This is a literature review of online private shopping clubs a subcategory of luxury consumption. In this review, I will provide a brief orientation of luxury consumption and give further information about the latest consumer trend online private shopping clubs. The trend will be described in great detail and analysed.
The term “luxury” is routinely used in our everyday life to refer to products, services or a certain lifestyle, often without a clear understanding of the luxury concept as it takes on many forms for different people and is dependent on the experience and mood of the consumer (Wiedmann et al, 2009). However, according to Danziger (2005), luxury may be defined as something inessential, but conducive to pleasure and comfort. It is derived from the Latin word “luxuria”, meaning “excess” or the “extras of life” (Danziger 2005). With this view in mind, luxury consumption could thus be described as the consumption of any good(s) for which the simple use or display of a particular branded product brings esteem for its owner (Wiedmann et al 2009). According to Echikson (1994), people want quality and value, but if prices were lowered, they assume that you are lowering the value and the quality. It could therefore be said that the higher the price of a good, the more it is assumed the good is of a high value.
Online private shopping club is the latest innovation in the age of e-commerce and is particularly widespread in several countries like USA, Germany, Spain, UK, Turkey and France. It is simply the sale of luxury designer goods online at discount prices. Constantinides et al. (2010) cite Internet World Statistics which assert that there are more than 1.5 billion internet users and this has affected globalization, trad...
... middle of paper ...
...instead it might gain momentum because many consumers seek luxurious quality products at discount prices and there is a need for consumers to be associated with luxury brands and value. In addition, it is a convenient method of shopping that saves time.
The recession left a lasting impact on consumer’s choices and behaviour towards consumption. As a result, consumers are willing to go through any means to acquire luxury goods at discount prices even though in some cases, they don’t need the goods, but the mere fact it’s inexpensive is an incentive for them to purchase the products and this has promoted the trend. Venture capitalists and online retailers like Amazon are acquiring online private shopping club to avoid missing out on this trend (Palmer, 2010). This shows that the consumer trend online private shopping club will grow and expand further for some time.
Shopping is not simply a chore; it is also an experience. Shopping for clothing is a particularly personal decision, and various motivating factors can cause one shopper to choose a particular store over another store. Some consumers go to the store to confirm that they belong to a certain social stratum, others because they enjoy the thrill of a bargain. According to Daniel Miller in ‘Making Love in Super Markets’, the behavior of consumers in supermarkets tends to fall into two categories: ‘treat’ shoppers and ‘thrift’ shoppers.
People are often deceived by some famous brands, which they will buy as useless commodities to feel they are distinctive. People require brands to experience the feeling of being special. People spend their money to have something from famous brands, like a bag from Coach or Louis Vuitton which they think they need, yet all that is just people’s wants. Steve McKevitt claims that people give more thought on features or brands when they need to buy a product, “It might even be the case that you do need a phone to carry out your work and a car to get around in, but what brand it is and, to a large extent, what features it has are really just want” (McKevitt, 145), which that means people care about brands more than their needs. Having shoes from Louis Vuitton or shoes that cost $30 it is designed for the same use.
High-end and niche merchandise: With rising disposable incomes the demand for high-end goods in increasing, which can best be catered by specialty retail stores. Large players can offer competitive prices as they buy in bulk. Smaller players can differentiate themselves by offering niche products and superior customer delight at a premium price.
It is interesting to consider Veblen’s theory of conspicuous consumption as it pertains to the modern day fashion industry, specifically the luxury fashion sector. In The Theory of the Leisure Class, Veblen said “we all find a costly hand-wrought articles of apparel much preferable to a less expensive imitation of it;” however, at the beginning of the 20th century, couture clothing was exclusively available to those who were very wealthy, simply because of how much the garments cost. By the mid-1930’s, businesses were beginning to change their ways of thinking after seeing the enormous profit that the Walt Disney Company received once they licensed the making of Mickey Mouse novelty items. Christian Dior was the first of many fashion designers to foll...
An object worth good value is determined by how society sees it. Hammerslough contends, “A fairly low price and decent quality for an item are no longer the only standards of what makes for good ‘value.’ The other sense of value- a source of strength or esteem-creeps into material objects as well (317)”. As years pass on by, the meaning of value one considers in making a purchase changes. How much an item is worth is no longer what is considered as good value, good value is considered to be an item that gives power, a feeling of being dominant over others who do not have such an item and revere those items. Lasn implies, “Your friends reinforce the brandhunting. Wearing the same stuff and hearing the same music makes you a fraternity, united in soul and form (379)”. Sometimes consumers buy items to fit into a clique or crowd. The clothes and valuables one wears and owns define their place in society. Wearing clothes out of date or different from others may make that person an outsider or outcast. Hammerslough’s claim was accurate because the truth is, most people do not even want the product; only buy it to feel dominant and feeling of acceptance to boost their
Amazon.com operates in the Online Retail Industry. The sector is one of the fastest growing globally and is outperforming the ordinary retail marketplace. It was created after 1995 and it was only the Internet that made it possible for such an industry not only to be established but to become one of the most flourishing sectors in the business environment. What is interesting is that Amazon.com, together with eBay is the pioneer in the field. Both companies were launched in 1995 and are still extremely successful. The creation of e-mail in 1996 had a huge impact on the development of online retail by introducing a fast and easy way to communicate with customers. For this two-year period Internet usage doubled annually, thus, allowing for the expansion of the industry. Google is launched a year later, in 1998, only to become the most used search engine in the world and an essential partner for the online retailers by helping them tailor their websites to customer’s personal preferences and by advertising. After that, more and more people see the opportunity in the growing industry and enter it. By 2001 there are more than 513 million Internet users globally, which calls for action in terms of creating regulations and laws to protect the users and personal property. In 2003, Apple launches iTunes, and provides a platform for low-cost digital downloads. Another major change is the appearance of social media from 2004, which is one of the biggest influencer on the state of the industry. With the launch of iPhone in 2007, this trend strengthens as people get to enjoy the Internet anywhere they want to. From then on, technological advancements have made it extremely easy and fun to shop online, making it ...
