
Rua Oscar Freire is a tree-lined street stretching from Alameda Casa Branca to Avenida Doutor Arnaldo in the Jardins district of São Paulo. It was named after Oscar Freire de Carvalho, a physician and forensic medicine professor from Bahia, who helped develop the city's first morgue .According to...
, Düsseldorf
Düsseldorf
Düsseldorf is the capital city of the German state of North Rhine-Westphalia and centre of the Rhine-Ruhr metropolitan region.Düsseldorf is an important international business and financial centre and renowned for its fashion and trade fairs. Located centrally within the European Megalopolis, the...
's Königsallee
Königsallee
The Königsallee is an urban boulevard in Düsseldorf, state capital of North Rhine-Westphalia, Germany. The Königsallee is noted for both the landscaped canal that runs along its center, as well as for the fashion showrooms and luxury retail stores located along its sides.Nicknamed Kö by the...
, Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
's Orchard Road
Orchard Road
Orchard Road is a road in Singapore that is the retail and entertainment hub of the city-state. It is regularly frequented by the local population as well as being a major tourist attraction...
and Tokyo
Tokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...
's Ginza
Ginza
is a district of Chūō, Tokyo, located south of Yaesu and Kyōbashi, west of Tsukiji, east of Yūrakuchō and Uchisaiwaichō, and north of Shinbashi.It is known as an upscale area of Tokyo with numerous department stores, boutiques, restaurants and coffeehouses. Ginza is recognized as one of the most...
are some places where most luxury brands tend to be concentrated. These retail districts concentrate luxury good stores that are managed by large corporations, while conventional and independent retailers are pushed out because of increasing rent and real estate prices.
See also
- Commodity fetishismCommodity fetishismIn Marx's critique of political economy, commodity fetishism denotes the mystification of human relations said to arise out of the growth of market trade, when social relationships between people are expressed as, mediated by and transformed into, objectified relationships between things .The...
- Designer labelDesigner labelThe term designer label refers to clothing and other personal accessory items sold under an often prestigious marque which is commonly named after a designer. The term is most often only applied to luxury items...
- Wealth effectWealth effectThe wealth effect is an economic term, referring to an increase in spending that accompanies an increase in perceived wealth.-Effect on individuals:...
- Positional goodPositional goodIn economics, positional goods are products and services whose value is mostly a function of their ranking in desirability by others, in comparison to substitutes. The extent to which a good's value depends on such a ranking is referred to as its positionality...
Further reading
- Chadha, Radha; Husband, Paul. (2006). The Cult of the Luxury Brand: Inside Asia's Love Affair with Luxury. ISBN 1904838057.