According to the Commerce Department, last September, consumer spending in the US decreased by 0.3 percent from the previous month despite the 0.2 percent increase in personal income.
That same month (September18), the Federal Reserve reported that the US household new worth went down from $2 trillion over the last year, and yet, it’s still $17 trillion more than it was in 2002. To put it simply, it means that many Americans are richer than they were less than a decade ago, despite the unstable market.
But despite all these, the economic crisis has driven people to rethink their spending habits.
In consumer surveys conducted by Reach Advisors, respondents are more often saying they wouldn’t recommend high-end goods or services to people because they don’t want to flaunt their wealth.
Because of this covert spending, certain terms have popped around marketing circle up such as "stealth wealth" or "discreet luxury".
Because of this new attitude towards spending, brands have to rethink their way of drawing customers.
Some labels, such luxury conglomerate PPR, as imitated their consumers’ moves of going under the radar and becoming less conspicuous.
PPR’s marquee label, Gucci saw a 6.8 increase in overall sales over the first 9 months of 2008 (compared to its first 9 months figures the year before) with its less flashy labels.
Bottega Venetta saw a 20 percent increase in sales for its first nine months of 2008.
YSL, with the help of creative director, Stefano Pilati, saw an increase of 26.6 percent, in contrast to its 2007 figures. In the 3rd quarter, YSL saw an a 27.4 percent increase worldwide, compared to their 3rd quarter in 2007.
A consumer who buys a jewelry piece displaying Chanel’s double Cs, people would know where she got. On the other hand, if she goes for a Proenza Schouler’s new line which displays no visual branding, she doesn’t look like she’s flaunting her designer purchase.
Ron Kurtz, founder of Alpharetta, a Ga.-based market-research firm the American Affluence Research Center, says "Right now, people are more apt to buy things that promise longer durability, instead of relying on faddish things from year to year."