The relevance of luxury brands In a subdued economy

Yael Geffen, CEO of Lew Geffen Sotheby's international Realty says that although this exclusive sector is now influenced by prevailing global trends and economics and the range of luxury goods and brands is exponentially broader these days, the defining principles remain the same. "Luxury has always been associated with superior quality, exclusivity and limited availability. Nowadays there are two more key intrinsic principles; company heritage and the level of customer service, with the latter being the foundation in sectors like real estate." She believes that even during a recession, people want their slice of luxury and will opt for quality if possible, regardless of the economic conditions. This is clearly borne out in the 17th edition of management consulting firm Bain & Company's annual luxury study which revealed that last year, the overall luxury market grew by 5% at constant exchange rates to an estimated R19.26 trillion globally. "The report recorded overall positive performance across all luxury sectors, including real estate. This was corroborated by recently released figures for 2018 by Sotheby's International Realty which achieved global sales totaling R1.59 trillion of which R19.8 billion was generated through their unrivalled network system." Three prominent influencers are expected to significantly disrupt this exclusive market, namely the continued rise of online channels and the growing influence of younger generations of consumers and of emerging markets like Africa and Asia. By 2025 online will represent 25% of market value, up from 10% today, and this trend is already very evident when one looks at Sotheby's digital footprint last year which saw 31 million web visits up 17% from 2017 of which 66% were from mobile devices. New generations will be the primary engine of growth in the coming years, with Generation Z and MillenniaIs expected to represent around 55% of the market in 2025 and contribute 130% of market growth in the coming years. According to New World Wealth, the current number of millionaires in Africa is 145 000 with Johannesburg and Cape Town holding first and third positions in the number of millionaire residents. By 2026 the number of African millionaires is likely to increase by 36%. "The truth of the matter is that the demand for luxury brands is rapidly growing as people become more aware of them through travel, increased income and easier access to information via digital media and companies can therefore not afford to ignore these markets." Geffen believes that that there is, however, one constant influential factor underpinning growth in this sector worldwide the aspirational aspect. She also believes that everyone aspires to shift their status and move up in the world, 'the most common way in which people do this is by acquiring certain assets regarded as status symbols and, as their level of income increases, so do the desired assets and commodities. She explains that people often think that there are so many brands way beyond their reach and those are the ones that they covet the most. "However, what most people don't realize is that it's just a mindset and that we are all deserving of the premium service that luxury brands deliver. And, in order for a luxury brand to remain relevant, it's important to communicate that everyone is deserving of their premium experience whether their home is a cottage or an oceanside mansion."