Luxury is bouncing back. Research from business and retail consultants Bain & Company, Deloitte, and Kurt Salmon Associates shows positive turnaround in every sector. Bain predicts a 4 percent increase in this year’s luxury sales. Deloitte’s Consumer Spending Index in March rose almost two and a half times over March 2009. And the jewelry industry is also seeing a turnaround; holiday 2009 and winter and spring 2010 buying shows came back to life after a long abysmal spell. 

But understand that the marketplace has changed. While there is pent-up demand, post-recessionary patterns are proving different from the spending free-for-all we’d grown accustomed to.

While much of the recent boom came from the hedge-fund crowd, aspirational consumers also contributed a hefty share. The people who bought a six-bedroom McMansion on a three-bedroom-ranch salary may have made news, but just as many were buying Louis Vuitton on a Liz Claiborne paycheck. Now, the only consumers who can afford to spend $35,000 a year on jewelry, watches, or accessories are those rarified individuals who earn—not just have on paper—$1 million or more per year. So if you’ve got a case of $15,000 watches and $25,000 diamonds, it won’t be the $250,000-a-year demographic buying them. It will be the people who always bought them: the truly rich.

Is the aspirational shopper an endangered species? No. Though I doubt we’re about to return to rampant consumerism, I don’t see the American people turning into ascetics, either. All buyers are becoming far more selective about their purchases, and they’re looking for fewer items of better quality. Luxury now is about self-expression, not status.

Brand alone no longer justifies a premium price. A product must demonstrate value—be it design, durability, performance, craftsmanship, environmental awareness—that separates it from its competitors. But shoppers also love a bargain, and they’ve gotten used to scoring luxury goods at deep discounts. Even before the luxury meltdown of 2008, affluent shoppers were scouring Costco and Overstock.com. The popularity of timed-sale websites like Gilt and RueLaLa proves that the expectation of a discount has become an ingrained habit. 

But even now, well-designed, well-made, and distinctive fashion—including accessories and jewelry—continues to fly out the door at full price. The key for retailers is to offer product that is not only distinctive, but also offers genuine value at sensible prices for its target demographic. As consumers have learned, aspiration is one thing; bankruptcy is another. While they’re looking for quality, it must be quality they can afford.

Breathe easier, but don’t get snobbish. Be a fine jeweler, but understand and respect your buyers’ spending preferences. After all, giving your customers what they want never goes out of style.