Redefining luxe boundaries - Luxury goods value perceptions and consumer purchase behaviours from the lens of Cadillac in UAE

In 2022, the global luxury market rebounded to pre-pandemic level reaching €1.38 trillion (Bain & Co., 2022), with luxury cars (€566 billion) having the lion’s share (41%) and the personal luxury goods segment which accounted for 26% of the global luxury industry trailed second (€353 billion). Together, these two luxury segments dominated 67% of the world luxury business. The luxury market in the UAE alone has crossed €3.3 billion (IMARC, 2020) and expected a CAGR growth rate of 6.55%. The devotion and attention to the UAE are no surprise as it has grown in reputation to be the exquisite destination for those who aspire to live a life of the affluent (Vel et.al., 2011). Understanding the underlying motivations of complex luxury purchase has become one of luxury brand firms focus. Cadillac, a division of automotive giant General Motors (GM), is on a continuum of its journey in amplifying its brand semiotics to better connect with its customers, expanding its revered iconic brand penetration as well as preparing to engage the new generations of luxury auto-consumers. The next generation luxury auto-consumers, Gen-Y and Gen-Z, especially the HENRYs (High-Earners-Not-Rich-Yet) are expected to represent 80% of global personal luxury goods by 2030 (Bain & Co., 2022). Luxury is a thriving economy with rising worldwide appetites that extend well beyond the inner circle previously only exclusive to the wealthy and powerful (Kapferer & Valette-Florence, 2016); are today readily available, accessible, and affordable through luxury democratization. There is a constant struggle by luxury brand firms to maintain a balance between democratization and the brand’s exclusivity. Both academic and business research on luxury perceptions and purchase behaviours in the UAE market is presently lacking. The research highlights and fills some of these gaps in the extant body of knowledge through understanding the luxury perceptions and purchase behaviours amongst the Cadillac customers. This study aims (1) to explore the luxury value perceptions amongst the Cadillac customers and whether they share the similar value perceptions when these same customers purchase personal luxury goods, (2) to explore the luxury consumers behaviours amongst same group of consumers and the consumer decision-making approach that influence purchase intentions. The research fulfils this through a quantitatively methodology and calls upon various literature and past studies to arrive at an adoption of Brun & Castelli (2013) luxury Critical Success Factors (CSFs) conceptual framework to classify luxury perceptions and Sproles & Kendall’s (1986) Consumer Style Inventory (CSI). Findings on luxury value perceptions support the CSF classification framework vis-à-vis affirming its applicability in the UAE context with dominant focus on global brand reputation, premium quality, emotional appeal and recognizable style and design. The results on consumer behaviours suggest that social and psychological factors play a major part in influencing consumer behaviours and could lead to purchase intentions. The research also found evidence that brand-conscious, quality-conscious and fashion-conscious decision-making styles could significantly influence intent to purchase. Remarkably, the comparative analysis between Cadillac luxury value perceptions surfaced similar traits when same group of customer purchases Gucci products. This finding leads to the potential in redefining the luxury boundaries and unfolding a cross-affinity partnership possibility between these two separate luxury towers. Nonetheless, this study only looked at data through the lens of Cadillac customers. Future research should consider extending the scope to the entire UAE motoring population or applying other theoretical frameworks either on luxury automotive or even other luxury segments. This research provides empirical exploration on dominant luxury value perceptions and consumer behaviours including uncovering purchase preference thematic corollary between Cadillac and PLG in the UAE. The findings hope to inspire other academics and practitioners to examine similar affinities, beyond just auto-personal luxury combi but other permutable combinations; as well as encouraging future research focus on the Middle East region.