Welcome to the dawning of a new age. This will be marked by a decidedly different retail environment where GONE is conspicuous consumption and along with easy credit and self indulgent nature of those we “aspire to be”; it is all history. The New Age of Austerity will be marked by an enironment where consumers will expect more and better value for money, they will buy less quantity and also less quality. The new mantra for this age is “SAVING”. Does anyone remember what saving is? It is when you put money aside for some other purpose and has until now been long forgotten.
Consumers will be paying off credit card debt and cancelling many of their credit cards using debit cards preferably. Mortgage repayment will be accelerated and “who needs to be seen” driving a flashy BMW when a Toyota will get you from point A to B without the fanfare and extravagence.
So get ready for it. Plan for it, if you are in the top end of the luxury segment, you will see your share of the market shrink considerably. While the wealthy will still be wealthy, and may still indulge themselves, they too will become more prudent and it will not be good to be seen “consuming extravagently” when consuming far less extravagently is de rigur.
There is already evidence of upscale restaurants closing their doors as patronage melts away. This will be true too of high cost fashion labels, jewellery, home furnishings and extravagent holidays. It’s OVER. It’s been good but now it’s OVER! Get used to it. Discount shopping will surge and upscale shopping will sag. Upscale stores are already closing and you can expect more of this. You will also see retail outlets that do not offer value for money sag and eventually close. This is everywhere; the USA, UK, Europe etc.
Saving is the new “spending”. So if you are in the business, shift your focus sharply and NOW to cater to the changing dynamic or become a dinosaur! Say “goodbye” to Harrods say “hello” to ALDI and Lidl.
