Is luxury the only market left for interior designers?
Monday, June 04, 2018
As consumers’ appreciation of and desire for good design have increased in the past decade or so, competitors of all sorts have rushed in to try to fill the gap between what consumers want and what they can afford (or are willing to spend).
This has put pressure on designers to lower their fees and work with smaller budgets, thereby reducing their profitability and, in some cases, driving them out of business. With little indication that this situation will change anytime soon, it begs the question as to whether the luxury market is the only viable one left for today’s designers.
Interior design has always been an exclusive service, catering to a relatively small segment of the overall population. Nonetheless, up until 10 years ago, when the economy hit the skids and the housing bubble burst, thousands of designers operated successful practices that thrived on the patronage of highly affluent (as opposed to ultrarich) clients.
For the most part, these were clients whose homes were not featured in glossy design and lifestyle magazines, but who had the means and the desire to live in a well-designed and well-furnished environment that they could enjoy with their family and friends.
In the years post recession, values have changed, lifestyles have changed, attitudes toward consumerism and luxury have changed, and those longtime clients have reached a point in their lives where they no longer have a need or interest in engaging more design services.
Today’s younger affluents also want well-designed living environments, but have their own ideas about what that means. They also have more options for how to attain their ideal home. At the same time, the number of millionaires and billionaires has skyrocketed, and the luxury and custom home markets have rebounded, expanding the potential market of wealthy clients.
Designers have been responding to these changes in different ways. Some are focusing on the luxury market, branding and marketing themselves to ultrarich clients by appealing to their desire for a home that serves as a retreat from the pressures and communication overload of their work and social lives. They recognize that for these clients luxury today is about respite, freeing up time for themselves, and optimizing health and wellness.
They also offer them a curated selection of unique, artisan, values-conscious and high-quality furnishings and fixtures that sets them apart from what is readily available through online sources. To succeed with these clients, you have to have the desired proven design skills and experience, access to sources and business acumen to provide an outstanding client experience.
Other designers, however, have retooled their business model to make their services more appealing to younger, affluent consumers. Because these clients cannot afford or do not wish to pay for a full menu of design services, these designers are packaging their services differently, offering fixed fees and taking on smaller projects.
Essentially, they have adopted a volume (as opposed to cost) strategy, carefully keeping track of their time in order to make themselves available to a greater number of clients. By providing this type of customized service, they hope to develop long-term relationships with these clients and provide services in the future as clients’ needs and lifestyles change.
Without question, today’s designers face a number of challenges from competitors, demographic/market shifts and demanding clients. For those who are willing to adapt to these changes, opportunities do exist.
Trying to sell affluent clients on luxury design is no longer a viable proposition. To succeed in today’s market, choose the client base you are interested in and qualified to serve and tailor your business model appropriately.
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