...d subject. The overall opinion is that yes Veblen, Bourdieu and Baudrillard all do have some flaws but that fact that they can still be applied to today’s society decades and even longer in relation Veblen, even though they may not 100% fit within a modern 21 century culture. The biggest term that has survived and does not seem to be going anywhere is ‘conspicuous consumption as it has long be relevant within communities today. It is also an efficient method in which society can use the term to describe the bias that is apparent when individuals are status seeker with in consumption. Therefore, even though consumption is a broad topic and can link into many other subjects other than sociology it can be understood through the works of Veblen, Bourdieu and Baudrillard. However they are just a stepping stone there are numerous theories out there and more being created.
Six years after deciding to be an independent public company in late 2000, Coach Inc.’s net sales had grown at a compounded annual rate of 26 percent and the stock price had increased by 1,400 percent due to a strategy keyed to a concept called accessible luxury. Coach crafted the accessible luxury category in women’s handbags and leather accessories by differentiating themselves on price, but matching competitors on styling, quality, and customer service. The accessible luxury strategy mirrors a focus (or market niche) strategy based on low costs. Coach concentrates on a narrow buyer segment and outcompetes rivals by having lower costs than rivals and thus being able to serve niche members at a lower price. Management believed that new products should be based on market research rather than on designers’ instincts. Coach utilized extensive consumer surveys and focus groups to gain insight in the market, and ultimately a competitive advantage over competition. Coach’s $200-$500 handbags appealed to both middle class consumers who now were able to afford a taste of luxury, as well as affluent consumers with the means to spend $2,000 on a handbag on a regular basis.
Kapferer, J., & Bastien, V 2009, The luxury strategy: break the rules of marketing to build luxury brands. London: Kogan Page.
For one, luxury can be defined through good health. For another, luxury can be defined through comfort. To many, luxury is defined through lavish possessions such as cars or jewelry. Regardless of how we perceive luxury, there is a journey behind how we achieve it. Cartier produced an exquisite commercial to celebrate the brand’s history. With the worldwide icon, the leopard, we went through the odyssey of Cartier’s history. The commercial started with a leopard statue of diamonds and jewels coming alive which symbolized the birth of the legacy of Cartier, the start of the odyssey. Then we start watching the leopard visit significant places of Cartier’s history: China, India, and France. All these places are important to the luxury industry. After the journey across different continents, we finally arrive in Paris where Cartier was founded, where
However, when looking to create a luxury brand, one must go beyond what is required of an ordinary brand, to create something of high value and therefore high prices. So instead of just having brand values, it should have brand beliefs, as this will create a stronger emotional connection with its customers. It should aim to go beyond having a logo, but rather a set of distinguishable icons and the brand’s points of sale needs to be somewhere that connects with its customers and becomes something of a pantheon among other retail outlets. Similarly the customer segmentation should have role reversal, so the customers want to buy their products. Luxury brands should instead of actively promoting their advantages over their competitors, never push the customers into buying their products, thereby offering mystique and letting the customers make the value creation. Lastly, a true luxury brand not only offers products but rather a way of life, allowing them to branch out over several product categories, into every aspect of their customer’s
Dubois and Czellar (2002) refer to luxury brands as those goods that can offer comfort, beauty and refinement. On the other hand, a prestige brand is referred to as a brand that has achieved a definitive level of accomplishment, either in the quality or performance. O’Cass a...
By 2002, Moet Hennessy Louis Vuitton was the world’s largest luxury products company, enjoying annual sales of 12.2 billion euros. LVMH carries the most prestigious brand names in wine, champagne, fashion, jewelry, and perfume. Upon entrance of this luxury product industry, LVMH was aware that they produced products that nobody needed, but that were desired by millions across the world. This desire in some way fulfills a fantasy, making consumers feel as though they must buy it, or else they will not be in the moment, and thus will be left behind.
-Status symbols: Sophisticated customers who value the distinctive, exclusive collection seem to value the corporate-branded version of luxury. –Philip Martiz, chairman of the board
“Despite worldwide softness in the sale of luxury goods, LVMH has cemented its position as the world’s largest and most profitable player in the category. To stay there it must keep its customers loyal and its brand strong and find new markets worldwide” (Hazlett C. 2004). That is why in its mission they state to represent the most refined qualities of Western “ art de vivre” all around the world. Their objective is to be the leader in the luxury market, continuing to transmit elegance and creativity. This poses some major challenges, the main one is to keep being the leader in the luxury market through a sustainable growth. The main problem to achieve it is the high dependency on three main countries, France, Japan and USA. This becomes a threat because if there is an economic downturn in one country it affects LVMH directly that is why.