An article by BBC earlier this year stated that in 2023, consumers unexpectedly boosted spending, potentially staving off the recession, however, economists predict a shift in 2024, with shoppers becoming more conservative in their choices amidst factors like inflation, political and economic uncertainty and a slowing job market. While spending is expected to continue, it will focus on smaller favorites, more affordable indulgences rather than high-priced items, like electronics. This trend is driven by economic uncertainty, making consumers more discerning about their purchases, seeking what is often referred to as “affordable luxuries” – gratifying self-indulgences that one can pay for but are not necessary.
Lower-income consumers, affected more severely by economic challenges, still desire to treat themselves, albeit within reason. While high-end goods may see reduced demand, “practical luxury” items like the latest smartphones may cater to this need.
In January and February, people often engage in self-indulgent shopping after the holidays to relax. In the UK, consumers are expected to turn to discount stores due to economic uncertainty, with beauty products and small treats performing well.
Deloitte analysts anticipate increased spending on items like specialty coffees, snacks, premium spirits, and wellness and personal-care products. This shift includes small indulgences and self-care products such as anti-aging serums and The Ordinary “clean” skincare. The “lipstick index” phenomenon captures this pattern, where budget-conscious consumers opt for relatively affordable splurges.
Retailers are responding to this trend by diversifying their offerings. Stores like Target are embracing “affordable joy” by curating self-care, cosmetic, and wellness-centric products. Macy’s, for example, emphasizes a mix of high-end and low-end luxury items, aiming to provide year-round affordable and aspirational choices. Also, L’Occitane En Provence, is serving customers the “little luxuries” they’re looking for.
Multi-brand department stores are seeking to attract shoppers with luxury products at various price points, including used luxury items, beauty, and wellness products. Some shoppers may turn to the resale market for designer items at more reasonable fees.
The best part is that Angel Customers then have the opportunity to enjoy their most beloved affordable luxuries at little prices!
Overall, the desire for small splurges is expected to be widespread in the US and UK. After a year of spending that puzzled economists, consumers seek items that make them feel good without breaking the bank, and some retailers are eager to assist them in treating themselves.
What are your most favorite “affordable luxuries”? And how often you would buy them? Share your experience with us, we’d like to hear from you.
