Should the CBN’s Negative Report for Luxury Goods Alarm the Industry?

According to major news outlets, Nigerian consumers “are not likely to purchase expensive or luxury items in the next 12 months.” This assertion is based on the Central Bank of Nigeria’s (CBN) Consumer Expectations Survey (CES) report for December 2020 released by the Statistics Department of the apex bank on Tuesday in Abuja.

The consumer Expectations Survey from CBN
The Consumer Expectations Survey from CBN shows that consumers are not likely to “purchase big-ticket items.” Image courtesy of CBN

What exactly did the report say?

The highlights of the Q4 2020 Consumer Expectations Survey (CES) states that “Majority of consumers believe that the next 12 months would not be an ideal time to purchase big-ticket items like motor vehicles and house & lot.” However, the same report also says that “consumers have a positive outlook for the next quarter and the next 12 months.”

Should the Nigerian luxury industry expect dismal sales in 2021?

Nigerian luxury shoppers have changed their spending habits this year
Consumer spending habits have changed drastically this year. Image courtesy of Deposit Photos


Even with the promise of effective vaccines going global, consumer spending and discretionary spending habits have changed drastically this year. While certain sectors within the luxury industry will experience increased sales in the new year, others will struggle to make profits until economic activities stabilise globally and people adjust to new habits occasioned by a new way of living.

However, the report also offers a glimmer of hope. In the first place, the “big-ticket items” here are cars “consumer durables [and] house & lot.” Consumer durables range from cars to jewellery and generally refer to goods that can be used over a long period of time. House&lot are basically houses and lands. The luxury industry, on the other hand, offers everything from products to services. If only certain sectors of this industry will be hit, it does not mean every luxury-facing business would be affected.

Chanel purse
Luxury goods are beyond houses and cars. Image courtesy of BusinessofFashion

Besides, the survey involved only 2,070 households, of which 2,039 responded. While there are no reliable stats to prove just how many Nigerians indulge in luxury goods, the singular fact that there are quite a number of businesses providing luxury offerings is a strong indicator that 2,070 households may be grossly inadequate to provide a rounded analysis of consumer spending habits in this sector.

Lastly, anyone who has had any sort of experience in managing luxury brands will tell you that the story behind a product, as well as a deep understanding of the customer and the overall experience they will enjoy from the moment they make enquiries about a product, are just as important as the product itself. If Nigerian luxury consumers think that they would not be making luxury purchases, brands need to ask why. The answers they will come up with would most likely have nothing to do with costs.

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