Evolution of Global Consumer Trends by Datamonitor - Essay Example

Evolution of Global Consumer Trends by Datamonitor 2.1. Introduction A recent report released by Datamonitor, independent market analysts, entitled ‘Evolution of Global Consumer Trends’ discloses that shifting consumer values are consistently influencing purchasing behaviour. According to Daniel Bone, analyst of consumer market and the researcher behind the report, “Only by understanding the new interpretations of the mega-trends can companies remain ‘on-trend’ in the long-term. Although consumer behaviour is complex, a clear understanding of consumer values, attitudes and behaviours, together with associated product trends provides powerful insight into what drives today’s consumer buying habits” (M2 Presswire, 2005, para 1). As a consequence of the remarkable expansion of luxury markets over the recent decade, the literature in marketing has currently witnessed considerable enthusiasm in the investigation of prestige brands, particularly in the fashion industry. However, scarce is known about the effective process of marketing and observing prestige brands. Research carried out in the UK by Applied Futures, a market research company predicted significant social changes at the advent of the 21st century. Their investigation determined that individual’s needs for appearances and materialism were escalating. Specifically, they identified an elevating demand for flamboyant and status fashion products (M2 Presswire, 2008). For instance, current market reports in Australia appear to provide evidence to this assertion. The Sunday Telegraph revealed an exceptional increase in Australia’s luxury products, such as amplified demand for mink furs, and very expensive jewelleries such as diamonds. This is, which is important to note, occurred prior to the economic slowdown which started in 1997 (ibid). The perspective for Europe’s textile and fashion industry in 1996 is, primarily, not good. Recent reports on market conditions in Italy, Germany, France and the UK are revealed. Germany’s primary suppliers and retailers of clothes for women predict no or zero growth. Several analysts predict sales of apparel in Italy to remain slow-moving, yet others anticipate significant growth (Weisman et al., 1996). Regardless of a number of encouraging reports everywhere, the UK luxury fashion at the advent of the 21st century is far from pretty. 2.1.1. Consumer Behaviour Women in UK remain the primary users and buyers of products within the cosmetics and toiletries department, with roughly eight in ten women admitting that they purchase the bulk or cosmetic and toiletry products in their homes. The toiletry market for the men, while being in its early years, is witnessing a degree of progress, particularly within the skincare department. Even though it is not measured that men’s purchasing of toiletry products will equal that of women’s in the coming years, there is an increasing pattern among men, particularly those in their younger years, to buy more products associated to improving physical appearance (M2 Presswire, 2008). Signature brand names among toiletry products for women are more and more attempting to get underway into the male sector (ibid). The price of clothing in the UK, as a relative costs to other products on high streets, has been decreasing for several years now. Since the opening up of affordable fashion imports from the Far East specifically from China, reasonably priced clothing has poured into the city streets and consumers have amplified the total purchasing of items of clothing. This is particularly true among female buyers, who are at present day purchasing considerably lots of clothes than years ago. The attractiveness of low-priced clothing has improved dramatically over the current years, with shops such as Primary taking pleasure on an extraordinary success on high streets through their talent of imitating catwalk fashion within the shortest period of time and at a very low price (Sunday Business, 2001). Numerous of these discounted clothing stores are now seeking to the male sector as a way of expanding their business. Nevertheless, while the discounted prices within economical clothing outlets has showed extremely popular among multitudes of consumers, current exposures of corrupt exchanges and the employment of child labour could have an effect on their growth and success in the future (The Daily Mail, 2008). Primary demographic patterns within the UK will also have an influence on present day and future purchasing habits of men and women. Women, for instance, are persisting to join the workplace at a remarkable pace and, while numerous could still be working within more inferior, part-time status, these is a developing representation of women within top management, senior, and well-compensated position. Hence, the general prosperity of women is persistently improving, although at a more gradual pace than that of their male counterparts (M2 Presswire, 2008). The increase in percentage of single-person households contained by the younger sectors of society will as well as has an influence on sales; several of these households are comprised of bachelors, with an increased throwaway income, who are an excellent target consumer for an array of commercial sectors, such as luxury fashion (ibid). 