The New Affluents are a generation of rich shoppers no longer blindly buying bling, preferring instead quality at a reasonable price. Tahira Yaqoob sees whether the American phenomenon is catching on here Salma al Azzani carefully hangs her Louis Vuitton handbag over the handle of her trolley, adjusts her abaya to give herself room for manoeuvre, then begins to strategically plough her way through Ikea's garden department.
Poles for a pagoda and canopy, outdoor furnishings and accessories fill her trolley as she busies herself in the popular store in Dubai's Festival City. One might wonder what Mrs al Azzani, 36, an Emirati bank branch manager, is doing in the aisles of a budget furniture giant when she and her husband together bring in about Dh90,000 (US$24,500) a month and rarely worry about economising. And with her penchant for buying quality things she likes, regardless of the price, it might be surprising to know that her children Majid, aged six, and Haya, two, are just as likely to be seen wearing H&M as they are Dior and Burberry.
"Ikea has good prices and nice design, so why not?" she shrugs. "I do not have a budget but design comes first and foremost. "It does not matter if it is Marks & Spencer or Dior, as long as it looks good and it fits." Meet the New Affluents, a term coined by an American research centre, which refers to a new breed of shopper who is less likely to be sucked in by the lure of a label and more likely to buy a product because it offers quality, value for money, good design and is functional.
According to Dwell Strategy and Research in San Francisco, which surveyed more than 1,000 people with an annual household income of about Dh735,000 ($200,000), the new face of affluence is now shunning "conspicuous consumption" and luxury brands in favour of those that are relevant to their lifestyle or that appeal to them through the mediums they use most, whether it is texting, tweeting or social networking.
The New Affluents are "powered by 21st-century technology", which they deem indispensable to the way they communicate - and which increasingly influences what they decide to buy. Brands that "create experiences, not products" are more appealing, they say. Gucci, Louis Vuitton, Armani and Versace are nowhere to be seen on the top 75 names favoured by this emerging generation, which has an average age of 45.
Despite having the financial means to splash out, the brand names that crop up frequently are decidedly more middle of the road. While Apple and Sony may come as no surprise, they are joined by Ikea, The Gap, Crate & Barrel, Nordstrom and Volkswagen. So have luxury goods had their day? And is the American picture reflected in the UAE? Not quite, but researchers from the Dubai-based consultancy Jones Lang LaSalle, who have just released a report on how the retail sector is bearing up, say the national splurge on designer goods has certainly been severely dented by the recession.
"With a decline in purchasing power of the resident population over the past 18 months, consumer budgets have been reduced significantly," the report says. "This represents a shift away from luxury-driven retail. For retailers and mall owners, there is now heightened competition to aggressively capture shoppers' interests and disposable income. "With the slowdown in the rate of economic growth in 2008 and 2009, the retail sector has been impacted by its previous emphasis on luxury shopping and the reliance on a continued influx of wealthy tourists and new visitors coming to live and work in Dubai."
A downturn in sales of at least 20 per cent last year, lower footfall levels and plummeting numbers of tourists have led traders and mall designers to rethink their strategy, analysts say. While Dubai boasts 2.2 square kilometres of retail space, existing and new shopping centres will veer away from luxury brands and concentrate on "value merchandising" as a result. Cue Mirdif City Centre, the last "super-mall" to open for three years. Up to 20 million visitors a year are expected to traipse through the Dh3 billion shopping centre, which opened in March. But which 430 stores have filled its hallowed aisles? Not, as you might expect, the high-end chains, which have flocked to the likes of Dubai Mall and Mall of the Emirates.
No, the shops that are drawing the biggest crowds in Mirdif are distinctly unglamorous, from Pottery Barn, the American furnishings chain, and the department store Debenhams to the casual clothing chain American Eagle, Miss Selfridge fashion wear and the British-based Lakeland kitchenware store. When the mall opened, Peter Walichnowski, the chief executive of Majid al Futtaim Properties, which owns Mirdif City Centre, told Arabian Business: "We are not going upmarket in terms of having a high degree of luxury goods. It is very middle market in terms of retail offer and has also got a lifestyle component that is attractive for residents."
The Dwell report suggests that the credit crunch is not solely to blame. It may have made people more cautious about where they spend their money, but those they surveyed were affluent enough to invest in the finer things in life - they were simply less likely to buy goods to "impress others" and more inclined to spend on brands that cultivated a relationship through the mediums they used most. The internet was key to many purchases. It was no coincidence that Nordstrom, which invested in online banner ads, was among their favourite brands.
