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Luxury Items
By Daphne | October 25, 2007
Shoppers can expect more deals for Christmas shopping this year. That’s good news right? That is because people who have been overspending for years or are feeling the crunch may be feeling the crunch all over. Holiday shopping is not the only concern for retailers. One area that concerns retailers is the lower end luxury items.
CNN Money reports…Â
If the slowdown continues, luxury retailers could be hard hit. To appeal to a broader demographic, companies from Tiffany to Valentino have courted mass affluent shoppers with new lines at lower prices. The mass affluent account for 23 percent of households, compared to less than 2 percent for those with incomes upwards of $250,000, according to the U.S. Census Bureau.
These households, with incomes of $75,000 to $150,000, make up 23 percent of the population, and it’s “the marginally wealthy who are feeling a bit less well off,” said Milton Pedraza, chief executive of the Luxury Institute, a research group that studies behavioral habits of the rich.
Rather than just buying a purse or bag for $400 people may start thinking about whether or not they really need the item. The chief executive of the Luxury Institute may not really realize it but a single household with an income of $75,000 has much more disposable income than a 5 person household making the same amount.
Luxury items are just that special items that are not for everyone to have. Some high end items have increased in price over the years, not necessarily improving the quality but still having a name brand that is very enticing to some shoppers.
As people who are in the lower realms of “affluence” have to use more of their money to pay for staples such as food, energy and taxes then that leaves less money for frivolous items.
I have no qualms about buying a treat or two but not at the expense of vital necessities. I have seen high end purses that could use a little polishing cream for a fraction of the original price. I have also seen less popular colors of the current it bag on sale later on.
My advice would be to buy quality but less. Even the super rich will go broke if they don’t practice good spending habits. Don’t get sucked in by material things that you may not be satisfied with in a month or so. If there is something that you are really interested in that is pricey, go to a consignment shop which will have a higher price but better quality than a traditional thrift shop. Check thrift stores, you may get lucky. You can rent luxury items or rent to buy. Look in magazines for ways to get the fashion look for less.
If you really want the item, think about it first for a day or so* and then if you still want the item and it will not put you into too much financial strain - buy it. [*Unless you are on vacation and will not easily come back to this store... in that case buy it as your one really nice souvenir to yourself.]
Luxury shopping or any shopping for that matter should not be guided by impulse - use your head and relationship with money to guide you.
Topics: October 2007 |