2.1.2. Recession Recently, the economy of UK is enduring rather uncertain times, with several analysts expecting an economic slowdown, or possibly worst, a recession. Economic determinants globally, such as the incident of the credit crunch in the US and increasing prices of oil and energy, are all contributing an effect in commercial, political and social exchanges conditions in the UK. Consequently, consumer purchasing power remains steady in a particular period of time, with several experts predicting diminishing levels of consumer purchase and a difficult years looming on the high streets (Sunday Business, 2001). Accounts in the media proliferate as to decline in the housing market in UK and boost in the costs of borrowing, as such are determinants that will further extend the purchasing power of UK consumers (ibid). The advancing recession in the UK will essentially adjust consumer behaviour, and luxury fashion sellers who are incapable to adapt to the emerging reality will hardly survive. As Andy Bond, CEO and President of Asda, a division of Wal-Mart Stores Inc, states, “We can already see how changing attitudes are affecting customers’ shopping habits... consumers aren’t prepared to pay a premium when they cannot taste the difference” (Jones, 2008, para 1). The period of luxury consumption has already passed. The priority nowadays, in the times of economic slowdown, is saving money through reducing waste of money such as luxury fashion. Moreover, Andy Bond asserted that the change in consumer behaviour because of the recession will give impetus to the emergence of a new consumer. This new consumer will require more value for money than the previous decades and direct price transparency. Triumphant retailers will be those who operate on an authentic economical framework, who embody sustainability as a mechanism of decreasing costs and who are clear-cut on the means they convey savings to the consumers. On the contrary, those who carry on with high and/or low pricing will turn out to be frustratingly mistrusted (Jones, 2008). Last year, Louis Vuitton, Chanel and Ralph Lauren had resorted to calf-length fashion, yet the midi, pruning women at a location numerous observed as profoundly satisfying, by no means quite lifted off. According to Coco Chanel, “Thighs are one thing, but a woman should never, ever show her knees” (Telegraph, 2008, para 1). However, if someone will try to ask an economist, the response will be more pessimistic: “Hemlines go up in a boom, down in a recession” (ibid, para 1). Moreover, there is no refuting that recent years, skirts have transformed from below the knee to floor-skimming. The fashion industry’s current economic status is similar to the incident of the Lehman Brothers. Chanel’s move to lay-off 200 hundred employees this month was the initial critical disturbance from the global economic slowdown to batter the industry of luxury fashion. The company had been labelled as one of the most booming luxury brands in this sector (Porter, 2009). On the contrary, Karl Lagerfeld, a creative director remains cynical. Chanel is a company that is privately run that refuses to reveal financial statistics yet is not perceived as being in peril. “I see it like a horrible but healthy thing. It was too rotten anyway so it had to be cleaned up. It may be a difficult moment for a lot of people, but in the end it was needed, because it was really going too far” (Porter, 2009, para 4). The fashion business has been in a gloomy disposition since key designers started discounting excessively prior to the long-established holiday sales, an indication that the economic predicament was influencing consumer behaviour. The optimism within the fashion business is that, regardless of how complicated and difficult the coming months would be, those who are genuinely gifted will be successful in remaining into business (ibid). 2.2. Factors Affecting Consumer Behaviour As Gabrielle Coco Chanel mentioned, “Luxury is a necessity that begins where necessity ends” (White, 2000, 37). These words were quite prophetic in a sense that even in the 21st century it remained to be true. Luxury fashion has trickled into every dimension of the consumer society. It has transformed to be the standard to aim at towards achieving the enjoyable products of brands such as Gucci, Louis Vuitton and Dior. This want is further sharpened by the reality that fashion has been opened up to the masses through brands such as Zara and H&M who consistently provide luxury-chic products at discounted prices. Moreover, globalization and advancement in the technology and communication have established fashion progressively more available (The Daily Mail, 2008). Consumers can nowadays shop anytime, anywhere on the Internet; access an expansive array of products and exchange direct brand experiences. These have created the common fashion consumer confidence, challenging and agitated. Therefore, provided with a range of considerations in the investigation of consumer behaviour in luxury fashion, it is then important to be aware of the various factors influencing consumer behaviour, both internal and external (ibid). 