Thursday, 13 September 2012

Australian's living in the lap of luxury

Bond Street, London. Rodeo Drive, LA. Fifth Avenue, New York. Champs-Elysees, Paris. All of these places are synonymous with luxury.

 Now, lets add Collins Street, Melbourne and Pitt Street, Sydney to that list.

The luxury market in Australia is taking off and is bucking the global economic  trends in retail sales. Discretionary spending has certainly tightened up particularly in the apparel sector and even some of the food retailers are feeling the pinch with flat or declining sales. Supermarket and large format discount department store sales are up as people look to cut back on their non essential purchases and have been doing this since the impact of the GFC. For over two years now consumers have been cutting back and have chosen to forgo those items and experiences that were an everyday occurrence prior to the GFC. Well the growth in the Luxury and premium retail sector indicates that consumers have had enough of their frugal behaviour of the past couple of years and are now deciding to treat themselves with both the premium and luxury sector experiencing the full benefit of this, whether its Nespresso with their top of the line domestic espresso machines and coffee products or the gourmet food retailers like Lindt in the premium sector.

In tough times people will forgo the mid market treats and when they treat themselves, they will go all out. Whether it’s a gourmet cup of coffee at the lower end or Gucci or Prada handbag at the top end of the market, and it’s not just the wealthy that are having these luxurious shopping experiences, in tough times everyone wants an experience, something that will make them feel good, and something aspirational.
The Luxury sector is experiencing a boom as all demographics strive to treat themselves, when someone buys a luxury item like a $1500 handbag they can justify it as a special “investment piece” , something classic and timeless, it’s a purchase that makes them feel special.

This focus on treating yourself has resulted in strong demand and performance of luxury retailers in Australia and the recent redevelopment and opening of Westfield’s Pitt Street Mall has attracted multi-level luxury flagship stores. the entry of new Luxury brands and the growth of the existing luxury brands and all of these stores are ranking well on an international level, which is luring even more of the prestige brands to our shores.

The 2012 Retail Salary Survey Results revealed a 15% increase in salaries in the luxury space over the past 12 months. This exclusive salary offering, highlights the growth in the sector as new brands enter the market or grow their existing presence and their demand for the best candidates to staff their stores and provide their clientele with the total luxury experience.

Luxury Store Managers salary base is second only to the large format sector; with most in the $70k - $80k bracket. Whilst the mid market  fashion sector is only offering their managers salaries between $41k - $50k, it is a significant difference. Many of the candidates being targeted are doing the same thing as the customers of these luxury or premium brands, that is they are looking for something aspirational, a business and brand that will make them feel special too.

Today it’s Collins street in Melbourne and Pitt Street in Sydney, in years gone by some luxury retailers would have been aghast at the thought of being positioned in a shopping centre environment but the success of these retailers has demonstrated that luxury is no more just the domain of the rich and famous and there’s a luxury retailer coming to a location near you.