The recession has a clear effect on consumption habits as disposable income dwindles. However, the recession is not only changing habits, but attitudes. Indeed, conspicuous consumption is becoming less fashionable as rampant consumerism gains negative connotations, as more attention is paid to happiness and behaviour. The luxury market is re-examining itself and toning down is clear; one of Yves St Laurent's best performing range is a ready to wear collection called Edition 24 that is less expensive and designed to be worn for several seasons. Are we entering the era of luxury shame, where "frugal is cool"?
While the luxury market is increasingly challenged in the West, it still may be lucrative in the East. There are over 90 million "middle class" consumers in BRIC countries with low levels of debt. Cartier expects China to be its biggest market in 2012. But will the BRICs follow the same consumer patterns as the West? Already, different preferences are showing. In India, more emphasis is placed on the intrinsic value of the jewellery, rather than the brand, though there are signs that this is beginning to shift. However, BRIC consumers could shape the future of consumer culture far more dramatically than just developing different preferences. As the Western model combats the credit crunch, we all await to see if it will regain momentum in the future or be replaced by something new, shaped by new attitudes, powers and values.
This is part of Outsights 21 Drivers for the 21st Century ™, a future-orientated scan of the 21 key forces shaping this century.