North Olmsted, OH, August 3--It's paying $2,000 for a granite kitchen countertop instead of $600 for a laminate version, or spending $3,500 for a custom-designed refrigerator rather than $300 for a basic model. What are we talking about?
It's "new luxury," one of the most rapidly growing trends in the home -- a phenomenon of consumers paying significantly higher premiums on items and services. And, odds are, you're a participant in this trend.
According to estimates by businesses gurus Michael J. Silverstein and Neil Fiske, there are close to 122 million Americans who have the capability and desire to spend more for new luxury. Silverstein and Fisk identified the "new luxury" trend and call this phenomenon of paying more than average for goods "trading up," and detail its growth in their book bearing the same name.
What's the appeal of new luxury? While many items in this category have a quality advantage over their competitors, it isn't value-added that's drawing so many of us to them. New luxury products are so popular because they involve an emotional sentiment in their possession.
Brand Manager Margie Rowe at Moen Inc., a leading designer and manufacturer of faucets, explains how consumers can develop such sentimental feelings over an appliance or household item. "Many of us are a part of this trend because these new luxury items have become a symbol of quality, good taste and, ultimately, personal happiness. We feel these new, unique product offerings are a vehicle for self-expression."
New luxury spans across a number of markets, but, according to Silverstein and Fiske, it's hit the homefront hardest. Fifty years ago, the average home measured 983 square feet. Today, it's over 2,200 square feet. And in new construction and remodeling projects, consumers expect new luxury amenities as the standard fare in their ever-expanding homes.
At the heart of the new luxury home is the kitchen. In the 1950s, the average kitchen remodel cost approximately $9,000 (in today's dollars). Now it's more than $57,000. Homeowners want to feel as though the design of their kitchen is a reflection of their successful life. In Silverstein and Fiske's research, they spoke with one homeowner who said, "The quality of our appliances represents us."
With kitchens and baths remaining the focal points of homes, combined with the trading-up phenomenon, the manufacturers and product offerings in this new luxury category will continue to grow. Items that were once considered elite will become prevalent as more and more consumers develop the means and desire to embrace luxury. Items like professional-grade cooking equipment and wide spread designer powder room faucets will become luxuries that more and more Americans own.
