Study finds luxury brands on the rise despite flagging economy
On assessing more than 1,500 brands across 155 categories, the study by way of a 'Brand Equity Index', found that certain luxury brands have fared better in the past year than in recent years.
According to the market researcher, an increase in brand affinity showed that the appeal of luxury items stayed strong despite tough economic circumstances and consumers planning to cut back and save more.
Color cosmetic brands like MAC is reported as having seen increases in its scores from 2012 with a gain of almost 10 points from the year before and is top ranked in its respective category.
"There's been a lot of discussion in the media as to whether 2013 will bring about another recession, so it's interesting to see equity is on the rise for luxury brands typically associated with higher discretionary income, even as other economic indicators suggest a possible downturn," says Aron Galonsky, Senior Vice President, at Harris Interactive.
"This may show that after a number of years spent tightening their belts, consumers are looking to the quality and value they feel these brands provide," he adds.
On assessing brands, the index takes into account 'familiarity, quality and purchase consideration' and ranks the success of sales between 1 and 10.
"Understanding the health of your brand is a critical component in determining the business priorities for companies in any industry. The higher scores point to increased consumer affinity and likelihood to purchase from these companies," adds Galonsky.
Various reports indicate the success of luxury brands
The Wall Street Journal recently reported anaylists estimating the US bouncing back from the recession of late, particularly in the area of luxury cosmetics.
It reported that although consumer-confidence levels are still wobbly, the biggest spenders are shrugging off any uncertainty, and that despite the economic crisis dampening luxury goods sales in the US, it has now taken the lead in sales growth as China cools down.
"Double-digit sales increases became harder to attain for companies such as LVMH which had operated in China for more than 20 years, [but] are experiencing strong U.S. sales."