2.2.1. Internal Factors A number of intrinsic factors that are influencing buying behaviour in the luxury fashion sector and other commercial products in UK are age difficulties, gender complexities and sensory. Age difficulties Age resisting consumption addresses the challenge of age as identity. While parents feed their own immaturities, younger generations of consumers are consistently obtaining higher independent purchasing power and enhancing brand awareness and consumer loyalty, particularly when it comes to luxury fashion and consumer loyalty (M2 Presswire, 2005). Several analysts advise that producers of luxury fashion goods should offer an array of age defying designs and creations that are parallel with the aspired age of consumers such as the fancy to be more mature or childish. Moreover, ageless marketing in luxury fashion which aims at values and outlooks that are generally shared by generations instead of a particular age bracket will be significant in attracting expansive array of consumers without detaching other key groups (ibid). Gender Complexity Gender stereotypes are weakly defined in the contemporary period. Nowadays, UK men feel that consuming time on personal physical appearance through spending on luxury fashion brands is essential or extremely essential when weighed up with women. For instance, male dieting and vigorously looking for healthier food and drinks also illustrates how males are resisting long-established macho consumption (White, 2000). Nevertheless, the widespread presence of macho values implies that traditional principles defining a ‘man’ continues to prevail, and machismo issues still have strong significance in luxury fashion products such as clothing and shoes (ibid). Sensory At present day, consumers are looking out for more strong experiences from products and are more eager to try-out new products. “71 consumers in the US and Europe felt that finding more excitement and sensations in life was important and 63 tried more foods and drinks that they haven’t tried before over the course of 2003-04” (M2 Presswire, 2005, para 23). Discovering pleasure and fascination with foreign traditions and flavours is as well as more and more probable as globalization encourages experimentation (ibid). 2.2.2. External Factors On the other hand, external factors that are affecting consumer behaviour in the luxury fashion sector and other commercial products in UK are financial constraints, individualism and comfort. Financial Constraints Lower income and average market consumers are progressively seeking more luxury on an income or budget and is increasingly affected by what is referred to as the ‘democratization of luxury’. In previous years, the movement for available finest brands has appeared, decreasing the high entry barrier that luxury fashion industry once sustained for its finest products (White, 2000, 93). The remarkable hit of brands such as Walkers Sensations is one of the best instances of how consumers of mass market are exchanging for finer quality goods. High-class luxury is shifting too, with several highly-compensated consumers dumping flamboyant consumption and instead seeking for expert quality in aspects such as fashion, beauty products, food, still costly but more minimalist. A transformation towards practical luxury is also occurring (M2 Presswire, 2005). Individualism Nowadays, the pursuit towards self-expression persists. The substantial boost in the population of singles in western societies is significant, shown in the pattern for ‘looking after me’ which focuses on self-centred satisfaction and is manifested in their consuming habits (ibid, para 12). Individualism is also manifested in spending by the reality that more than half of European and US consumers experience fashion brands that go with their perspectives in life are significant. Consequently, future product ideas will more and more permit consumers to personalize or customize or even co-design products to fit their predilections (ibid). Comfort Comfort put emphasis on newly discovered or sharpened requirements for security, minimalism, tradition and remaining contained within the comfort zone. Primary behavioural patterns involve self-indulgence, wistful spending, making things easier, and ethnocentric spending. Demonstrating the trend is the means in which consumers look for comfort products with a small number of European and US consumers professing to take pleasure on modest indulgences to take a break from the daily pressures of life (Weisman, 1996). 2.3. Recessions Grievances over the recent global economic slowdown are categorized into two, namely, sentimental effects, and the misery of the people whose lifestyles have been hit by genuine losses. But is the recession real? Apparently, that’s how it appears. There is an upbeat market for housing and real estates, but it is growing trickier every day. Unemployment keeps on declining, yet dot.com millionaires fell from the clouds. Average incomes continue to improve, yet from accounts of Forbes magazine reveals news of billionaires experiencing their immense wealth fluffed up. Household consumption and loaning are increasing remarkably, yet from those proprietors of luxury, Gucci and De Beers, appears stories of miserable times (Sunday Business, 2001). So the whole world is in the midst of an intensifying slowdown or a decline in unemployment and crash of the mass well-heeled? Is it a recession in which the devastatingly rich dies with pneumonia and the common people merely catch cold? What is fascinating about recessions is not how the wealthy have endured, but how tough and flexible they seem to be; not how swiftly the economy has dawdled from the traditional top down, but how the thrust of the closing of the 1990s boom has carried on to compose itself and be felt, from consumer behaviour and spending to dearth in skilled labour (ibid). 