Last word
Last word: Annie Swift
The powers-that-be, whoever they may be after this year’s General Election, can be counted on to keep things interesting for the sector during the year ahead.
Luxe like innovation to me
Luxury may be in a slight downturn along with the recession, but it continues to be a unique and powerful motivator, says Anna Czerny
Say the word ‘luxury’ and the mind no doubt conjures up images of five-star hotels, private jets, yachts, designer clothes, precious metals, rare gems, and exquisite meals.
But luxury can mean different things to different people.
Some of us understand luxury in terms of products, like those mentioned above. Others see luxury as an experience, a bespoke holiday for example, or preferential treatment at an event. Still others consider luxury simply as something they do not have or have very little of, like time.
Whatever our concept of luxury, most of us would agree that to have it, would be nice. In fact, most of us would welcome it.
Until recently, it seemed luxury as a sector could not be touched by the crunch that crippled other industries such as financial services, retail, and manufacturing.
But then designer fashion houses such as Burberry began to post trading losses and eventually the sector became just another victim of the recession – one that is now facing the toughest market conditions in two decades, according to a report by Reuters.
However, our fascination with luxury doesn’t seem to have abated. We still want what we can’t have, or don’t have, and it is this desire that will continue to make luxury a powerful motivator to many people.
And who better to cater to this desire than our own industry, whose primary concern is finding what it is that makes people tick and offering it to them like a carrot in the hopes of getting a specific desired behaviour in return?
One needs only to look at the sheer extravagance of certain corporate gifts and incentives to realise that the practice of motivating key stakeholders with luxury is alive and kicking.
But how long will it last?
With the recession biting hard and many organisations reigning in their spending, it could seem like the halcyon days of motivating with luxury are numbered. Faced with the possibility of redundancies, companies are shifting their focus away from aspirational premium gifts to more practical ones, such as discounts on grocery bills.
Harrods, for example, has seen a slight decline in corporate gifting budgets since the credit crunch hit last September, with clients spending roughly £50 less than they used to. And this year, John Lewis has lowered its entry price point for a Christmas hamper to £25 from £30, in response to customer feedback.
Could this pulling back be a reflection of the general slowing down of the sector? If so, does this mean it could go back on the up as the economy picks up again?
I think so. I believe luxury, and the desire for it, is cyclical, just like the economy and fashion. In 12 months’ time, as consumer confidence slowly makes a comeback, so will the proliferation of luxury goods in the incentives and motivation industry, along with increased spending on corporate gifts.
In the meantime, however, organisations should try to focus on the ‘little luxuries’, that is, smaller, less extravagant rewards that don’t cost the earth but send an equally powerful message to the recipient.
This could include anything from a relaxing day at the spa, a day or evening out, an extra day’s holiday, or even a bouquet of flowers.
Or better still, they could take the time to find out what it is exactly their employees, clients, and suppliers consider luxurious, so when times are better they know to choose the Burberry over the Balenciaga.
Last word: Raegan Matthews
We all have our own personal hopes for what the New Year will bring, but many of us will also have a desire to see improvements to the inventive and movtivation sector. No doubt and upturn in the economy is at the top of everyone's list, but what other changes would you like to see happen in 2010?