Paradoxically, the French luxury goods giant LVMH Moët Hennessy reported an 11 per cent rise in global sales in the first quarter this year, with accessories and drinks faring best. So the spending money is clearly there, although Mrs al Azzani mirrors what researchers found in the US: wealthy shoppers who had the means to indulge in expensive habits but, in what must be a nightmare for marketeers, without a steadfast loyalty to upmarket brands.
The concept is a familiar one to British shoppers: Victoria Beckham first made the high street cool by declaring that she paired Topshop T-shirts with designer jeans. Now there is Samantha Cameron, wife of the new prime minister, proudly toting her Jigsaw accessories and Zara wedges. Mrs al Azzani, a Dubai-based mother of two, says there are so many options available that it is possible to get quality goods for a fraction of the designer price.
She has decorated her interiors with expensive wooden furniture shipped from India and Thailand, splashes out on Dior and Louis Vuitton for handbags and jewellery, but resents paying Dh1,000 for Guess jeans when she can just as easily find a good quality pair in H&M for Dh70. "I do not mind buying cheaper goods, particularly when they do not actually look cheap," she says. "I do not see that among my friends, however. Even those who are being more careful with their spending have cut back on travel rather than luxury goods.
"Having a good lifestyle here is part of the essence of Dubai. I buy into brands for things like handbags but for other things, I am flexible. I used to dress my children in Dior and Burberry but the quality and design of H&M's children's wear is great, so why not buy that instead?" Muhamed Abdulrahman, 40, a businessman, and his wife Nagla Ali, 39, a banker, could have visited a boutique furniture store in their native Sudan to furnish their new home.
Instead, the couple blew a large hole in the pot they had set aside on flights to Dubai, where their first port of call was Ikea. They flew with hand luggage and empty suitcases, which they were planning to fill with an assortment of home accessories and furnishing material for the return journey. "We do not have an Ikea in Sudan and it has everything we need - simple, strong, practical stuff and relatively cheap," Mr Abdulrahman says. "We have small home furnishings shops at home, but nothing on this scale.
"I have also flown to Saudi Arabia to stock up from the Ikea store there. I am happy to spend money on Gucci shoes or Armani suits but these homewares reflect our style." Abdulrahman Saif, 28, and Ramy Emil, 30, both telecommunications firm managers, say mid-range stores such as Zara, Pull and Bear, Sun N Sand and Home Centre are among their favoured outlets, with an occasional splurge at Massimo Dutti. "The quality of those stores matches the price," says Mr Saif, who is from Egypt. "I choose where to shop from friends' recommendations and the internet."
Adele Jones, 28, and her friend Carrie Rowley, 30, both British-born housewives living in Dubai, were drawn to Pottery Barn in Mirdif to "see what all the fuss was about". "I am not really a label person," Mrs Jones says. "I tend to go to Topshop, Zara and Debenhams, possibly because I recognise those names from home. Price, sizing and quality are the biggest factors influencing my shopping and you tend to stick with what you know. I can always find things that fit in those stores."
Xavier Tait, 17, a student, has seen a worrying trend in his parents, who fit the Dwell report persona - they have started shopping for clothes in the same places as him. "My mother shops at Topshop and H&M and my father has the same pair of shorts as me. I try not to wear them at the same time," he says. His shopping influences are indie music, films such as This Is England and Trainspotting and movie stars including the Twilight series's Robert Pattinson, while internet advertising and Facebook also carry weight - factors which are becoming less defined by age, he says.
David Macadam, the regional director of Jones Lang LaSalle, says tourists who come to the UAE are driven more by getting value for money than by status labels. "People who have disposable income were previously happy about spending it on entertainment and novelty items like high-end watches. They may still have that income but because there are concerns about what the future may hold, they are becoming more conservative about what they spend on."
However, Richard Adams, the consumer markets consultant for the business analysis firm Datamonitor Middle East and North Africa, says there will always be a market here for luxury brands: "In the UAE, the situation is very different. Luxury brands remain an integral part of social identity and consumers continue to use luxury brands to make ostentatious displays of wealth." The firm recently surveyed 1,000 shoppers and found more than 60 per cent preferred visible and instantly recognisable labels on goods, while more than half thought there was a direct correlation between price and quality, one of the highest figures in the world.
"UAE consumers are much more likely to accept the idea that an expensive product or brand will be of inherently superior quality, something the American New Affluents reject," he says. "This is not to say they are looking for entirely different brand values [such as] quality, innovation, uniqueness and social reputation. "But we should not lose sight of the fact the ostentatious consumption of high-end brands continues to be an integral part of a luxury lifestyle in the UAE and that expense, exclusivity and brand recognition continue to drive sales."
@Email:tyaqoob@thenational.ae