2.3.1. Past Recessions Fashion designers who address the luxury needs of the masses, such as Liz Claiborne, Tommy Hilfiger and Polo Ralph Lauren were unable to set the fashion world on fire in the 1990s because of recession, yet they are still ever present on Wall Street’s catwalk as the world witnessed crashes in the stock market (Urwin, 2008). In UK, luxury consumers became increasingly pressured and consequently became progressively choosy and discerning in their spending spree. The traditional aspiration for the finest standards of quality and originality persist, but more novel and creative, more chic demands for improved experiences and dependable business outlook and behaviour are surfacing. Consumers are seeking for the return they will acquire from the experience of having, wearing or providing lesser, enhanced products. Brand value has never been subjected to so much scrutiny (The Daily Mail, 2008). In spite of the more current transition into difficult economic times, the previous decade has witnessed the luxury fashion industry treble in size. The population of rich individuals in surfacing markets has been increasing and these consumers will have a mounting influence on the luxury sector. As their population and wealth have increased, the rich have become more urbane in their spending enthusiasms, over the traditional prominent catalysts of status and prestige to more choosy and taken into account aspects. In surfacing markets, consumers are growingly being affected by Western fashions and their spending patterns are shifting swiftly (Morning Star, 2008). A developing weariness with fast products indicates that consumers are seeking for products that give them long-lasting value, the return they will obtain from having, wearing or providing lesser, finer things. This transition from prominent to more selective consumption will be progressively more in proofs as economic slowdown intensifies and brand value will be subjected under extreme scrutiny (White, 2000). The shift to more selective consumption by consumers classified as top-end is attributed by heightened scrutiny of quality product and money value; revitalized desire for genuine luxury; appeal for profound brand experiences; a greater recognition of creativeness and excellent craftsmanship and a sharpened responsiveness of commercial, environmental and social responsibility (ibid). These patterns are commonly encouraged by more isolated catalysts such as peace of mind, perception and experience, rather than live wire catalysts such as shows of status and power. This is an expansive transition away from a concept of ‘what you wear’ to a more identity based ‘who you are’. This indicates consumers are not merely willing to buy products themselves, but as well as whether the brand is sustaining the principle of fine artisanship throughout the entire of its operations (M2 Presswire, 2005, para 10). 2.3.2. Present Recession Luxury has lost its brilliance. Fashionistas in UK suddenly became recessionistas and their craving for unreasonably priced python skin handbags has diminished. Hence, companies producing and selling famous luxury brands expected a gloomy Christmas. Conspicuous spending in the luxury fashion sector in UK has declined as market crashed. Priding one self with Prada and Gucci suddenly appeared offensive provided with the recent economic condition (Urwin, 2008). The fashion house in Britain is also predicted to be greatly affected. Plummeting sales in October of last year made the group reveal plans to reduce costs, a risky technique provided with the dependence of luxury businesses on sustaining a magnificent image. Experts caution that as a late entrant in the surfacing markets, its status there is extremely unsecure than that of its competitors (ibid). Fashion buyer Bridget Cosgrave expressively described the impact of the recent global economic slowdown to consumer behaviour in the luxury fashion industry, “People are buying quieter things but they reek quality. These are things you have to be fashion-savvy to recognise. But it’s hard to say whether this is a cyclical fashion thing or a reflection of the economic times. There is a slightly more austere and serious colour palette and I suppose the return of the trouser might reflect the mood” (Urwin, 2008, para 27). 2.4. Conclusion Based on the information from various sources, the developing shift from prominent to selective consumption in the luxury fashion of UK embraces aspects such as the guarantee of high quality, the originality and exclusivity of the fashion product, the innovation of something novel and fascinating, the recognition of the story underlying the product and sharpened awareness of the effect of the product has on the larger society and the environment. Spending on luxury has transformed from being merely about extravagance and ‘what you wear’ to a more identity based, value-motivated expression of the personality of the consumer. Fashion brands have already began taking action to appeals for selectiveness and more profound experiences in various extents, with product novelty, creativity and greater degrees of personalisation. Eventually, it is probable that more international fashion brands will follow the trend. Key competitors will also surface that have the knack and resiliency to take advantage on the shifting demands of more choosy consumers. References "Men's and Women's Buying Habits". (2008, July 18). M2 Presswire . Evening Standard, London, Lauren Chambliss Column. (2001, April 4). Kinght Ridder . Evolving 'Mega Trends' Continue to Dictate Consumer Behaviour. (2005, August 17). M2 Presswire . If this is recession, it is still a diamond studded one. (2001). Sunday Business . It's All Down to the Consumer. (2001, September 30). Sunday Business (London, England) . Join the Middle March. (2008). The Daily Mail , 48. Over 'It'. (2008). The Daily Mail , 41. Porter, C. (2009, January 04). Blood on Catwalk as Cutbacks Bite. The Observer . Recession Pulls Hemlines Down. (2008, December 12). Telegraph . UK Recession will Change Consumer Behaviour. (2008, December 11). Morning Star . Urwin, R. (2008, December 11). Luxury Goods Feel Chill of Recession. This is Money . Weisman, K. (1996, March 7). 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