That luxury goods are enjoying a buoyant market is a given. What's harder to define is why consumers at so many different income levels are in hot pursuit of relatively expensive things they don't really need.
Luxury is being defined in new ways and that definition evolves constantly with ever-shifting demographics, socioeconomics and the geopolitical climate, luxury observers note. Furthermore, the definition of luxury is not only objective, but also subjective depending on the buyers' personal circumstances.
The cliché used to be that fragrances were the point of entry into a traditional luxury label's domain. Over the past decade or so, designer eyewear has become a luxury category with relatively easy entry prices. More recently, watches, often further up the price scale, have also gained importance as a symbol of luxury, notably in the United States, compared to Europe where watches have been a traditional form of luxury, notes Ravi Dhar.
"You can't drive your Porsche into the boardroom, but you can distinguish yourself with a watch," says Dhar. Here, there is a mix of conspicuous consumption and the feel-good factor of wearing a great watch.
One way the notion of luxury has entered people's vocabulary is via the media. The increased availability of celebrity magazines or celebrity television programming, in addition to coverage in more traditional consumer glossy publications, means that more people know what's available.
"Eighty percent of Japanese women own or have bought a Vuitton bag," says Pierre Chandon. "This is not to distinguish themselves from the rest, but to show that they are part of the group."
"The real paradigm shift occurring in the luxury market that signifies new luxury is the consumer-centric way people are defining luxury as an experience or feeling," writes Pamela Danziger.
The only way for luxury brands to survive when the very definition of luxury is constantly shifting is to be consistently innovating, observers note. This is particularly important when courting the super rich. "The super rich have always stood out from everyone else, but the distance has shrunk," notes Myers. "They want to continue to distance themselves."