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than they go to luxury and also that luxury products should be available to
them when they want it and how they want it - in other words, attuning the
offerings to everyone's needs for instant gratification. All these expecta-
tions are in addition to the demand to be recognized and courted irrespective
of whether they are clients or not, as long as they have visited the luxury
brand's website once.
To make matters more interesting, the global financial crisis and its spin-off
credit crunch is leading to even further changes in the psychology of luxury
clients and further shifts in value systems, mind-sets and social consciousness
on multiple levels. This coupled with globalization and the presence of luxury
brands on the world economic stage has ensured that there is no escape for
luxury brands in the cultural revolution that was ignited by the Internet and
has been propelled by globalization and now the recession. The mentality of
luxury clients is changing worldwide and it is apparent that this is on a pro-
found level. These changes are also evolving in multiple directions although
it is not yet clear which of these directions will dominate the new culture that
will emerge following the strong winds blowing over the economic crisis. One
thing for sure, however, is that what is currently taking place on the luxury
consumer front has never been experienced before in the luxury domain.
The current global recession marks the first time that the luxury sector has
been touched by a worldwide crisis as an industry. Unlike the previous hits
that luxury has taken in the past for short periods, including the Gulf War,
September 11 and SARS, the current crisis is significantly different. First,
it is not event-driven and doesn't touch only on tourist spending, but also
on domestic purchases of luxury. Second, it is impacting the luxury business
as a consolidated “industry”, which was not the case in the past. Let's not
forget that before LVMH, Richemont and the Gucci Group came along, the
luxury sector was a group of design and trade-driven activities dominated by
small and successful family businesses. Today, the scene has changed and
luxury has become an important economic force with a concrete structure,
operational mechanisms and consensus in management systems. Third, the
recession is coming at a time of an important power-shift on two levels, first
between luxury brands and consumers and, second, between the economic
force of occidental versus oriental countries in terms of luxury consumption.
The “traditional” luxury countries - France, Italy, Spain and the UK - together
with the US and Japan have for a long time wielded the force of influence in
luxury purchases and, as a result, exported the idea of western luxury to the
oriental countries - China, the Gulf States, Brazil, Russia and India. Today,
these latter countries, together with the likes of Mexico, hold great prom-
ise for the future survival of the global luxury business. This, of course, will
bring with it several cultural consequences.
Where is the consumer in this mix and in what way will they be affected
by the current climate? Although it is quite challenging to understand clearly
the direction of the next wave of evolution of the luxury client, it is clear that
