The luxury goods industry has undergone considerable changes in the past decade. In one of its most robust markets, Japan, sales of imported goods have declined ten percent over the past year. That same market, the first to become a really ‘mass luxury market’ in the 1980s and 1990s, has been somewhat transformed as middle class consumers are more confident mixing and matching cheap and expensive goods. In other markets, similarly making luxury goods accessible to a mass-market consumer has conceivable eroded the status and value of luxury products rather than provide an entry point into that market for middle class consumers. The subsequent ‘cheapening of the brand’ has occurred at the same time the recession somewhat eroded wealthy consumers’ confidence, and yet sales have slumped mainly for affordable luxury products. What has been the effect of these recent changes on the strategy of luxury goods companies? This paper analyses this subject, focusing upon what actions such firms are taking to counter the decline of sales and how they are rethinking their expansion moves in emerging markets such as China. It also provides comments on how the wealthy are responding now that luxury has gone mass market; what ways they are finding to flaunt their wealth.
Ian M Taplin is Professor of Sociology and International Studies at Wake Forest University and Visiting Research Professor at Kedge Business School, Bordeaux. His key areas of interest and research include work place restructuring and changing employment relations, state-business relationships, organizational innovation and small firm growth in the NC wine industry, management resistance to change, continuity and change in the UK and US apparel industry and luxury goods industries in transition - icon wines and fashion goods. Ian has published a wide range of journal articles and a number of books including Restructuring Within a Labour Intensive Industry (edited with J. Winterton), Avebury, 1996; Rethinking Global Production (edited with J. Winterton), Ashgate, 1997; Understanding Organizational Evolution (with D. S. Fletcher), Quorum Books, 2002 and The Modern American Wine Industry: Market formation and growth in North Carolina, Pickering and Chatto, 2011.