Today’s consumers are discovering that the premiumisation trend is apparent whether buying expensive cars, designer clothes or premium beverages. Premiumisation is the key trend behind recent innovative product launches, with consumers continually seeking better quality products, services and experiences across the board.

Luxury is constantly being re-defined and is now within reach of a much larger consumer segment.

Key drivers:

• Rising affluence - Cashed up boomers, working couples, women delaying marriage and kids
• Economic growth - Higher salaries and lower unemployment
• Changing aspirations - New symbols of status
• Indulgence - Consumers reward themselves as an antidote to stress
• Growth - Individualism and self expression
• Age of materialism - You are what you buy, lives built on credit and instant gratification
• Abundance of choice - More discerning consumers

Rising affluence set to continue

As widespread affluence and disposable incomes continue to rise, products and brands continue to upgrade and premiumise their offerings.

Luxury will always seek higher ground and as such ‘uber-premium’ is everything that is truly out of reach of the vast majority of consumers. Not just financially, but also by not being invited (exclusivity) or by being too late.

There is unprecedented wealth in the developed world, encouraging and inspiring leading entrepreneurs and corporations to continually introduce higher quality goods and services.

The number of wealthy consumers in under developed countries is also set to increase dramatically.

Riding a rising tide of wealth

Predictions indicate that the high end luxury goods market has plenty of room for growth, with today’s consumers having higher disposable incomes.

• In 2006 the Luxury Goods industry was worth $157 billion
• Predicted to reach $1 trillion by 2010
• 35 major brands control 60 percent of the business
• Top six brands include Louis Vuitton, Gucci, Prada, Giorgio Armani, Hermes and Chanel
• Each brand has revenues in excess of $1 billion

Preserving luxury credentials

As luxury becomes more accessible, global brands dominate and grow, continue downward brand extensions (prestige for the masses) and shift their production offshore. The World Luxury Association predicts 60 percent of the world’s luxury brands will have their products made in China by 2009.

The artisan community is banding together to protect luxury as it used to be known. Hand crafting, best quality ingredients, natural, provenance, time, heritage, exclusivity and authenticity are enduring signs of prestige.

“It’s about subtlety and details. It’s about service. Luxury is not consumerism. It is educating the eyes to see that special quality”. Christian Louboutin.

Planned scarcity

Products become premium and desirable not only by being financially out of reach of the masses, but also by not being widely available. Planned scarcity is a way of ensuring exclusivity.

Limited edition products are sure to gain sales as people are drawn to exclusive offers with limited time, numbers or distribution.

Ethical products deliver on exclusivity, status and experience, and often come at a premium price. The market for ethical goods and services is growing rapidly, with 14 percent growth YOY across Europe alone.

Self indulgence = luxury

“Because you’re worth it” has struck a chord with consumers—luxury looks after you.

With luxury shifting from what you own to how you feel, products and brands help consumers achieve moments of happiness or fulfillment which are used as a self reward/antidote to our stressful and complicated lives.

Service is a key ingredient - the old fashion notion of luxury: privacy, exclusivity and personal preferences, which manifest as bespoke, hand crafted, rare, incorporating precious ingredients.

Today’s consumers are also willing to pay a premium price for the emerging products that care for their precious apparel.

Premiumisation and Australian Merino wool

Australian Merino wool is the world’s most luxurious natural fibre. Recent product innovations present exquisite Merino fibres that feel incredibly soft, providing uncompromised next to skin comfort. The versatile, high quality natural fibre offers luxurious qualities that meet the demands of today’s high end consumers.